THE use of artificial intelligence (AI) is expected to expand and change global economic activity, according to a World Economic Forum (WEF) report that indicated 50 percent of respondents expect technology to become commercially disruptive by the end of 2024. The International Monetary Fund (IMF), however, had words of caution, saying AI remains a threat to 60 percent of global jobs.
All Chief Economists of the WEF expect generative AI to boost global productivity and increase GDP worldwide. The most optimistic estimate is for AI deployment to increase global output by as much as 30 percent by the end of the century.
“One estimate suggests that generative AI alone could boost global productivity growth by 1.5 percentage points a year and increase global GDP by 7 percent over a 10-year horizon,” WEF said.
However, the International Monetary Fund (IMF) said AI remains a threat to 60 percent of global jobs.
While Emerging Market economies are less affected by AI, the lack of infrastructure and digital skills to support this technology could worsen inequality in these countries.
“Model simulations suggest that, with high complementarity, higher-wage earners can expect a more-than-proportional increase in their labor income, leading to an increase in labor income inequality,” IMF said in a discussion paper.
“This would amplify the increase in income and wealth inequality that results from enhanced capital returns that accrue to high earners,” it added.
Efforts to make AI more inclusive means the adoption of digitalization in government technology or “govtech.” Many governments across the world during the pandemic made use of digital infrastructure to distribute financial aid.
IMF said apart from financial aid, AI could also help in informed decision making, identifying service gaps, detecting fraud and corruption, and customizing local interventions.
The paper added that AI tools could free up time and resources, which could be better allocated to key sectors for inclusion—for example, agriculture, health care, and education.
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