IMF Chief Sets Key Steps to Address Job Creation amid AI Transformation

In a blog post on the International Monetary Fund (IMF) website, Kristalina Georgieva, Managing Director of the IMF, outlined essential strategies for governments to focus on in light of the rapid changes in the labor market driven by artificial intelligence (AI). 

These steps are aimed at ensuring countries can create new jobs and help workers adapt to the evolving job landscape.

Georgieva emphasized that reforms promoting innovation, the creation of new companies, and improved access to finance are crucial for driving job growth. She added that governments should adopt policies to help workers gain new skills, remain engaged in the labor market, and enhance their mobility by ensuring affordable housing and flexible work arrangements.

Key Steps for Job Creation and Skills Adaptation

Governments should implement policies that allow workers to adapt by gaining new skills, ensuring their continued engagement in the labor market. Flexible job arrangements and affordable housing should also be part of the plan.

Countries need to improve social protection systems to assist those struggling with career transitions, enabling their reintegration into the workforce.

According to Georgieva, governments must redesign education systems to align with the needs of the AI-driven economy. As demand for new IT skills rises, she noted that the growing automation of tasks could result in a mismatch between labor supply and demand for specialized workers.

Georgieva highlighted that students today need cognitive, creative, and technical skills that complement AI rather than compete with it. Lifelong learning initiatives will help workers adapt to the rapid technological changes.

Policies that encourage competition and make it easier for new businesses to enter markets will help create more job opportunities, Georgieva argued.

Drawing from the IMF Skills Readiness Index, Georgieva pointed out that Finland, Ireland, and Denmark are leading the way in equipping their workforces with the necessary skills and adaptability for the future. These countries have invested heavily in higher education and lifelong learning programs, which have helped their workers stay competitive amid technological change.

Georgieva stressed that while AI and automation are reshaping labor markets, they are also creating new roles and opportunities. New skills and entirely new jobs are emerging alongside automation, offering alternative pathways to prosperity. She noted that adapting to these changes will require workers to develop or acquire new skills continually.

She also cited IMF's recent analysis, which shows that millions of online job vacancies now require new skills. For example, one in ten advertised jobs in advanced economies and one in twenty in emerging markets now require at least one new skill.

With AI expected to affect nearly 40% of global jobs, Georgieva acknowledged the growing fears of job loss and reduced opportunities, especially for vulnerable groups. To mitigate this, she stressed the need for proactive, inclusive policies that prepare the workforce for the future and ensure the benefits of AI are widely distributed.