Kristalina Georgieva
The rapid advancement of artificial intelligence (AI) and digital technologies is reshaping the global labour market, creating both opportunities and challenges for workers worldwide. While technological change has historically altered job markets, the current transformation is occurring at an unprecedented pace and scale, affecting even those at the forefront of innovation.
Recent job cuts at major technology companies illustrate that no sector is immune to disruption.
At the same time, new roles and occupations are emerging as automation changes the nature of work.
According to a recent analysis of millions of online job postings, one in ten positions in advanced economies and one in twenty in emerging markets now require at least one new skill.
Professional, technical, and managerial roles are seeing the highest demand, with IT accounting for more than half of this growth.
Sector-specific skills are also gaining prominence: healthcare is experiencing a rise in telecare and digital health expertise, while marketing increasingly seeks social media proficiency.
The evolving labour landscape is raising concerns about job security.
Nearly 40% of global jobs are exposed to AI-driven changes, heightening fears of displacement and declining opportunities, particularly for vulnerable groups.
This underscores the importance of proactive policymaking to prepare workers for the future and ensure the benefits of AI are widely shared.
Employers are responding to emerging skills with higher compensation. In the United Kingdom and the United States, job postings that list a new skill tend to pay about 3% more, with openings requiring four or more new skills offering up to 15% higher wages in the UK and 8.5% more in the US.
Higher wages can stimulate local economies as workers spend more, prompting businesses to hire additional staff.
In the United States, regions with greater adoption of new skills saw employment rise by 1.3% for each one percentage point increase in job postings requiring new skills over the past decade.
However, the distribution of benefits is uneven. High- and low-skill workers tend to gain the most, while middle-skill jobs, such as routine office work, are being squeezed.
AI-related skills, despite commanding wage premiums, have not yet significantly contributed to employment growth.
In fact, regions with high demand for AI skills have seen employment in vulnerable occupations drop by 3.6% over five years.
This trend poses challenges for young workers, as entry-level roles face higher exposure to automation.
Evidence from the United States suggests generative AI adoption is reducing entry-level hiring, particularly in automatable tasks.
Policymakers have the ability to turn disruption into opportunity. The International Monetary Fund’s Skill Imbalance Index highlights countries with high demand but low supply of new skills, such as Brazil, Mexico and Sweden, which may need to invest in STEM education, training, and attracting foreign talent.
Conversely, countries with abundant talent but modest demand, including Australia, Ireland, and Poland, should focus on stimulating innovation and helping firms utilise available skills.
Emerging and low-income economies require strategies that address both demand and supply.
Additional measures recommended include supporting worker mobility through affordable housing and flexible work arrangements, fostering competition to prevent market concentration, and strengthening social protection to aid job transitions.
Education systems also need reform to equip students and workers with cognitive, creative, and technical skills that complement AI, rather than compete with it.
Countries like Finland, Ireland, and Denmark are already leading in skill readiness, combining strong investment in tertiary education with lifelong learning programs that help workers adapt as technology evolves.
The future impact of AI on economies will depend on how well governments and businesses prepare workers for these transitions.
Beyond economics, work provides dignity and purpose, making the transformation brought by AI highly consequential.
Success will require bold action: investing in skills, supporting workers through transitions, and maintaining competitive markets so that innovation benefits all.
*Kristalina Georgieva is the managing director of the International Monetary Fund.
