AI era is upon us, but world needs to ensure it brings prosperity for all

Global economy is facing numerous challenges due to seemingly endless geopolitical and economic uncertainties.
But global policy and opinion makers and business leaders among others have left the World Economic Forum (WEF) at Davos in Switzerland last week with cautious optimism about 2024.
While challenges and surprises remain inevitable, opportunities abound. This was a common theme at Davos, where delegates from around the world convened to focus on the fundamental principles driving trust.
For instance, while artificial intelligence (AI) will transform global economy, experts say it will affect almost 40% of jobs around the world, replacing some and complementing others.
“We need a careful balance of policies to tap its potential,” points out the International Monetary Fund (IMF).
Undoubtedly, the world is on the brink of a technological revolution that could jumpstart productivity, boost global growth and raise incomes around the world. Yet, it could also replace jobs and deepen inequality.
Obviously, the rapid advance of artificial intelligence has captivated the world, causing both excitement and alarm, and raising important questions about its potential impact on the global economy.
“The net effect is difficult to foresee, as AI will ripple through economies in complex ways. What we can say with some confidence is that we will need to come up with a set of policies to safely leverage the vast potential of AI for the benefit of humanity,” IMF says.
An IMF analysis found that almost 40% of global employment is exposed to AI. Historically, automation and information technology have tended to affect routine tasks, but one of the things that sets AI apart is its ability to impact high-skilled jobs.
As a result, advanced economies face greater risks from AI — but also more opportunities to leverage its benefits — compared with emerging market and developing economies.
In advanced economies, about 60% of jobs may be impacted by AI. Roughly half the exposed jobs may benefit from AI integration, enhancing productivity.
For the other half, AI applications may execute key tasks currently performed by humans, which could lower labour demand, leading to lower wages and reduced hiring. In the most extreme cases, some of these jobs may disappear.
In emerging markets and low-income countries, by contrast, AI exposure is expected to be 40% and 26% respectively. These findings suggest emerging market and developing economies face fewer immediate disruptions from AI.
At the same time, many of these countries don’t have the infrastructure or skilled workforce to harness the benefits of AI, raising the risk that over time the technology could worsen inequality among nations.
That said, generative AI is poised to transform roles and boost performance across functions — and could add the equivalent of $2.6tn to $4.4tn of economic value annually.
Gen AI is poised to transform roles and boost performance across functions such as sales and marketing, customer operations, and software development. In the process, it could unlock trillions of dollars in value across sectors from banking to life sciences.
Certainly, the AI era is upon us, and it is still within our power to ensure it brings prosperity for all.