Table of Contents
This week the annual World Economic Forum took place in Werden, Switzerland. In addition to China and the conflicts in Gaza and Ukraine, the topic of artificial intelligence was also on the agenda.
Davos is considered the center of numerous conspiracy theories. After all, the world’s economic and political elite meet here every year. But unlike in the past, the importance of the World Economic Forum has recently been declining.
IMF: Dramatic changes are coming
The objective of the World Economic Forum is basically to initiate a dialogue to strengthen the economic framework. Face-to-face meetings and background discussions are meant to build trust, which is reflected in better economic relations.
But the forecast of the International Monetary Fund (IMF) quite shocked the participants. It is clear to observers that artificial intelligence will change the world of work forever. However, the IMF believes the effects will be more dramatic.
Workers will become redundant and wages will fall
A new IMF study shows that artificial intelligence will affect around 60 percent of jobs in economically advanced countries. While this may have a positive impact on employment for half of the employees, the other half may have to look for new ones.
Because there artificial intelligence will take over the work of those people who will then become redundant. Although jobs will not disappear, the use of artificial intelligence will lead to lower salaries. The crypto industry has also long recognized the importance of this topic and has launched new coins that take advantage of the possibilities of artificial intelligence.
Retraining will protect
However, the risk potential decreases the lower the economic strength of the country. The IMF expects an impact on 40 percent of jobs in developing countries and “only” 26 percent in developing countries. The best “protection” against this development is the retraining of the workers concerned.
However, the IMF also points out that this is a forecast based on assumptions. Depending on the speed of the spread of artificial intelligence and the emergence of new industries, the actual numbers could differ from the forecast.
An inclusive world driven by artificial intelligence
Artificial intelligence is being integrated into businesses around the world at a remarkable pace, underscoring the need for policymakers to act.
To help countries make the right policies, the IMF has developed an AI Readiness Index that measures readiness in areas such as digital infrastructure, human capital and labor market policies, innovation and economic integration, and regulation and ethics.
The human capital and labor market policy component, for example, assesses elements such as years of schooling and labor market mobility and the proportion of the population dependent on social security. The regulatory and ethical component assesses the adaptability to digital business models of the country’s legal framework and the presence of strong procedures for effective enforcement.
Using the index, IMF staff evaluated the preparedness of 125 countries. The findings show that wealthier economies, including advanced and some emerging market economies, tend to be better equipped to adopt AI than low-income countries, although there are significant country differences between them. Singapore, the United States and Denmark ranked highest in the idex based on their good results in all categories.