The IMF and OECD warned that AI could widen the gap between rich and poor nations. While AI might boost global growth, many developing countries lack the infrastructure to keep up. Era Dabla-Norris said, "For many developing economies, the critical question is whether they can adopt and diffuse AI."
Synopsis
Artificial intelligence holds the potential to significantly enhance global economic growth and productivity rates. However, poorer countries and smaller businesses face severe challenges in adopting this technology due to inadequate resources. Young and entry-level workers are particularly at risk as AI increasingly automates entry-level tasks traditionally used for gaining experience. Reports indicate significant layoffs occurring in various companies as they adopt AI for efficiency.
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Artificial intelligence could boost global growth, but poorer countries, smaller companies and younger workers risk missing out unless access to power, digital infrastructure and skills improves, according to officials from the IMF and OECD.
The warning comes as massive investment in chips and AI infrastructure has helped support global growth and drive stock markets to record highs, while raising concerns about whether companies can generate sufficient returns on large spending commitments as borrowing costs rise.
"For many developing economies, the critical question is whether they can adopt and diffuse AI," Era Dabla-Norris, deputy director of the International Monetary Fund's Fiscal Affairs Department, told the Reuters Global Markets Forum.
Effective AI adoption could add up to 0.5% to annual global growth over the medium term, the IMF estimates.
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"But the aggregate productivity evidence, so far, is much less," Dabla-Norris said.
The Organisation for Economic Co-operation and Development estimates AI could add 0.4% to 1.2% to annual productivity growth across its member countries. But its chief economist, Stefano Scarpetta, said that workplace use trails consumer use, with only limited adoption in core business functions.
"There is a large gap between exposure and actual use," Scarpetta said.
The IMF estimates that about 40% of jobs worldwide could be exposed to AI, as reports of mass layoffs gather pace.
Barclays said it was cutting around 5,000 jobs this year as it uses technology including AI to reduce costs and improve returns. EBay is reported to be laying off 9% of its workforce, while Qualcomm is expected to cut jobs globally in a "performance-focused reduction".
Dabla-Norris said younger and entry-level workers could be particularly vulnerable if AI takes over tasks through which employees traditionally gain experience.