OECD says wealthiest economies on brink of AI revolution

Technological advances forecast to bring ethical challenges to job markets

Use of artificial intelligence could 'fundamentally change the workplace', the OECD said. Reuters
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An “AI revolution” that will bring massive changes to jobs, create new ones and make others untenable, is set to be unleashed on the world’s wealthiest economies, the Organisation for Economic Co-operation and Development (OECD) has said.

The speed at which artificial intelligence is producing tools that can take the place of people has given rise to concerns that whole sectors of the workforce could be on the cusp of becoming redundant through automation.

AI tolls can generate essays, create images and even pass medical exams.

The changes will bring a host of ethical issues, the OECD predicted, as it said nations should urgently take steps to prepare for upheaval in labour markets.

The warning, laid out in the OECD’s 2023 Employment Outlook, comes after an adviser to the UK Prime Minister said AI systems were on track to become powerful enough to kill people within two years and urged policymakers to bring them under control.

The UK will host the first global AI summit in autumn. Rishi Sunak and US President Joe Biden discussed preparations for the gathering during Downing Street talks on Monday.

Major changes to workforces will be the result of generative AI, which is able to perform complex written work at an increasingly low cost, the OECD said. This, coupled with how easy it is for sectors to adopt technological advancements, “suggest that OECD economies may be on the cusp of an AI revolution which could fundamentally change the workplace”, the Paris-based organisation said on Tuesday.

The 267-page document noted there was little evidence of significant negative effects on employment from AI "so far".

"While the adoption of AI still remains relatively low, rapid progress, falling costs and the increasing availability of workers with AI skills indicate that OECD economies might be on the brink of an AI revolution," the report said.

"While there are many potential benefits from AI, there are also significant risks that need to be urgently addressed."

The international group has 38 members including Britain, Australia, Canada, Germany, Japan, Mexico and the US.

The employment rate across the group of nations is expected to rise slightly to 5.2 per cent by the fourth quarter of next year. Larger rises of about 0.75 percentage points or more are expected in the UK, US, Australia and New Zealand.

The release of the OECD’s report on Tuesday came as the International Monetary Fund (IMF) said Britain’s post-pandemic recovery was hampered by rising energy prices caused by the war in Ukraine, and noted long-term illness has caused workforce participation to decline.

It said post-Brexit uncertainty had fallen due to this year's Windsor Framework, the purpose of which was to prevent a hard border on the island of Ireland, by requiring Northern Ireland to align with EU law in certain areas.

The IMF reported a “subdued” outlook for growth.

“Staff forecast growth to slow to 0.4 per cent in 2023, held back by tighter monetary and fiscal policies needed to curb inflation, and lingering impacts of the terms-of-trade shock,” the IMF said.

“Growth is projected to rise gradually to 1 per cent in 2024, as disinflation softens the hit to real incomes, and to average around 2 per cent in 2025 and 2026, mainly on the back of a projected easing in monetary and financial conditions. Thereafter, growth is projected to settle at the trend growth of 1.5 per cent.”

Inflation in the UK stands at 8.7 per cent.

The OECD said it was "vital" to gather better data on AI use in the workplace, "including which jobs will change, be created or disappear and how skills needs are shifting".

The report said the use of AI could help bosses improve workplace safety by reducing “tedious or dangerous tasks” and could lead to higher wages for workers whose skills complement the technology.

However, the OECD warned it could also "leave workers with a higher-paced work environment" and reduce salaries of employees "who find themselves squeezed into a diminished share of tasks due to automation".

Stefano Scarpetta, OECD director for employment, labour and social affairs, said AI brings with it “serious ethical challenges around data protection and privacy, transparency and explainability, bias and discrimination, automatic decision-making and accountability.”

He said AI use was generally concentrated in large companies that are trying out new inventions. Many firms appear reluctant to replace staff with technology.

"However, it is also clear that the potential for substitution remains significant, raising fears of decreasing wages and job losses," Mr Scarpetta wrote in an editorial.

Last year, The National witnessed as AiDa, the world’s first AI-powered humanoid artist, became the first robot to give evidence to the House of Lords, the upper chamber of the UK Parliament.

Updated: July 11, 2023, 2:13 PM