Artificial intelligence is reshaping the global economy at a pace that risks leaving millions of workers behind, with around 40 percent of jobs worldwide already affected by the technology, the International Monetary Fund (IMF) has warned.
Speaking during discussions at the World Economic Forum (WEF) in Davos this week, IMF officials said the impact of AI on labour markets is uneven but accelerating, forcing governments to rethink education, social protection and economic policy.
According to IMF estimates, about 60 percent of jobs in advanced economies are already exposed to artificial intelligence, compared with 26 percent in low-income countries. While AI is expected to boost productivity and create new opportunities in some sectors, it is also likely to disrupt or eliminate many existing roles.
“Some jobs will grow, others will disappear,” the IMF said, stressing that the transition could widen inequality both within and between countries if not carefully managed.
Advanced economies face deeper disruption
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In wealthier countries, where digital infrastructure is more developed and AI adoption is faster, exposure is particularly high. Many professional and white-collar roles including those in finance, administration, law and customer services are increasingly being augmented or replaced by AI-driven tools.
Economists say that while AI can enhance efficiency and output, it also threatens middle-skilled jobs that have traditionally underpinned stable employment in advanced economies. Workers with strong digital and analytical skills are likely to benefit, while those without access to retraining risk being displaced.
The IMF warned that without targeted policies, AI could exacerbate income inequality, concentrating gains among highly skilled workers and technology firms.
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Lower-income countries not immune
Low-income countries face a different, but no less serious, challenge. While a smaller share of jobs is currently exposed to AI, limited access to technology, education and digital infrastructure could prevent these economies from benefiting from productivity gains.
“There is a real risk that poorer countries fall further behind,” IMF officials said, noting that AI-driven growth could be unevenly distributed across regions.
Many low-income economies still rely heavily on agriculture and informal employment, sectors that are less immediately affected by AI. However, as automation spreads globally, export-oriented industries such as manufacturing and business process outsourcing could come under pressure.
Skills gap at the centre of the debate
Across income levels, the IMF identified skills development as the most urgent policy priority. Education systems, it said, must adapt quickly to prepare workers for a labour market shaped by AI, automation and data-driven technologies.
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This includes not only advanced technical skills, such as coding and data analysis, but also “complementary” human skills like problem-solving, creativity and adaptability — areas where humans continue to outperform machines.
Reskilling and upskilling programmes will be essential for workers already in the labour force, particularly those in roles at high risk of automation.
Communities and safety nets
Beyond skills, the IMF stressed the importance of preparing communities for disruption. Regions heavily dependent on a narrow range of industries could be especially vulnerable if AI-driven automation leads to job losses.
Stronger social safety nets, including unemployment insurance and targeted income support, may be needed to cushion the transition. Some economists have also renewed calls for policies such as wage insurance or portable benefits to help workers move between jobs more easily.
The debate has revived broader questions about how societies share the gains from technological progress, including the role of taxation, competition policy and regulation of big technology firms.
Global coordination needed
The IMF said international cooperation would be critical to ensure that AI becomes a force for inclusive growth rather than division. That includes sharing best practices on regulation, investing in digital infrastructure in developing countries and preventing a widening digital divide.
At the World Economic Forum, business leaders and policymakers echoed the warning, with several calling for faster action to align technology adoption with social and economic policy.
“AI is not a distant future issue it is already transforming how we work and live,” the IMF said. “The choices governments make now will determine whether it raises living standards broadly or deepens existing inequalities.”
As AI continues to spread across sectors and borders, the message from Davos was clear: the technology’s economic impact is inevitable, but its social consequences are not.
