World Economic Forum summit : Gita Gopinath discussed AI's diverse challenges and impact on labor markets

During the World Economic Forum summit in Davos, Switzerland, Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), spoke with CNBC-TV18 Managing Editor Shereen Bhan in an exclusive interview about the revolutionary effects of artificial intelligence (AI) on the global economy.

The topic of artificial intelligence (AI) and its potential to disrupt multiple industries and revolutionize occupations was brought up early in the talk. Gopinath provided insights from an extensive study carried out by the IMF when questioned about her thoughts on the potential impact of AI on the world economy.

40% of jobs worldwide are expected to be impacted by AI

Gopinath outlined the various issues surrounding artificial intelligence (AI), from disinformation to its effects on labor markets. A noteworthy conclusion from the study was that 40% of jobs worldwide are expected to be impacted by AI. But this number differs by nation, with the US facing a higher danger at 60% and India facing a relatively lesser risk at 30%. This is mainly because India has a sizable workforce in the agriculture industry, which is less impacted by AI.

According to Gopinath, if you look at India, that number is 30% since a significant portion of the labor force works in the agricultural sector, which is unaffected by AI, particularly not by generative AI.

AI holds the potential to increase the productivity of workers

The conversation then moved into a more sophisticated view of how AI might be used to both supplement and replace jobs for the 60% of Americans whose jobs are at stake. Gopinath emphasized the need to make a distinction between individuals who stand to gain from artificial intelligence by becoming more productive and others who may lose their jobs. This nuanced analysis highlighted the possibility of increasing inequality, especially about wealth distribution—a worry rose in the IMF's most recent research.

The question then becomes, how many of the 60% in the US will be replaced by AI and lose their jobs, and what portion of them will gain from AI and become more productive as a result? Therefore, a sizable portion of the populace is at risk of losing their employment, if not completely losing it, and thus having their value somewhat diminished by the existence of AI," she continued.

In response to the difficulties faced by policymakers, Gopinath emphasized the need to comprehend AI's transformational potential and create sensible policies. She pointed out that decision-makers, especially those in the G7, have declared artificial intelligence (AI) as their top priority for the year, realizing the need to consider its long-term effects.

Who is Gita Gopinath?

At Harvard University, Gita Gopinath holds the John Zwaanstra Professorships in Economics and International Studies. She is presently serving as the International Monetary Fund's (IMF) Chief Economist. She serves as the Fund's Economic Counselor in addition to being the Director of the Research Department of the IMF.

Also read: NITI Aayog: India’s poverty rates have significantly dropped in the last 9 years

The research areas of Professor Gopinath are macroeconomics and international finance. She is the author of multiple research articles on developing market crises, debt, monetary policy, trade and investment, exchange rates, and international financial crises.