global economy

How AI Can Impact The Global Economy & Workers

global economy

global economy

Investigating the global development process of AI is essential given its significance and industrial growth, especially in light of the tremendous excitement and concerns it has inspired regarding its potential effects on the global economy.

A new analysis from the International Monetary Fund (IMF) provides insight into the potential effects of artificial intelligence (AI) on the global job market, including its potential to supplement or even replace human labour. The organisation published its results, which showed that AI is affecting more than 40% of occupations globally. While automation and information technology have had an impact on ordinary operations, AI is distinct in that it also has an impact on highly skilled professions.

AI may disrupt over 60% of occupations in industrialised countries as it impacts critical functions now completed by humans. This could diminish labour demand, which could result in lower wages, fewer recruiting opportunities, or the elimination of entire job categories. In contrast, it appears that 26% and 40% of jobs in emerging markets and low-income nations, respectively, are related to AI. The absence of infrastructure or a workforce with the necessary skills to deploy AI could potentially be the cause of this, widening the disparity in wealth and income across the various countries.

Related link: How AI Can Raise Employee Pay

In order to help policymakers create effective policies for their own nations, the IMF has worked to develop an AI Preparedness Index using the research analysis. This index measures readiness in areas such as digital infrastructure, human capital and labour market policies, innovation and economic integration, regulation and ethics, and more. Richer economies, including advanced and some emerging market economies, are generally more likely than low-income countries to be better prepared for AI adoption. However, there is significant variation across countries. This conclusion was reached by IMF staff using the index to evaluate the readiness of 125 countries.

Based on their excellent performance in each of the four categories that were monitored, Singapore, the US, and Denmark had the highest index ratings.
In order to establish safe and responsible AI settings and support the preservation of public trust, nations similar to theirs should prioritise AI research and integration while building strong regulatory frameworks. The top goal for developing countries and emerging markets should be building a solid foundation through workforce competency in digital technologies and investments in digital infrastructure

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