Artificial Intelligence Spring: Implications On Labour Market

The global surge in Artificial Intelligence (AI) development is poised to revolutionise the world economy, with implications for the labour market. The rapid progress, cost reduction, and ease ofAl adoption suggest an imminent transformation that could reshape the future ofwork. This surge in Al raises concerns aboutjob displacement across various sectors like finance, healthcare, and Information Technology (IT) due to its ability to automate routine and even non-routine tasks. Al can train machines to learn from experiences and adapt to new inputs, which empowers them to perform highly skilled, human-centric tasks that may displace jobs involving cognitive and critical thinking skills to some extent. While Al holds the potential to enhance productivity and foster long-term growth (productivity effect), there are immediate risks of unemployment (displacement effect). Limited studies on the impact of Al, particularly in developing and least-developed countries, highlight the need for comprehensive policy action, specifically in promoting new skills. Recognising the varying levels of Al adaptation globally, the G20 forum is crucial for initiating preparedness, and regulating Al with appropriate technological infrastructure and financial support. The preceding G20 New Delhi Leader’s Declaration reiterates commitment to the G20 Al principles (2019), urging leaders to pursue a pro-innovation governance approach that maximises benefits while addressing associated risks. In this light, this policy brief will delve into understanding the potential effects of AI globally on labour market displacement and subsequent socio-economic inequalities arising from its widespread adoption. We recommend G20 to establish a Global Centre on Artificial Intelligence and Governance (GCAIG). The GCAIG would assess and provide governance solutions to risks associated with Al advancement, particularly employment, wages, skill development and socio-economic inequality on a global scale.