IMF: AI may Exacerbate Inequality among Advanced and Low-Income Economies
Rifki AriaTable of Contents
The latest IMF report, ‘Gen-AI: Artificial Intelligence and the Future of Work,’ projects that AI development may replace at least 60% of jobs in advanced economies and 40% in low-income economies. In this context, it wouldn’t be surprising if companies soon prefer machines to humans, especially since employers will not hesitate to replace workers with machines for better productivity.
Intriguingly, the report suggests that AI displacement risks extend beyond low and middle-skilled workers, putting pressure on high-skilled workers to enhance their complementarity with the technology. They are no longer immune to tech-based disruptions in the market since AI’s augmented algorithms can handle not only simple, repetitive tasks but also complex ones like creative problem-solving and advanced data interpretation. In this article, we will guide you through the report’s findings, helping you understand how they might impact you and your job.
Different Impacts of IMF Emerging and Advanced Economies
The IMF’s report categorizes occupations into three groups: high-exposure, high-complementarity; high-exposure, low-complementarity; and low-exposure. In this context, people with high-exposure, low-complementarity jobs are at the highest risk of being displaced by AI because the technology could easily replace them at work due to the low cognition and interpersonal interaction needed in those jobs. If you believe AI can easily replace you, then you might be in this tier of high-exposure, low-complementarity workers.
Interestingly, advanced economies have a higher proportion of high-exposure jobs, regardless of their complementarity, than emerging and low-income economies. The report indicated that 27% and 33% of jobs in advanced economies are high-exposure, high-complementarity, and high-exposure, low-complementarity, respectively. Meanwhile, emerging economies recorded 16% and 24%, and low-income economies had 8% and 18% for the same respective categories. The following bar graph illustrates the shares of jobs in high-exposure, high-complementarity, and high-exposure, low-complementarity categories:
Our Take
The fact that advanced economies have more high-exposure jobs than their emerging and low-income counterparts places these economies in a superior position to benefit from AI adoption. Consequently, the gap between these three economic categories may widen to an unprecedented level, given the substantial enhancement of technology in boosting companies’ productivity and, thus, competitiveness.
An interesting statistic presented in the report suggests that women face a higher level of exposure to AI than men, implying that women encounter both elevated risks and more opportunities to advance through adequate AI adoption. Another noteworthy finding indicates that younger workers exhibit higher complementarity than their older counterparts, particularly because they are more tech-savvy.
As the report suggests, human cognition and interpersonal interaction stand out as two skills that AI may find challenging to replicate. If you believe your job does not require these skills, you are at risk of being displaced by AI. Therefore, I recommend you start developing your skills and qualifications to increase your complementarity with AI. That is the only way to survive in a world where AI continues to evolve as a dominant force in employment.
Reference
Cazzaniga, M., Jaumotte, F., Li, L., Melina, G., Panton, A. J., Pizzinelli, C., Rockall, E. J., & Tavares, M. M. (2024). Gen-AI: Artificial Intelligence and the Future of Work. In Staff Discussion Notes (9798400262548/2617-6750). International Monetary Fund. Retrieved March 4, 2024, from https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2024/01/14/Gen-AI-Artificial-Intelligence-and-the-Future-of-Work-542379
