IMF: Artificial Intelligence endangers 40% of jobs in developing countries like Albania 

2024-05-26 11:33:49Biznes SHKRUAR NGA REDAKSIA VOX
Illustrative photo

Artificial Intelligence will affect almost 40% of jobs worldwide, replacing some and complementing others. We need a balance of policies to harness the new potential, Kristalina Georgieva, Managing Director of the International Monetary Fund, said in a blog post.

She said the world is on the brink of a technological revolution that could boost productivity, global growth and raise incomes worldwide. However, it can replace jobs and deepen inequality.

The rapid advancement of Artificial Intelligence has stunned the world, raising important questions about its potential impact on the global economy. The net effect is difficult to predict, as AI will affect economies in complex ways.

The IMF suggests that countries should create a series of policies to safely harness the great potential of AI for the benefit of humanity.

Many studies have predicted the likelihood that jobs will be replaced by AI. However, in many cases, AI is likely to complement the work of humans. The findings of the IMF analysis are surprising.

First, almost 40% of global employment is exposed to AI.

Historically, automation and information technology have tended to impact routine tasks, but one of the things that sets AI apart is its ability to impact highly skilled work.

As a result, advanced economies face greater risks from AI, but also more opportunities to exploit its benefits, compared to emerging markets and developing economies.

In advanced economies, about 60% of jobs could be affected by AI. Approximately half of the exposed jobs could benefit from the integration of AI, increasing productivity.

For the other half, AI applications can perform key tasks currently performed by humans, which can reduce the demand for labor, leading to lower wages and reduced employment. In the most extreme cases, some of these jobs may disappear.

In emerging markets and low-income countries, IA exposure is expected to be 40% and 26%, respectively. These findings suggest that emerging markets and developing economies face less immediate disruption from AI.

At the same time, many of these countries lack the infrastructure or workforce capable of harnessing the benefits of AI, raising the risk that over time the technology could exacerbate inequality between nations.

Artificial Intelligence can also affect income and wealth inequality within countries. It will create polarization within income groups, with employees who can leverage AI seeing an increase in their productivity and wages.

Research shows that AI can help less experienced workers increase their productivity faster. Younger workers may find it easier to take advantage of opportunities, while older workers may struggle to adapt.

The effect on labor income will largely depend on the extent to which AI will complement high-income workers. If IA significantly complements higher-income workers, it may lead to an uneven increase in their labor income.

Furthermore, productivity gains from businesses applying AI are likely to increase returns to capital, which may also favor those who invite more. Both of these phenomena can exacerbate inequality.

In most scenarios, AI is likely to exacerbate overall inequality, a worrisome trend that policymakers must proactively address to prevent the technology from further fueling social tensions.

It is essential that countries create comprehensive social safety nets and provide retraining programs for vulnerable workers. By doing so, the AI ??transition can become more inclusive.

To help countries design the right policies, the IMF has developed an AI Readiness Index, which measures readiness in areas such as digital infrastructure, human capital and labor market policies, innovation and economic integration.

The human capital and labor market policy component, for example, assesses elements such as years of education and labor market mobility, as well as the proportion of the population covered by social safety nets.

The regulation and ethics component assesses the suitability to digital business models of a country's legal framework and the presence of strong governance for effective enforcement.

Using the index, IMF staff assessed the readiness of 125 countries. The findings reveal that wealthier economies, including advanced economies and some emerging market economies, tend to be better equipped to adopt AI than low-income countries, although there is considerable variation between countries.

Singapore, the United States and Denmark showed higher scores on the index, based on the four categories tracked.

The IMF advises that advanced economies should prioritize AI innovation and integration while developing robust regulatory frameworks.

For emerging markets and developing economies, the priority should be to establish a strong foundation through investments in digital infrastructure and a digitally competent workforce.

The era of Artificial Intelligence is upon us and it is still in our hands to ensure that it brings prosperity for all, the analysis of the IMF highlighted./Monitor

Video