A tsunami is hitting labour market with AI, we must invest in skills: IMF chief

DAVOS — A tsunami is hitting the labour market and jobs are being both enhanced and replaced by artificial intelligence (AI), Kristalina Georgieva, Managing Director, International Monetary Fund (IMF), has said.

Speaking at a session during the World Economic Forum (WEF) annual meeting in Davos, she said the world as a whole is already experiencing the arrival of AI, but “I do worry about the accordion of opportunities that are much more present in some places than in others”.

"AI is quickly reshaping economies. Some roles grow; others disappear. We must invest in skills and prepare communities," she stressed.

AI is boosting productivity in translation and interpretation and for research analysts, it is enhancement, not replacement. But she worried about communities where AI is not present.

The IMF calculates that on average, 40 per cent of jobs are touched by AI either enhanced or scrapped or changed quite significantly without implications for better pay. In advanced economies, this is 60 per cent, but in low-income countries, 20 to 26 per cent, she said.

“We have a fairly big range of impact on global growth from 0.1 to 0.8 per cent”. A 0.8 per cent boost of productivity would make growth higher than pre-pandemic, Georgieva told the gathering.

At the session, Ashwini Vaishnaw, Minister of Electronics and Information Technology, said that creating a large AI model doesn’t give you power as a country.

We have to understand the economics of what he calls the 5th Industrial Revolution.

“The economics of this revolution is going to come from ROI. ROI is going to come from deploying the lowest cost solution to get the highest possible return,” Vaishnaw said.

The race is on, said Khalid Al-Falih, Minister of Investment, Ministry of Investment of Saudi Arabia.

“Everybody wants to build the infrastructure for it, but the essence of AI's power is it has to be accessible. Diffusion is not just within economies that have to compete, but I believe it has to be done globally,” he mentioned.