Artificial intelligence (AI) is revolutionizing industries across the globe, and its impact on the workforce is a topic of great concern. While discussions often focus on the jobs at risk of being replaced by AI, there is an essential aspect that is often overlooked – the geographical context. Where you work may be just as important as what you do in determining the impact of AI on your job. Developing countries, in particular, face unique challenges and potential consequences as AI continues to advance.
The Power of AI in Job Displacement
AI algorithms excel in imitating real-world systems, particularly those that involve repetitive tasks. As a result, jobs in customer service, retail, and clerical roles are frequently identified as the most vulnerable to AI replacement. Yet, the latest advancements in AI are also starting to affect creative work and white-collar professions. The World Economic Forum’s Future of Jobs report highlights that emerging technologies and digitalization significantly contribute to job displacement. Roles like bank tellers, postal service clerks, cashiers, and data entry clerks are projected to be among the fastest declining positions.
Take the role of an office clerk, responsible for answering phones, taking messages, and scheduling appointments. Today, AI tools can seamlessly perform these tasks, working endlessly and without any personal issues. Employers find these AI solutions attractive, as they offer efficiency and cost-effectiveness. However, the impact of AI on office clerks differs depending on the geographical context.
Initially, one might assume that office clerks in developed countries are more likely to lose their jobs due to the higher probability of AI implementation. Surprisingly, it is expected that developing countries will face a greater number of job losses. This discrepancy stems from how well each nation can adapt to the displacement of its workforce. The United Nations International Telecommunication Union created the information and communication technologies (ICT) development index to evaluate a country’s performance in this area. Remarkably, developed countries tend to score higher on this index. In 2012, the top five ranking countries included the Republic of Korea, Sweden, Iceland, Denmark, and Finland. Conversely, developing countries such as Eritrea, Burkina Faso, Chad, the Central African Republic, and Niger found themselves in the bottom ranks.
Developing countries face unique challenges that hinder their ability to cope with AI-driven changes in the workforce. These countries tend to have lower incomes, making it easier to employ people due to lower wages, intense competition, and less employee regulation. The World Bank estimates that approximately 84% of the working-age population resides in developing countries. Furthermore, a report from the International Labor Organization stated that in 2008, 73% of the global workforce was located in these developing countries. As a result, should AI replace or displace clerical jobs in these regions, the competition for the remaining positions will become fierce.
This reality can lead to an employer-dominated ecosystem in developing countries. The prevalence of jobs that can be easily replaced, combined with limited resources and skills to implement AI tools effectively, will exacerbate income inequality. As noted by World Bank senior economist Indhira Santos, “the jobs where workers are likely to lose out are disproportionally held by the least educated and the bottom 40 percent of the income distribution.” Thus, while mass unemployment may not be the immediate concern, the digital revolution will undoubtedly contribute to widening income disparities.
The future of the workforce in developing countries is heavily dependent on their ability to adapt to the changes brought about by AI. Undoubtedly, AI will create new employment opportunities, some of which are yet to be imagined. However, not all countries are adequately equipped to navigate this transition effectively. Factors such as cost and affordability of AI programs and algorithms will further accelerate the process in certain regions. Developing countries must invest in education, skills training, and infrastructure to ensure they are prepared to thrive in this fast-evolving landscape.
As AI continues to transform industries and reshape the global workforce, its impact will be felt differently depending on where you work. Developing countries face unique challenges that amplify the potential consequences of AI-driven job displacement. These nations must address issues of income inequality, invest in technological infrastructure, and equip their workforce with the necessary skills to adapt to the changing job market. By prioritizing these areas, developing countries can position themselves to take advantage of the employment opportunities that AI will inevitably create. The future of work in developing countries may depend on their ability to embrace AI and effectively integrate it into their economies.
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