60% of jobs in advanced economies will be hit by AI, warns IMF

The majority of jobs in advanced economies will be impacted by AI, according to new research from the International Monetary Fund (IMF).

The good news is half of those may benefit from the arrival of our AI overlords because of enhanced productivity. The downside is that the other half are jobs where AI could indeed execute tasks currently being performed by humans. That doesn’t necessarily mean all of those jobs will be lost, the IMF states, but it will lead to lower demand for labour and consequently lower wages.

Advanced economies are the most likely to be affected by the advent of AI, according to the IMF, where about 60% of jobs will be impacted. That figure drops to 40% in emerging markets, while in low-income countries the impact will only be felt on a quarter of jobs.

Alas, that’s not necessarily good news for the world’s poorest nations. “Many of these countries don’t have the infrastructure or skilled workforces to harness the benefits of AI, raising the risk that over time the technology could worsen inequality among nations,” writes Managing Director Kristalina Georgieva on the IMF’s blog.

Related reading: HR thought leaders highlight risks of AI in the workplace

AI’s polarising effect

AI-generated inequality won’t only be felt between different nations, but within countries, too. “We may see polarisation within income brackets, with workers who can harness AI seeing an increase in their productivity and wages – and those who cannot falling behind,” writes Georgieva. “Research shows that AI can help less experienced workers enhance their productivity more quickly. Younger workers may find it easier to exploit opportunities, while older workers could struggle to adapt.”

And it’s those who currently earn the most who stand to gain from the influx of AI. “If AI significantly complements higher-income workers, it may lead to a disproportionate increase in their labour income,” says Georgieva. “Moreover, gains in productivity from firms that adopt AI will likely boost capital returns, which may also favour high earners. Both of these phenomena could exacerbate inequality.”

The IMF suggests that governments should create “comprehensive social safety nets”, including retraining of vulnerable workers in AI to reduce inequality.

More AI warnings

The IMF’s warning comes alongside another AI alarm being sounded by the global banking watchdog. In an interview with the FT, Pablo Hernández de Cos, the Chair of the Basel Committee on Banking Supervision, warns that AI could have a detrimental effect on global financial stability.

“Financial stability is only one dimension, there are many other potentially more important consequences related to AI,” he adds. “Issues that if not properly managed could change the course of history not necessarily for the good. If we are not able to give a coordinated global response, the likelihood of getting the right solution to these challenges will be reduced.”