The International Monetary Fund (IMF) has issued a stark warning about the profound labour disruptions and inequality that generative AI may cause, urging governments to bolster economic protections to safeguard their economies.
In a recent report, the IMF highlighted that advancements in AI technology could lead to significant job market disruptions, particularly affecting higher-skilled professions. Unlike previous technological shifts, generative AI might result in substantial job losses in roles requiring advanced skills, potentially exacerbating economic disparities.
To address these challenges, the IMF recommends that governments strengthen unemployment insurance and other safety nets to support workers displaced by AI advancements. Enhancing these measures is essential to protecting the well-being of citizens and maintaining economic stability.
Despite these concerns, the IMF acknowledges AI’s potential to boost productivity and enhance public service delivery. However, the rapid adoption of this technology introduces significant risks that must be managed carefully. In response, the European Union has proposed the AI Act, a comprehensive regulation aimed at mitigating AI-related dangers, including potentially banning applications that threaten safety and fundamental rights.
**Educational and Training System Updates**
Preparing for the future requires 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 IMF’s report emphasizes the importance of sector-based training, apprenticeships, and reskilling programs to help workers transition to new tasks and sectors in an AI-driven economy.
“We want people to benefit broadly from the potential that this technology holds and ensure that opportunities are created for them,” said Era Dabla-Norris, deputy director at the IMF’s fiscal affairs department and co-author of the report. She noted that the “transition could be painful for workers” facing longer unemployment spells due to a lack of necessary skills in the age of AI, which may require more time to acquire than in the past.
**Industry Insights**
Sheila Flavell CBE, COO of FDM Group, stressed the need for a collaborative effort between government, education, and industry to provide a level playing field and ensure staff can safely maximise AI benefits. She advocated for a combination of apprenticeship schemes and upskilling and reskilling programmes to create digitally adept multigenerational workforces.
Dr Adeshola Cole, CEO of Tritek Consulting, emphasised the importance of staff equipping themselves with the necessary skills to manage AI development. He highlighted the rush by organisations to adopt AI tools, often without having the digitally skilled staff to manage AI risks, underscoring the need for practical sector-based training.
Sai Bendi, Software Development Manager at Encompass Corporation, pointed out that employers must provide the learning and development support needed for individuals to keep up with technological changes and feel confident in utilising AI solutions effectively.
As generative AI continues to transform industries, the IMF’s warning underscores the urgency for comprehensive strategies to manage its impact on the job market and ensure equitable economic growth.