A 'Slow-Moving Tsunami'
During its recent annual meetings, the IMF described the impact of artificial intelligence on the global labour market as a 'slow-moving tsunami'. This powerful analogy from IMF Managing Director Kristalina Georgieva highlights a gradual but profound
transformation that is set to reshape how we work and live. The fund estimates that as much as 40% of jobs worldwide could be affected by AI over time, through augmentation, downgrading, or complete elimination. While AI promises significant productivity gains, it also brings the risk of widening the economic divide between advanced and developing nations, and between workers who can adapt and those who cannot.
The Twin Challenges: AI and Ageing
For Asia, the AI revolution is colliding with a significant demographic shift. While some nations like India have a youthful population, many of the region's advanced economies, such as Japan, South Korea, and China, are facing rapidly ageing societies. The IMF projects that these countries could see their working-age populations shrink by nearly 25% by 2050. This demographic drag threatens to slow down economic growth. The IMF's analysis suggests AI could be a powerful antidote, potentially boosting growth in advanced Asian economies by 0.5 to 1 percentage point, which could more than offset the pressure from a shrinking workforce. The key challenge, however, is ensuring the benefits of AI are shared and that it augments workers rather than simply automating their jobs away.
Training as the Crucial Bridge
Faced with these twin pressures, the IMF has underscored the critical importance of workplace training and lifelong learning. As AI automates routine, repetitive tasks, demand is shifting. An initial US study cited by the IMF found that 10% of jobs already require AI-related skills. This trend will only accelerate. To avoid mass displacement and to harness AI's potential, workers will need to continually update their skills. This is especially true for older workers, who are often less likely to participate in recent training programmes, and younger workers, who may find the traditional first rungs of the career ladder disappearing. Singapore's President Tharman Shanmugaratnam noted at the IMF forum that entry-level graduate jobs are already seeing less demand due to automation. Proactive training is the bridge that allows workers to move from declining roles to growing ones.
A Call to Action for India
While much of the IMF's focus on ageing is on East Asia, the message on AI and skills is universal and particularly relevant for India. As one of the major developers of AI technology, India is at the forefront of this transformation. The nation's demographic dividend, a large and youthful workforce, is a significant asset. However, this dividend can only be realised if the workforce is equipped with the right skills for the future economy. The 'tsunami' of AI will affect India's services-driven economy profoundly. The IMF's call for investment in digital infrastructure and digital training for workers is a direct message to emerging markets like India. The imperative is clear: build a robust ecosystem for continuous learning and skill development to ensure young Indians are not just employable, but can thrive in an AI-powered world.
The Role of Government and Business
The IMF is clear that neither governments nor the private sector can afford to be passive. Policymakers are urged to reform education systems, promote lifelong learning, and expand social safety nets to support workers through transitions. For emerging economies, the priority must be laying the foundational groundwork of digital infrastructure and worker skills. Businesses, meanwhile, have a direct incentive to invest in their employees. An age-inclusive culture that encourages learning and development has been shown to improve retention among older, experienced workers. By assessing skills gaps and providing flexible, accessible training, companies can build a resilient, multi-generational workforce capable of navigating the changes ahead. Ultimately, preparing for the future of work is a shared responsibility.
