The International Monetary Fund (IMF) has issued a stark warning about the profound labor market disruptions and inequality that AI could cause, urging governments to step up economic protectionism to protect their economies.
In a recent report, the International Monetary Fund highlighted that advances in artificial intelligence technology could lead to significant labor market disruptions, particularly affecting highly skilled occupations. Unlike previous technological shifts, generative AI may lead to significant job losses in roles requiring advanced skills, which could exacerbate economic disparities.
To address these challenges, the IMF recommends that governments strengthen unemployment insurance and other safety nets to support workers displaced by AI developments. Strengthening these measures is necessary to protect the well-being of citizens and maintain economic stability.
Despite these concerns, the IMF recognizes the potential of AI to boost productivity and improve the delivery of public services. However, the rapid adoption of this technology carries significant risks that must be carefully managed. In response, the European Union has proposed the Artificial Intelligence Law, a comprehensive regulation aimed at mitigating risks associated with AI, including potentially banning applications that threaten safety and fundamental rights.
** Educational and training system updates **
Preparing for the future requires modernizing education and training systems. As the labor market develops, there will be a greater need for lifelong learning and opportunities for workers to acquire new skills and adapt to new roles. The IMF report stresses the importance of sector training, vocational training, and reskilling programs to help workers transition to new tasks and sectors in an AI-driven economy.
“We want people to benefit widely from the potential this technology holds and ensure that opportunities are created for them,” said Ira Dabla Norris, Deputy Director of the IMF’s Finance Department and co-author of the report. She noted that “the transition may be painful for workers” who face longer periods of unemployment due to the lack of skills needed in the age of artificial intelligence, which may require more time to acquire compared to the past.
**Industry Insights**
Sheila Flavell, Chief Operating Officer at FDM Group, stressed the need for a collaborative effort between government, education and industry to provide equal opportunities and ensure employees are able to safely maximize the benefits of AI. It has called for a range of apprenticeship schemes and upskilling and reskilling programs to create a digitally skilled multi-generational workforce.
Dr. Adeshola Cole, CEO of Tritek Consulting, stressed the importance of equipping employees with the necessary skills to manage AI development. He highlighted the rush by organizations to adopt AI tools, often without staff with the digital skills to manage AI risks, stressing the need for practical sector-based training.
Employers must provide the learning and development support necessary for individuals to keep up with technological changes and feel confident in using AI solutions effectively, noted Sai Bindi, director of software development at Encompass.
As artificial intelligence continues to transform industries, the IMF warning underscores the urgent need to develop comprehensive strategies to manage its impact on the labor market and ensure equitable economic growth.
