Elif Bas | 1 May 2024

Summary

• The global economy is adopting AI, raising questions and concerns regarding workforce transformations, white-collar job security and the future of work. 

• Implications are predicted to manifest distinctly for different genders, industries, and economic contexts. Clerical and Administrative jobs are amongst the most likely to become fully automated. 

• As businesses continue to adopt AI, governments will likely invest in necessary infrastructure and training to foster and sustain a digitally competent workforce. 

The widespread adoption of artificial intelligence (AI) and its implications permeate into all realms of life – especially the economy. Enthusiasts praise AI’s ability to increase efficiency by automating repetitive processes, such as administrative and clerical tasks. Positions including but not limited to customer service, retail, and sales can complete tasks faster, more accurately, and cost-effectively with AI, raising concerns over job displacements and particularly impacting women who occupy the majority of vulnerable jobs. For instance, as stores increasingly implement self-checkout systems, cashiers are among the most vulnerable to automation. In the US and Europe, roughly two-thirds of current jobs are exposed to some degree of AI automation, while gen AI could substitute one-fourth of current work.  

Whilst historically industrial revolutions predominantly impacted lower-skilled jobs, AI shifts focus toward workforce transformation in advanced economies. The IMF estimates that 40% of global employment is somehow exposed to and will be affected by the adoption of AI. Workforce vulnerability differs globally, as 60% of jobs in advanced economies are estimated to be affected, while 40% and 26% are in emergent and developing economies, respectively. Overall, Goldman Sachs estimates that 300 million full-time jobs worldwide could become fully automated. South Asia is predicted to experience significant changes due to its dominant informal sector and prevalent gig economy. Since business processes and microtasks are often outsourced to South Asia or Africa, the majority of workers in South Asia do not have set wages or work hours and often earn money on digital labour platforms. In the Philippines, 20% of jobs are estimated to become fully automated, given that over 80% of the 1.3 million Filipinos currently employed in business-process outsourcing are expected to lose their jobs.  

Nonetheless, while advanced economies have bigger service sectors and are more vulnerable to potential changes, according to the AI preparedness index, they are also best equipped to adopt AI, owing to their investments in human capital, a robust digital infrastructure and AI governance frameworks. Conversely, low-income economies lack the infrastructure and human capital. Therefore, they are less exposed to changes but equally unable to harness the potential of AI. International geopolitical dynamics are thus likely to shift, potentially deepening digital and wage inequalities if not addressed urgently and adequately. Policymakers need to develop economic strategies which incorporate tech adoption, upskilling and the structural transformation of their labour force. 

Forecast

• Short-term

  • Businesses and governments will likely continue to adopt and integrate AI, urging policymakers to create regulations. Governments will likely begin to deliver upskilling and training programmes to enhance job security and mitigate possible adverse side effects. 

• Medium-term

  • Without adequate preparation, temporary job displacement and disruptions might occur. The AI job market will consolidate itself and expand further over time, creating the need for public-private partnerships to foster a competent workforce. Emerging and developing nations will most likely invest in the needed infrastructure, hardware, and human resources to benefit from AI technologies. 

• Long-term

  • As AI becomes integral, some jobs might be fully automated, yet the majority will likely be transformed to complement human work, necessitating lifelong learning to ensure the continuous supply and adaptation of skilled workers to evolving technologies. AI governance is likely to evolve to address ethical, legal, and social implications to accommodate its safe usage.