Artificial Intelligence is rapidly transforming the global economy, and according to International Monetary Fund (IMF) Managing Director Kristalina Georgieva, its impact on the labour market could be as powerful as a tsunami.
In an interview with India Today, Georgieva warned that AI is no longer a futuristic concept — it is already reshaping industries, workplaces, and daily life at an unprecedented speed. She urged governments worldwide to act quickly to harness its benefits while protecting workers from potential disruption.
AI Advancing Faster Than Any Past Technology
Georgieva stressed that the pace of AI development is unlike anything seen before. While past technological revolutions took decades to reshape economies, AI is advancing in just a few years.
“AI is already here,” she noted, emphasizing that countries failing to adopt and adapt to this technological shift risk being left behind. The IMF views AI as both a powerful engine for productivity growth and a source of significant economic risk.
On one hand, AI can boost efficiency, innovation, and income levels. On the other, it can displace workers and widen inequality if not managed carefully.
40% of Jobs Worldwide at Risk of Disruption
According to IMF estimates, about 40% of jobs globally could be affected by AI in the coming years. In advanced economies, that number may rise to nearly 60%.
However, “affected” does not necessarily mean eliminated. Many roles will evolve rather than disappear. AI may enhance productivity in some sectors, leading to higher wages and new job opportunities. But in other areas, entire job categories could shrink or vanish.
In the United States, for example, one in ten jobs now requires AI-related skills. These positions generally offer higher pay, which can stimulate consumer spending and indirectly create demand for service-sector roles in hospitality, restaurants, and entertainment.
Interestingly, while total employment in certain regions has increased, many of the newly created jobs are lower-paying. This shift is contributing to a more polarized labour market.
Middle-Level Jobs Facing the Greatest Pressure
Georgieva highlighted a growing divide in the workforce. High-skilled professionals with AI expertise are benefiting from rising wages and better opportunities. Low-skilled workers continue to find employment, though often in lower-paid roles.
The biggest strain, she explained, is being felt in middle-income occupations. These jobs, which are neither highly specialised nor purely service-based, are increasingly vulnerable to automation.
Entry-level positions are also shrinking, making it harder for recent graduates to secure stable employment. This trend is fueling anxiety among young job seekers and raising concerns about long-term career prospects.
Governments Must Act Now
Despite the challenges, Georgieva made it clear that governments are not powerless. She outlined two critical areas for policy action:
1. Reforming Education and Skills Training
Education systems must evolve to prepare workers for an AI-driven economy. Continuous learning, reskilling, and adaptability will become essential. Workers must develop the ability to “learn how to learn” as job roles change more frequently.
2. Strengthening Social Safety Nets
Governments should enhance social protection systems to support workers who lose jobs due to technological shifts. Temporary income support, retraining programs, and employment services can help ease transitions.
Georgieva pointed to Denmark’s labour model as a strong example. The system offers flexibility for employers while ensuring robust protection for workers. She also welcomed recent labour reforms in India, emphasizing that flexibility must be balanced with worker security.
Balancing Innovation with Inclusion
For the IMF, ensuring that AI-driven growth benefits society broadly is now a major priority. Georgieva’s message was both cautionary and optimistic.
AI holds immense potential to increase productivity, expand economic output, and raise incomes. However, without proactive policy measures, it could deepen inequality and destabilize labour markets.
The key challenge for governments worldwide is to move early, remain flexible, and ensure that the gains from AI are shared widely rather than concentrated among a small segment of society.
As AI continues its rapid advance, the question is no longer whether it will transform the job market — but how prepared countries are to manage the change.
