Over the last few years, AI rapid development has provoked a broad debate in terms of its impact on our daily lives. One of the most discussed topics concerns the way this new technology could impact labor market making some jobs kind of obsolete while increasing productivity and demand for some others. According to many researchers and experts, AI impact is still limited but it destined to increase soon.
According to the International Monetary Fund, AI will impact 40% of workers
According to a deep analysis from the International Monetary Fund about the potential impact of AI technology at global level, both in terms of how it threatens to eliminate many jobs and how it might be integrated into workforce, its impact will be extensive and multifaceted. According to the study, AI will affect almost 40% of jobs worldwide, with some of them being replaced and others being integrated, while in the most developing countries it could even impact up to 60% of workers. Almost half of jobs could benefit from AI technology in terms of productivity, while the other half will be negatively impacted, most of the activities being performed by humans decreasing jobs demand with lower salaries and reducing hiring.
In the worst-case scenario, some jobs might disappear. In the advanced economies and in low-income countries, AI exposure would be between 40% and 26% respectively. Most of these countries lack the necessary infrastructure and qualified workforce to fully leverage the advantages of AI tools thus exacerbating countries inequalities. According to the International Monetary Fund, the world is “on the verge of a technological revolution which might boost productivity, encourage global economic growth and increase salaries worldwide.” Without a proper management, this phenomenon might also “reduce available jobs and increase inequalities.” According to IMF Director General, Kristalina Georgieva, “the overall impact of this technology “is hard to predict because AI will soon spread through economies in a complex way. What I can tell you is that we should implement specific and proper policies to be able to safely use it.”
Banca d’Italia: two thirds of Italian workers are exposed to AI
According to a recent analysis conducted by Banca d’Italia, AI development could significantly impact the Italian job market even though the real consequences are still hard to predict: “on the one hand, new technologies are still being tested and their use from Italian companies is very limited; on the other hand, the consequences and impact of their implementation will be highly influenced by economic agents and by the Italian regulatory frameworks.” It is widely believed that the jobs most at risk of being replaced by AI are those involving cognitive skills, while those safest from AI automation are manual labors. Furthermore, according to the National Institute of Statistics (Istat) data, almost two third of Italian workers are exposed to AI technology.
For 40% of workers, there would be a complementary relationship with the use of AI, with potential benefits in terms of productivity and labor demand; quite the opposite for a quarter of them who risk to be replaced by new tools. It is worth noting a significant heterogeneity at sectorial level: four-fifth of workers are exposed to AI impact while almost everyone working in farming field, as well as the half of people working in factories, will be less exposed to it. In the tertiary sector, communication and financial services risk of being replaced, while for education and healthcare ones complementarity prevails. People holding high school degree are most likely to be replaced by AI while graduated people, either with bachelor’s or master’s degrees, are more focused on complementary jobs. There are no significant gaps concerning age. In the lower to middle-income brackets, occupations are less exposed to change, while in the higher income brackets both occupations at higher risk of substitution and those complementary to AI are present; thus, the effects on inequality are uncertain.
Education as the key factor of being exposed to AI technology
Analyzing the jobs that AI technology is capable of performing, a recent study published on LaVoce.info highlights how it is possible to identify which professions might be more impacted than others based on AI introduction into effects of production processes. Based on last year’s figures from the National Institute of Statistics (Istat), it appears that in different sectors, from housework to the army, more than 7 people out of 10 (corresponding to 15 million workers out of 21.5 millions) perform jobs which are mostly exposed to AI technology. AI impact will affect nearly 7 million people, equal to one third of the entire workforce. Generally, workers with higher levels of education are found to be more exposed to technological change. In 95% cases, people having higher levels of education are middle and high exposed to AI consequences (specifically 62% are high exposed). Particularly significant is the amount of high exposed workers in the following sectors: public administration, information and communications, financial services, insurance, education, healthcare, and other sectors exceeding 90% cases. This is part true for women, working in these sectors (37%) than for men (17% only). There are no significant differences and gaps concerning age group. Based on required skills and expertise for each profession, managers fall under high skilled workers while others, including professionals and specialized technicians, fall under low skilled workers.
More than 8 million high skilled workers are high exposed (98% including middle ones). Among low skilled workers (13.6 million) the highest percentage is represented by low exposed workers (43.1%). Nonetheless, these jobs are not immune to the impact of AI tools: more than one-third of these individuals are middle exposed and almost one-fifth fall into the high exposed category.
AI impact on Italian job market
According to another study, central and northern regions are more exposed to the new technology than the Southern ones. Indices concerning Lazio and Lombardy are particularly high. On the one hand, in these regions the insurance, financial, administrative, information and communications services play a vital role. On the other, there are more high exposed workers than in other areas. The timing to estimate AI consequences will mainly depend on how fast economic agents will resort to these new technologies. In Italy, having many small enterprises, self-employed workers and small inclination to innovation, AI implementation might take longer than in other countries.
The impact of Artificial Intelligence on productivity and employment
Many studies on AI effects agree that it would be more accurate to refer to “changes” than talking about warning assumptions about the number of available jobs which new technologies will increase or replace. With this respect, a study from Pennsylvania University foresees that almost 80% of workforce (those with higher salaries) might be involved in this transition, specifically in terms of performance. Furthermore, the same study highlights how “most jobs and economic activities will experience a partial transition towards automation. The jobs are more likely to be changed and integrated using AI rather than being eliminated.” Therefore, it is likely that this technology won’t disrupt labour market, but it will rather change the way of performing tasks and activities, the working environment and worker’s autonomy.” AI impact will mostly depend on the ability to implement policies for a smooth, fair, and transparent transition especially by properly training workers. Should these conditions be applicable it is worth remembering that developing countries, like ours, can benefit from AI: according to a 2023 study conducted by the European House Ambrosetti in partnership with Microsoft, AI can significantly increase total productivity across the Italian economy up to 18% thus facing the adverse consequences of people’s ageing. The same study also reports that 1 company out of 2 is already testing some AI tools and that 70% of them assert to have achieved lots of benefits in terms of productivity, specifically for gathering information, providing virtual assistance, and enhancing procedures.
One of the main factors which could hinder this transition is the lack of specific skills and lack of transparency about data privacy. It is now clear how a greater and deeper knowledge of AI tools will be needed in the years to come. With this respect, 2023 LinkedIn Future of world Report: AI at work highlights that from November 2022 to June 2023 job’s postings on the platform requiring GPT or Chat GPT knowledge have significantly increased. However, this rise has not been accompanied by a demand for specific educational qualifications in the field, indicating a discrepancy between the digital skills possessed and the academic degrees held.
Final thoughts
Even though we are all aware about AI’s impact on labor market, we still don’t know in which way it will happen. According to the most part of studies, the real key factor determining the impact of the artificial intelligence will be the establishment of a regulatory framework capable of managing the implications of the new technology. Without a reference regulatory framework, it is not completely inappropriate thinking of AI negative consequences on jobs’ demand. At the same time, a set of specific skills should be put into place to allow people to use this technology properly. The balance between regulations and skills will better define the role and impact of AI both on the Italian and global labor markets.
