AI Can Lift Global GDP by 0.8 Pc, But Replace Jobs in the Middle Rungs: IMF

Chennai: The International Monetary Fund estimates that Artificial Intelligence has the potential to lift global annual GDP growth by up to 0.8 percentage points. But AI may replace many jobs in the middle rungs.

AI will bring opportunity and challenge, and it is for us to maximize the benefits, said IMF Managing Director Kristalina Georgieva at the India AI Impact Summit.

“We at the IMF estimate it has the potential to lift global annual GDP growth by up to 0.8 percentage points. This is a vast upside potential,” she said.

“On a human level, we can expect countless small wins. For the woman in Nagaland far from the nearest oncologist, one photo of the tumour on her leg and her smartphone will give her a diagnosis. For the farmer in arid Kutch, AI will advise which crop to plant and when. It fires up the imagination,” she added.

However, AI will massively transform the world of work. People with the right talents will be in hot demand for jobs that will be enhanced by AI. These people will earn more. They will spend more on restaurants, or on travel. With that, more low-skilled jobs, especially in services, will be added. For every one person hired into AI, the IMF estimates that the net addition to jobs will be 1.3.

But there will also be dislocation linked to the sheer pace of change. AI will not enhance but rather replace many jobs in the middle.

“I worry about a hollowing out of the middle, for young call-centre workers that may be replaced by bots, for IT graduates potentially replaced by algorithms. We must prepare, and the best preparation is to be open-eyed about the risks of AI and invest in people,” she said.

“Where others pursue large language models with maximum complexity, you prioritize practicality, accessibility, and reach. Where others impose large user fees, you favour an open-source approach. This is the spirit that sets India apart,” she added.

Given the huge challenges of global AI diffusion, I find it especially admirable that India knows the good it can do for others, with its digital interfaces and human ingenuity, it is on the forefront of making things happen, offering a unique focus on democratizing AI. And India has extensive experience in creating practical solutions for rural and urban communities, which can benefit low-income and developing countries across the world.

India should go forth and help share the benefits of practical Indian AI, she added.