OECD says rich economies on cusp of AI ‘revolution’

The OECD has said mass adoption of generative artificial intelligence (AI) in the workplace will trigger a wave of job losses and ethical issues, as it warned the world’s richest economies to prepare for upheaval in their labour markets.

The rapid development in generative AI, which is able to perform complex written work at an increasingly low cost, combined with the ease of adopting these new technologies “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 OECD is the latest economic outfit to warn of the disruptive impact of technologies such as ChatGPT, saying in its employment report that potential benefits, such as higher job satisfaction and productivity gains, had to be weighed against negative effects – particularly for traditionally highly-skilled occupations.

Stefano Scarpetta, director for employment, labour and social affairs at the OECD, said despite the limited impact of generative AI on the labour market so far, it is “clear that the potential for substitution remains significant, raising fears of decreasing wages and job losses.”

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Occupations at the highest risk in fields such as finance, medicine and law are highly-skilled, white-collar jobs, which account for about 27 per cent of employment across OECD member economies, which are among the richest in the world. The share is even higher in members such as Italy, Germany and France and lower in the UK and the US.

Other economists have noted that the technology is likely to spur growth. Goldman Sachs said earlier this year that the productivity gains linked to the adoption of generative AI could raise global output by 7 per cent over 10 years. However, the investment bank also warned that the technology could disrupt 300 million jobs.

The OECD report highlighted that AI creates new jobs and boosts wages, and that many workers said that these technologies had improved their enjoyment at work by automating dangerous or tedious tasks.

However, Mr Scarpetta also warned that the use of AI also “comes with serious ethical challenges around data protection and privacy, transparency and explainability, bias and discrimination, automatic decision making and accountability.

Many real-world examples exist of AI hiring tools that have baked in human biases against women, people with disabilities, and ethnic or racial minorities. Algorithmic management can also increase work intensity and stress because of constant and pervasive monitoring and data-driven performance evaluations.

The OECD said there was “an urgent need to act,” to make sure the benefits of AI won’t outweigh the risks, urging members to co-ordinate their responses to avoid “a race to the bottom”.

In the EU, companies, including Germany’s Siemens and France’s Airbus, have protested against proposals from Brussels that many view as the toughest AI rules in the world. They argue that attempts to rein in AI too tightly risk harming competitiveness. – The Financial Times Limited 2023