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Generative AI Set to Disrupt Jobs and Widen Inequality, IMF Warns

The IMF has expressed ‘profound concerns’ about massive labour disruptions and the impact of generative AI on jobs around inequality, urging governments to do more to protect their economy.

In a recent report, the IMF highlighted that as AI technology advances, it could lead to significant disruptions in the job market, particularly affecting higher-skilled jobs. Unlike previous technological shifts, generative AI might cause substantial job losses in professions that require advanced skills, potentially widening the gap between different economic groups.

To address these challenges, the IMF suggests that governments need to strengthen their economic protections. This includes improving unemployment insurance and other safety nets to support workers who may lose their jobs due to AI advancements. By enhancing these measures, countries can better safeguard their economies and the well-being of their citizens.

Despite these concerns, the IMF acknowledges the considerable potential of AI to boost productivity and improve the delivery of public services. However, the rapid adoption of this technology also introduces significant risks that need to be managed carefully.

Sheila Flavell CBE, COO of FDM Group, commented: “Businesses shouldn’t have a one-size-fits-all approach to adopting artificial intelligence, so they also shouldn’t have a one-size-fits-all approach to developing AI skills. The landscape has shifted so quickly that there needs to be a collaborative effort between government, education and industry to provide a level playing field and ensure that staff can safely maximise the benefits of AI. A combination of apprenticeship schemes and upskilling and reskilling programmes can open up multiple routes to develop practical AI skills, reaching a wider pool of staff and creating digitally adept multigenerational workforces.”

“Many staff are using AI tools such as ChatGPT in their day-to-day roles and that won’t change any time soon, so providing dedicated skills training is a must.”

In response to these risks, the European Union has taken a leading role by proposing the AI Act, a comprehensive regulation aimed at mitigating the dangers associated with AI, including the potential for banning applications that threaten safety and fundamental rights.

To prepare for the future, the IMF emphasises the importance of updating education and training systems. As the job market evolves, there will be a greater need for lifelong learning and opportunities for workers to reskill and adapt to new roles. The report suggests that sector-based training, apprenticeships, and reskilling programs will be crucial in helping workers transition to new tasks and sectors in an AI-driven economy.

“We want people to be able to benefit more broadly from the potential that this technology holds, and we want to ensure that there are opportunities created for people,” said Era Dabla-Norris, deputy director at the IMF’s fiscal affairs department and co-author of the report. She added that the “transition could be painful for workers” facing the prospect of higher and longer unemployment because “older workers may not have the skills that are needed in the age of AI and it may require more time than in the past to acquire these new skills”.

Dr Adeshola Cole, CEO, Tritek Consulting commented: “The rise of AI isn’t slowing down and staff need to take the initiative and equip themselves with the necessary skills to oversee its development. The majority of organisations are rushing to adopt and upgrade AI tools and systems, but often lack the digitally skilled staff to manage AI’s risks, so need access to a talent pool of AI experts. Taking part in training courses is a great way for staff to bridge the skills gap, focusing on sector-based training that provides practical experience using AI tools, making themselves invaluable as businesses continue to rely on AI.”

Sai Bendi, Software Development Manager, Encompass Corporation, commented: “While the acceleration of new technologies, such as Generative AI, has the potential to act as a driver for significant transformation across industries, in order for individuals to progress, it is important that employers focus on providing the learning and development support needed to be able to keep up with change and feel confident to best utilise the solutions at play.”