May 22, 2024

Krazee Geek

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The Power of AI: Bridging the Gap Between Economic Growth and Social Equity

2 min read
According to the IMF, the implementation of AI has the potential to increase global productivity and economic growth, but it may also lead to job displacement and exacerbate inequalities.

According to the IMF, the implementation of AI has the potential to increase global productivity and economic growth, but it may also lead to job displacement and exacerbate inequalities.

IMF economists conducted a recent review to assess the potential repercussions of AI on the worldwide job market. Although several studies predict that AI will replace human jobs, it is more likely that technology will supplement human labor. The IMF analysis considers both possibilities.

According to the results, a significant 40 percent of jobs worldwide are at risk of being automated or enhanced through the use of AI.

Throughout history, the introduction of new technologies has primarily affected tasks that are considered routine. However, with the rise of AI, even high-skilled roles may be impacted. This means that advanced economies are at a higher risk from AI, but they also have the potential to gain more benefits compared to emerging markets.

According to the IMF’s study, AI could potentially affect around 60% of jobs in advanced economies. Approximately 50% of these jobs could see improvements in productivity through the integration of AI. However, for the remaining jobs, AI may take over important tasks traditionally performed by humans, resulting in a decrease in labor demand, wages, and hiring. In certain situations, human jobs may even become obsolete due to the use of AI.

According to IMF economists, 40 percent and 26 percent AI exposure is predicted in emerging and developing economies, indicating a lower likelihood of immediate AI disruptions compared to advanced economies. Despite this, the lack of infrastructure and skills in many emerging markets may hinder their ability to utilize AI’s advantages. As a result, this could potentially exacerbate the inequality gap between countries over time.

According to the IMF, the use of AI could potentially lead to inequality within countries. This is because workers who are able to take advantage of AI may see an increase in productivity and higher wages, while those who are unable to do so may face a decline.

Studies have demonstrated that AI has the potential to increase the efficiency of inexperienced employees. As a result, younger employees may have a greater advantage in utilizing AI compared to their older counterparts who may face challenges in adjusting to its use.

Developed countries are more equipped to embrace AI, but they still need to focus on promoting innovation, integration, and regulation to ensure its safe and ethical implementation. On the other hand, developing nations should prioritize building digital infrastructure and acquiring skills to catch up in the AI field.

The IMF has implemented an AI Preparedness Index to aid nations in creating successful policies. This index evaluates readiness in various aspects, such as digital infrastructure, human capital, innovation, and regulation. More affluent economies, such as Singapore, the US, and Denmark, have demonstrated greater preparedness for integrating AI.

The age of AI has dawned, and taking proactive steps is essential in order to guarantee that its advantages are distributed equitably among everyone.

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