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AI and its impact on labor market
AI and its impact on labor market

March 29, 2024

AI

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The rapid progress of artificial intelligence has gained global attention, causing both enthusiasm and concern. It is frequently perceived as a threat to jobs; however, a more precise characterization is that AI reshapes job roles.

According to a recent analysis by the IMF, approximately 40% of worldwide employment faces exposure to AI, which is more likely to affect high-skilled jobs. Therefore, it is the developed nations that are more threatened by AI, where 60% of jobs could be affected. Whereas, it is 40% for emerging countries, thus facing a lower risk vis-à-vis the advanced countries. However, many of the emerging and low-developed countries (LDCs) often lack the requisite infrastructure or skilled workers to leverage the advantages of AI, thus exacerbating inequalities among countries.

                                                                      Source: IMF

 

Which jobs are more at threat from AI? Repetitive tasks that consume too much human effort are being automated. This way, human capital can be put to more meaningful and creative work. For instance, jobs like data collection and processing, basic customer services (chatbots, automated phone systems), accounting tasks, and clerical jobs can be easily automated. A good proportion of companies have already made investments or are planning to invest in automation.

From a gender perspective, women face a disproportionately larger risk of AI taking over their jobs. While 4%–8% of jobs held by females worldwide are at risk, the corresponding number for males ranges from 1%–3%. (Source: ILO)

NOT EVERYTHING IS GLOOMY...

AI will create new job opportunities, particularly in STEM roles. The demand for talent in profiles such as data scientists, software engineers, and prompt engineers is most likely to go up significantly. Therefore, people can learn these skills to be ahead of the game. Women especially need to grab the opportunities by reskilling or upskilling themselves, as there is quite a large gender gap in STEM roles. The data from WEF says that nearly 49% of the entire workforce are women, but only 29% work in STEM profiles.

Moreover, some sectors are not much impacted by AI, like nursing, teaching, and childcare, since these require human attention, reflecting that not everything can be done by a ‘machine’.

We must also realize that the shift to artificial intelligence is not going to be sudden. It is true that AI will automate certain human tasks, which might render some people unemployed. However, as the Pew research says, the transition is going to take about half a century; therefore, it is a gradual process. The job roles will keep evolving. In the coming time, AI will be implemented in almost every activity, and for that, we must be ready to adapt.

The policymakers must also ensure that technology doesn’t create any social conflict because AI could increase inequality (since those who have access to AI can upskill or reskill themselves and be in a better position in terms of income and standard of living). Hence, it is very crucial that AI be made inclusive, curbing inequality.

 

 

 


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