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Friday, June 21, 2024

IMF Analysis: AI’s Global Impact on Jobs and Inequality

In a recent analysis by the International Monetary Fund (IMF), it is projected that artificial intelligence (AI) will impact nearly 40% of all jobs globally. Managing Director Kristalina Georgieva warns that “in most scenarios, AI will likely worsen overall inequality.”

Georgieva emphasizes the need for policymakers to address this “troubling trend” to prevent technology from further stoking social tensions. The IMF’s study reveals that advanced economies may experience a higher impact, with around 60% of jobs affected. Workers in these instances can expect productivity enhancements through AI integration.

However, in the other half, AI may take over tasks traditionally performed by humans, potentially reducing demand for labor and impacting wages. The IMF projects a lower impact in low-income countries, around 26% of jobs, raising concerns about the widening inequality gap among nations.

This analysis aligns with a 2023 report from Goldman Sachs, estimating AI could replace the equivalent of 300 million full-time jobs, acknowledging the potential for new job creation and increased productivity.

Georgieva points out that many developing countries lack the necessary infrastructure and skilled workforce to harness AI’s benefits, posing a risk of exacerbating global inequality. The IMF suggests comprehensive social safety nets and retraining programs for vulnerable workers are crucial for making the AI transition more inclusive.

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This analysis coincides with discussions on AI at the World Economic Forum in Davos, Switzerland, where global business and political leaders are convening. The technology faces increased regulation worldwide, with the European Union reaching a provisional deal on comprehensive laws to regulate AI. China has also implemented some of the world’s first national regulations on AI, including rules on algorithm development and deployment.

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In the United States, President Biden signed an executive order compelling developers to share safety results related to AI with the government. The UK hosted an AI Safety Summit the following month, during which a declaration on the safe development of AI was signed by multiple countries. These regulatory efforts underscore the growing awareness and concerns surrounding the societal impact of artificial intelligence.

Austin Kaiser
Austin Kaiser
Austin Kaiser is a self-taught value investor with over 10 years of experience. He holds an MBA from Florida State University and certifications in Risk Management Assurance and Internal Auditing. Austin covers the Business News category for our site.

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