While AI has the potential to enhance productivity, boost global growth, and raise incomes, it also poses risks such as job displacement and increased inequality.
The International Monetary Fund (IMF) conducted an analysis on the potential impact of AI on the global labor market, revealing that almost 40 percent of global employment is exposed to AI. Advanced economies, facing greater risks and opportunities from AI, may see 60 percent of jobs impacted, with half benefiting from AI integration and the other half facing lower wages or job loss. In contrast, emerging markets and low-income countries face fewer immediate disruptions but may struggle to harness AI benefits.
The potential effects of AI on income and wealth inequality within countries. AI could lead to polarization within income brackets, favoring workers who can harness AI while leaving others behind. AI’s impact on labor income will depend on its complementarity with high-income workers, potentially exacerbating overall inequality.
The IMF emphasizes the importance of proactive policymaking to address the potential negative impacts of AI, including the need for comprehensive social safety nets and retraining programs for vulnerable workers. To assist countries in crafting effective policies, the IMF has developed an AI Preparedness Index, measuring readiness in areas such as digital infrastructure, human capital, innovation, and regulation. Wealthier economies tend to be better equipped for AI adoption, with Singapore, the United States, and Denmark scoring the highest on the index.
Emphasizing the need for advanced economies to prioritize AI innovation and integration while developing robust regulatory frameworks. For emerging markets and developing economies, the focus should be on laying a strong foundation through investments in digital infrastructure and a digitally competent workforce.