Article written by Sanem Bilgin, Impact Boards EM
November 2024
The impact of artificial intelligence (AI) on the labour markets and across major industries
Every 10 years or so we see a major shift in technology such as the beginning of the internet, the introduction of mobile phones or the start of cloud. AI is bigger than all of them. It will hugely impact how businesses operate and the overall economic landscape. AI’s impact will vary significantly according to industry. Overall, it will improve productivity and depending on whether it augments or replaces human capital, there will be major shifts in the labour market.
In a new analysis, IMF staff examine the potential impact of AI on the global labour market. The findings are striking; almost 40% of global employment is exposed to AI. Historically, automation and information technology have tended to affect routine tasks, but what sets AI apart is its ability to impact high-skilled jobs. As a result, advanced economies face greater risks from AI – but also more opportunities to leverage its benefits – compared with emerging market and developing economies.
In advanced economies, about 60% of jobs may be impacted by AI. Roughly half the exposed jobs may benefit from AI integration, enhancing productivity. For the other half, AI applications will take over key tasks currently performed by humans, which will lead to lower wages and significant layoffs. In the most extreme cases, some jobs may disappear altogether. AI could replace the equivalent of 300 million full-time jobs, a report by investment bank Goldman Sachs says.
In emerging markets and low-income countries, by contrast, AI exposure is expected to be 40% and 26%, respectively. Emerging markets and developing economies face fewer immediate disruptions, as they don’t have the infrastructure or skilled workforces to harness the benefits of AI. Consequently, AI could worsen inequality among nations over time.
AI’s impact on major industries
The impact of AI on different industries, varies significantly according to how it is utilised. AI can be used to improve productivity by accelerating automation. AI can also help identify market opportunities, make faster decisions, and optimise brand awareness-which will lead to much more effective corporate strategies.
Impact of AI on key industries
Let’s see the impact of AI on various industries:
Retail
The retail industry can use AI for inventory monitoring, leading to better working capital management, and higher profitability. Customer support chatbots and facial recognition of in-store clients can improve customer shopping experiences. AI-based virtual trial rooms can help customers make quicker purchase decisions. AI apps that support asset monitoring and offer retail security solutions, can help retailers improve overall security. Improved manufacturing productivity can lead to lower costs and higher margins. In conclusion, AI offers huge benefits to retailers.
Banking and finance apps development
Banking, Finance, and Fintech industries, are significantly investing in AI-powered mobile application development. AI can enable virtual customer assistance. It can help identify fraud and prevent illegal access to accounts and networks. Process automation can lead to streamlined workflows. AI can be used to improve cybersecurity. The adoption of AI helps banks to understand their customers’ search patterns and offer personalised banking services.
Impact of AI on the healthcare industry
Healthcare is another industry which will benefit significantly from AI. AI and Machine Learning (ML) enabled applications are widely applied in the analysis of medical images to improve diagnosis. Healthcare Industry has laid the foundation for the development of eHealth, mHealth, RPA-assistants, and telemedicine-like interactive and collaborative solutions. Remote patient data monitoring and analysis of health reports, will become easier. Front-desk operations and production can be more automated. AI can facilitate drug research, development and clinical trials data processing services. It will help physicians deliver accurate diagnoses and instant delivery of care services through telemedicine.
The impact of AI on various industries can also be analysed, according to key business functions such as digital marketing, manufacturing and e-commerce operations.
AI in digital marketing
AI’s intelligent, efficient and pre-emptive features will help digital marketers streamline their marketing activities and digitise brand promotional activities. For instance, AI technology-based solutions like ChatGPT are improving digital marketing through better content creation, email script preparation and grammar verification.
Marketers can better monitor customer behaviour and personal preferences through AI applications. Improved market trend analysis will help reach specific audiences tactically. Customer engagement will improve. AI’s predictive analysis feature can forecast future demand for a product, and hence make more accurate sales predictions.
AI-powered chatbots ensure quick responses to customers and improve brand loyalty. CRM management and emails to prospects can be sent automatically. Content creation and modification will become easier.
AI in manufacturing operations
The adoption of AI technology in the manufacturing industry will lead to incredible automation benefits to organisations. From production and warehouse management to supply-chain management and sales tracking, AI manufacturing apps are gaining momentum. Better quality analysis will help optimise production. Fleet monitoring, logistics tracking, warehouse management and inventory tracking will lead to improved working capital management and hence higher margins.
AI in boosting marketplace or e-commerce operations
The e-commerce or marketplace industry is one of the sectors that is reaping the full potential of AI technology. Modern AI technology, along with ML and deep learning capabilities, will assist the e-commerce industry to better analyse their customer’s search behaviour and offer the most personalised product recommendations. This will lead to better purchasing experiences and increase conversions.
Intelligent AI applications will facilitate recognising fake payments, fake reviews and feedback given by fraud. It will help vendors or service providers to monitor every action of users and analyse the correctness of the information. Furthermore, AI-powered e-commerce applications will help companies instantly respond to user queries through intelligent chatbots or virtual assistants.
In conclusion, AI will have a huge impact on all industries, to varying degrees. It is impossible to have accurate predictions at this point, as the AI industry is evolving at head spinning speed. One thing is certain: The companies with strong leadership, high agility, timely strategic investments, and fast AI adoption, will be the winners.