2024-02-24 11:58:38
Artificial intelligence (AI) might reshape the division of labor and many professional functions, according to a publication by the Policy Center For The New South (PCNS) entitled “How will AI affect the economy ? “.
Authored by PCNS Senior Fellow Otaviano Canuto, this publication states that “in the economy, AI promises to reshape many job functions, as well as the division of labor and the relationship between workers and physical capital,” adding that this will have consequences in areas beyond the economy, including national security, politics and culture. And to note that if the impact of automation has been felt on repetitive work, AI indeed concerns tasks carried out by a qualified workforce.
According to Canuto, in segments of the work process where human supervision of AI will continue to be necessary, the trend will be a substantial increase in productivity and labor demand. In other segments, AI might lead to significant displacement or the simple elimination of jobs. On the other hand, systematically increasing aggregate productivity might, in principle, strengthen economic growth and thus support increases in aggregate demand, generating employment opportunities that would compensate for job destruction, Mr. Canuto points out.
In this wake, he continues that AI might lead to the emergence of new sectors and professional functions, while others will disappear, in a dynamic that goes beyond “simple intersectoral reallocation”. In addition to the effects on employment and the distribution of wage income, the distribution of income will also depend on the impact of AI on capital income. These will tend to grow in businesses that create and exploit AI technologies or have shares in AI-driven industries.
Depending on the implications in terms of companies’ “market power”, there will be effects on the distributions of capital income and between capital and labor, notes the Senior Fellow. In this publication, Mr. Canuto also cites the results of exploratory research on the impact of AI on the future of work published by the International Monetary Fund (IMF) on January 14, 2024.
This research shows that 60% of jobs in advanced economies will be affected, while this percentage drops to 40% in emerging economies and 26% in low-income countries, due to differences in their structures. current employment opportunities, he reports.
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