Amid the storm of AI induced job fears for freshers, a top executive at the International Monetary Fund (IMF) just provided global workers and specially Indians with a much needed reality check.
Speaking at the forum of the AI Impact Summit on Friday, managing director of the IMF, Kristalina Georgieva told NDTV reporters that an estimated 40 per cent of the global workforce (entry-level jobs in particular) will be heavily impacted by Artificial Intelligence related tech developments.
“Who gets squeezed? The category of jobs we worry particularly about, and there is evidence this is already happening, are entry-level roles,” she told NDTV.
This statement from the IMF’s managing director becomes slightly more fearsome when one takes into account the fact that an estimated 19.01 million Indians entered the workforce through ‘entry-level roles’ between 2023-2024 as per World Bank data.
This number is only expected to grow in the coming years, given the population pyramid of India that is characterized by a wide-base of young people.
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IMF’s Kristalina Georgieva also told NDTV that this “tsunami hitting labour markets” is expected to hit the global north more heavily than the global south.
Referring to International Monetary Fund-backed studies, she said this number could shoot up to 60 per cent in advanced economies but will likely settle at 26 per cent for India.
Georgieva’s analysis aligns with the recent UNCTAD study that evaluates the impact of AI on the different jobs. As per UNCTAD’s analysis, AI is set to first come for the more ‘cognitive’ jobs where a certain level of training and routine level thinking is required.
As per Georgieva these developments highlight the importance of government intervention to prepare populations for the AI economy.
Georgieva on Indian government’s efforts in AI
Speaking at the AI Impact Summit on Friday (the day when PM Modi hosted a CEO roundtable with big-tech leaders like Sam Altman and Sundar Pichai), Georgieva praised India’s recent ‘integration’ into the global economy.
The IMF MD’s statement about global integration referred to the recent trade agreements brokered by India with UK, EU, USA and New Zealand.
Georgieva also praised the Indian government’s labour market related and tax reforms, stating that these interventions bring further posterity to India’s macro operations.
“When I look at the Indian economy, what bodes well is that you have undertaken deep structural reforms in tax… in labour markets… to make India more competitive, more prepared for this world of AI, in which there has to be flexibility in how you deploy skills,” she remarked.
Referring to India’s recently signed trade agreements, said that “When you are integrated into the world you have a much better chance to withstand the impact of AI transformation.”
The IMF chief argued that with India’s “solid banking and corporate institutes encouraging investment” and recently signed FTAs, the country is set to witness good economic growth which could then also provide jobs.
“When you have high growth then, all other things (being) equal, you have more jobs, even if it is at a reduced rate (of) one per cent growth then you still have job creation.” she explained.
How to solve the ‘hiring’ problem for aspiring Indian techies?
The key, the IMF head said, is India is “creating opportunities” across the board. In her remarks Georgieva flagged creation of public digital infrastructure and digital ID as long term beneficial economic projects.
According to the managing director of IMF, the Indian government can better prepare their large workforce for the AI-led transformation of the labour market by reforming the education sector.
“The government needs to think about reforming education for the AI economy. That is, not so much learning specific skills but learning to learn and be more flexible in deploying these skills… be more open but also recognise that with AI the world of services is going to expand,” she told NDTV.
According to Georgieva, learning for the AI world will not just include training for mastery in specific skills but also include learning to be more flexible in deploying these skills, to guard against the risk of people being left behind.
As per Georgieva’s analysis these measures, if acted upon by the Indian government could be critical in helping to offset potential job losses, particularly the entry-level roles.