AI could disrupt 40% of global jobs – IMF warns

Bangkok|| The International Monetary Fund (IMF) has warned that Artificial intelligence (AI) could reshape about 40 per cent of jobs globally, downgrading or eliminating some roles, while improving productivity in others.

Kristalina Georgieva, managing director of the IMF, said the estimate does not mean that 40 per cent of jobs will disappear; rather, it reflects the range of ways AI could reshape work, with the effects varying across countries and occupations.

“The impact over time on jobs globally we estimate to be around 40 percent of jobs either augmented, or downgraded, or eliminated,” Georgieva said during a World Bank Group flagship session, titled, “Small AI: More and Better Jobs.”

She said early evidence from the United States showed that routine, repetitive jobs were shrinking, while demand for workers with AI skills was rising. Although the net employment impact in the area studied was positive, much of the growth was concentrated in lower-paying jobs, raising concerns about the quality of work being created.

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Young people entering the labour market were particularly exposed because routine entry-level roles often provide the first step towards more skilled and better-paid employment.

“First we need to carefully research what is happening in the labour market,” she said, urging governments to gather evidence and respond to emerging changes rather than rely on assumptions about AI’s effects.

She also called for education systems to shift towards lifelong learning as workers increasingly need to update their skills. Governments, she said, must consider how to finance public services if AI changes the balance between labour and capital, potentially weakening traditional sources of tax revenue.

Despite the risks, Georgieva said broader adoption of AI could support growth across Asia. The IMF estimates that the technology could add between 0.5 and one percentage point to growth in advanced Asian economies, and between 0.2 and 0.8 percentage points in emerging Asia.

However, she cautioned that developing economies would need reliable electricity, digital infrastructure, relevant skills and safeguards against misuse to benefit from the technology.

Ajay Banga, president of the World Bank Group, said the institution was placing jobs at the centre of its development agenda as about 1.2 billion young people are expected to reach the age of 18 over the next 15 years.

The challenge, he said, was to translate that demographic expansion into productive employment, with governments providing the infrastructure and policies needed to attract investment while private businesses generate most jobs.

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Banga said the private sector accounts for between 75 and 85 per cent of employment in countries, making investment and the reduction of risks facing businesses essential to job creation.

He argued that smaller, locally relevant AI applications could offer developing economies a way to raise productivity without relying solely on the large-scale language models attracting attention in advanced economies.

The World Bank is targeting opportunities in infrastructure, agriculture, primary healthcare, tourism and manufacturing, sectors Banga said could support employment while benefiting from AI-enabled tools.

He cited healthcare clinics in Indonesia, where nurses could use simple AI applications to assess patients and connect with remote doctors, and farmers in India who can use mobile phones to identify crop diseases and access information about inputs, credit and markets.

Such applications could help workers and small businesses overcome barriers to expertise, technology and market access.

“Actually the opportunity from small AI to build jobs and build productivity is enormous,” Banga said, arguing that the technology could help emerging and lower-middle-income economies create employment suited to local needs.

Tharman Shanmugaratnam, president of Singapore, warned that economic growth alone would not guarantee stronger employment, pointing to China, India and developing Southeast Asia, where growth has not always translated into sufficient job creation.

AI could widen that gap if governments remained passive, he said, while automation risked hollowing out the middle of the workforce and weakening opportunities for workers to advance.

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Tharman identified manufacturing, renewable energy, healthcare and AI-enabled entrepreneurship as potential sources of new jobs. He said developing economies should not abandon manufacturing, particularly where labour costs remain competitive, and noted that renewable energy investment could generate employment while strengthening energy security.

He also urged governments to work with businesses to protect pathways into employment as demand for fresh graduates weakens. Universities and other tertiary institutions, he said, should place greater emphasis on applied learning, internships and workplace experience.

Tharman said AI’s impact would unfold task by task, giving employers and workers time to adapt, but warned that failing to help young people secure their first jobs could undermine their skills development and confidence in the future.

The challenge, he said, was to use technology to support continued convergence between developing and advanced economies, rather than create a new divide in opportunity.