A new IMF study, titled Gen-AI: Artificial Intelligence and the Future of Work, raises concerns about job displacement and deepening inequality as this nascent technology because ever more a business imperative.

According to the IMF, as AI permeates various sectors, it is critical to strike a delicate balance through well-crafted policies that harness its potential for the greater good.

The research found. that almost 40% of global employment is susceptible to the impact of AI. While historical patterns of automation primarily affected routine tasks, the unique capability of AI to influence high-skilled jobs presents both risks and opportunities, according to the IMG.

Advanced economies, where approximately 60% of jobs are at risk, may experience both productivity enhancements and potential job losses. In contrast, emerging markets and low-income countries face fewer immediate disruptions, yet the lack of infrastructure may hinder their ability to capitalise on the benefits of AI.

Beyond job displacement, the study also illustrates how AI could exacerbate income and wealth inequality within countries. Workers adept at harnessing AI may witness increased productivity and wages, contributing to polarisation within income brackets.

The IMF says that policy makers must proactively address these challenges by establishing comprehensive social safety nets and implementing retraining programs for vulnerable workers, ensuring a more inclusive transition to an AI-driven world, preserving livelihoods and curbing inequality.

To aid countries in formulating effective policies, the IMF has introduced an AI Preparedness Index, assessing readiness based on digital infrastructure, human capital policies, innovation, economic integration, and regulation/ethics.

The findings reveal that wealthier economies, like Singapore, the United States, and Denmark, tend to be better equipped for AI adoption. This underscores the importance of prioritising AI innovation and integration while developing robust regulatory frameworks in advanced economies.

Conversely, emerging market and developing economies should focus on foundational investments in digital infrastructure and a digitally competent workforce.

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As AI becomes an integral part of global businesses, swift action by policymakers is essential to ensure that no one is left behind. While there is certainly concerns to be addressed, the IMF’s study takes has an overall positive tone, on the priviso appropriate regulatory action is taken to meet the challenges of AI integration, stating that the transformative power of the technology is still within our control, and with careful policy considerations, it can be harnessed to benefit humanity on a global scale.

The AI Act proposals are scheduled for a vote in the European Parliament early this year, with the legislation expected to come into effect no earlier than 2025. Meanwhile, the United States, United Kingdom, and China have not yet released their respective AI guidelines.