Published on 12th July 2023
OECD countries may be on the brink of an AI revolution. While firms’ adoption of AI is still relatively low, rapid progress with generative AI (e.g. ChatGPT), falling costs, and the increasing availability of workers with AI skills mark a technological watershed for labour markets.
Dominating the headlines since the beginning of the year, the impact of Artificial Intelligence on the world of work naturally features as the main topic of the OECD Employment Outlook 2023.
When considering all automation technologies including AI, 27% of jobs are in occupations at high-risk of automation. Initial findings from a new OECD survey of AI’s impact in the manufacturing and finance sectors of seven countries highlight both opportunities and risks from AI. On the positive side, AI can help reduce tedious and dangerous tasks, leading to greater satisfaction and safety. The OECD also identifies positive impact in terms of fairness in management as well as inclusion of disabled workers. Yet, 63% of workers in finance and 57% in manufacturing worry about job losses due to AI in the next ten years.
“No one should be left behind by the digitalisation of labour markets. We fully support the OECD’s call for concrete policy actions to ensure the enforcement of key principles for trustworthy use of AI,” reacts Denis Pennel, Managing Director of the World Employment Confederation. “As we have seen this technology gaining importance in the HR services industry over the past years, we have taken early action and developed our own set of principles for ethical use of AI in recruitment and employment processes. At the core lies the need to keep a human-centric approach to artificial intelligence.”
Despite the uncertainty about the short- to medium-term evolution of AI, the OECD recommends concrete policy actions to reap the benefits AI can bring to the workplace while addressing risks to workers’ fundamental rights and well-being. Certain jurisdictions like the European Union have already started regulating AI (e.g. EU Artificial Intelligence Act and data protection regulation).
AI deployment will also require training and skills enhancement of workers. The OECD advises governments to encourage employers to provide more training, integrate AI skills into education, and support diversity in the AI workforce. With the acceleration of skills and jobs evolution, the World Employment Confederation would also recommend providing career support to workers. As career paths become even more a moving target, individuals will need more orientation to own their future and make best use of the opportunities offered by technological developments.
The OECD also points to collective bargaining and social dialogue as important tools to support workers and companies in the AI transition but warns that AI might also put pressure on labour relations. The HR services sector has a proven track record in securing additional workers’ rights through social dialogue at both national and European level and how to address the impacts of the digital transition is high on our common agenda.
The OECD Employment Outlook is the annual snapshot of labour markets across the world’s largest economies. In addition to its detailed analysis of AI’s impact, it examines the evolution of labour demand and widespread shortages, as well as wage developments in the context of high inflation. According to the OECD analysis, labour markets remain tight despite some easing. Employment levels showed resilience and unemployment rates have reached their lowest levels in decades. The robust recovery after the Covid-19 pandemic lost momentum due to the cost-of-living crisis and the economic uncertainties linked to the Russian war against Ukraine. Real wages are falling in almost all OECD countries and in many countries, profits have increased more than labour costs.
For a deeper dive into the impact of AI, check out this other OECD report “Not Lost in Translation” powered by Lightcast, WEC’s partner for labour markets data. Lightcast also contributed to the 2023 Stanford AI Index report, tracking the performance of new AI technology as well as its influence in politics, ethical discussion, and the economy.