The IMF predicts that AI will worsen inequality and affect nearly 40% of jobs worldwide.
AI could affect roughly 60% of job in developed economies. In accordance with an IMF analysis, artificial intelligence will impact nearly 40% of global jobs, with wealthy nations bearing a greater risk than emerging economies and low-income countries.
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“In a blog post on the study, Kristalina Georgieva, the managing director of the IMF stated that in most cases, artificial intelligence will probably increase overall inequality, a worrying trend that policymakers need to proactively address in order to avoid the technology from even more inflaming social problems.”
The degree to which artificial intelligence benefits high earners will determine how much of an impact it has on income inequality. According to Georgieva, increased productivity from high-earning individuals and businesses would increase capital returns and widen the wealth disparity. She recommended that nations offer “broad social safety traps” and upgrading initiatives to workers who are at risk.
AI will affect 60% of jobs in the advanced economy.
The analysis suggests that although artificial intelligence may eventually completely replace some jobs, it is more likely to augment human labour. Compared to emerging and low-income nations, advanced economies may see a 60% job loss.
But according to an IMF analysis released on Sunday night, just half of the employment that artificial intelligence affects will suffer; the other half may even gain from increased productivity as a result of artificial intelligence. “Your job may disappear altogether – not good – or artificial intelligence may enhance your job, so you actually will be more productive, and your income level may go up,” Georgieva stated.
Georgieva’s perspective on artificial intelligence comes as international political and business leaders gather in Davos, Switzerland, for the World Economic Forum, where artificial intelligence is a topic of debate. Businesses have been flooding the market with cash for this new technology, which occasionally causes employees to worry about their jobs in the future.
As an illustration, consider Buzzfeed Inc., which closed its main news division and laid off over 100 employees while also announcing plans to use artificial intelligence to assist with content creation. While the US is still considering its federal regulatory approach, the European Union attained a provisional agreement in December on regulations outlining artificial intelligence safeguards.
Uneven outcomes
According to the IMF report, labour markets in developing and emerging economies will be less affected by artificial intelligence initially, but they will also be less likely to gain from the increased productivity that comes with integrating it into the workplace.
“We must focus on helping low-income countries in particular to move faster to be able to catch the opportunities that artificial intelligence will present,” Georgieva stated to AFP. Therefore, artificial intelligence is a little unsettling. However, everyone has a fantastic opportunity as well,” she added.
Later this month, the IMF is expected to release revised economic projections that will demonstrate that, overall, the world economy is on track to surpass its earlier projections, according to her. The economy is “poised for a soft getting,” she stated, including that the “monetary policy is performing an excellent job, and the rate of inflation is going downward, but the job is not extremely accomplished.”
“So, we are in this trickiest place of not easing too fast or too slow,” she continued. The IMF projects that, over the medium term, the global economy will continue to grow at historically muted levels, meaning that it could use a productivity boost related to artificial intelligence. “How much do we need God?” Georgieva exclaimed. “Unless we figure out a way to unlock productivity, we as the world are not for a great story.”
“Hard” year in store
As nations attempt to rebuild depleted buffers and address debt loads incurred over the Covid-19 pandemic, Georgieva predicted that 2024 would be “a very difficult year” for monetary policy globally. Additionally, this year will see billions of people cast ballots, putting more strain on authorities to either reduce taxes or increase spending in order to win over the public.
“About 80 countries are going to have elections, and we know what happens with pressure on spending during election cycles,” she stated. According to Georgieva, the IMF is worried that high global government spending this year will jeopardise the hard-earned gains made in the struggle against excessive inflation. “If monetary policy tightens and fiscal policy expands, going against the objective of bringing inflation down, we might be for a longer ride,” she stated.
Concentrating on the task at hand
Georgieva declined to comment when asked if she planned to run for the position of head of the IMF again during her remaining five years in office this year. “I have a job to do right now, and my concentration is on doing that job,” she stated.
“It has been a tremendous privilege to be the head of the IMF during a very turbulent time, and I can tell you I’m quite proud of how the institution coped,” she said. “But let me do what is in front of me right now.”
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