A report by the International Monetary Fund stated that AI will affect almost 40% of jobs around the world. While it may replace some roles completely, others might have to make spaces for it in their working patterns. Therefore, a need arises to carefully analyse and make decisions on how to balance the positive and the negative side of AI, which is on its way to change how the economy across the globe operates. We are on the edge of a technological revolution that could give a headstart to productivity, increase global growth and also improve the income of workers around the world. Let us find out how.
The impact of AI on the job economy
Let us look at the various fields where AI has created a niche for itself and taken over many human jobs
Manufacturing
AI provides automation in the manufacturing segment. Robots now handle repetitive tasks like welding and assembly, improving efficiency and precision. This has led to the loss of human jobs but created new jobs as well in terms of personnel who can operate the AI equipment. Companies like Tesla are also using robots in their manufacturing process.
Customer services
This was one of the most human-centric and mass hiring segments in a vast country like India. But with the entry of AI into the picture, chatbots have replaced human employees to a great extent. The use of AI makes companies profitable, but impacts the jobs of so many less qualified individuals who might not be skilled enough for higher portfolios.
Healthcare services
While doctors are still an important part of disease prognosis and diagnosis, in developing countries like India, there is a shortage of qualified medical professionals. Here is where AI enters the scene. Niramai, a health-tech startup, uses AI for early-stage breast cancer detection using thermal imaging. In the UK, Alphabet’s DeepMind developed an AI system that can diagnose over 50 eye diseases with accuracy.
Agriculture
Earlier, people considered agriculture a labour-centric sector. But then machines came and processes became automated. Now, with the coming of AI, startups like Aibono and CropIn use AI to provide farmers with real-time suggestions about crop health, soil quality, and weather patterns. In the United States, John Deere has developed AI-powered machinery that can plant, water, and harvest crops autonomously.
Retail industry
AI is used to create personalized shopping experiences for users. Reliance Industries uses AI to predict consumer behaviour and personalize recommendations for customers.
Risks involved with AI, and what does it mean for the economy?
- AI will affect the income of both less and highly skilled workers in countries. Those workers who are educated shall observe an increase in their salaries and thus can improve their lifestyle.
- However, the less skilled and uneducated workers in the developing countries or older workers who are not as technologically sound to adapt to the fast changes of AI and machine learning.
- AI’s effect on the payouts of workers is dependent on the limit to which it can complement the work of skilled and high-income professionals.
- If AI helps in increasing the salaries of higher-income workers, it may lead to a sharp increase in their wages.
- Additionally, the increased productivity levels of firms using AI will boost their capital returns. Both of these phenomena could increase inequality.
Will AI hurt the economy?
In all probability, AI will likely create a negative impact on the overall economy. This seems a troubling trend that policymakers must proactively address in order to prevent the technology from further stoking social tensions. Countries must establish comprehensive social safety nets and offer retraining programs for vulnerable workers. In doing so, we can make the AI transition more inclusive, protecting livelihoods and curbing inequality.
The future – an inclusive AI-driven world
The use of AI has taken over businesses around the world. The adoption of AI at this fast speed shows the need for policymakers to take steps. Organizations like the IMF have developed an AI Preparedness Index that measures readiness in areas like digital infrastructure, human capital and labour-market policies, innovation and economic integration, regulation and ethics.
Using the index, IMF staff assessed the readiness of 125 countries. The findings reveal that wealthier economies, including advanced and some emerging market economies, tend to be better equipped for AI adoption than low-income countries. Though there is considerable variation across countries. Singapore, USA and Denmark posted the highest scores on the index, based on their strong results in all four categories tracked. The AI era is upon us, and it is still within our power to ensure it brings prosperity to all.
