World Economic Forum: 14 million jobs worldwide will be lost from the rise of AI in the next 5 years

The latest report released by the World Economic Forum (WEF) shows that in the next few years, due to factors such as artificial intelligence (AI) and economic growth slowdown, the global employment situation will be severely impacted.

In its Job Outlook report, the World Economic Forum predicts that nearly a quarter of global jobs will be transformed, with some being eliminated and others being created. It is worth noting that by 2027, 69 million new jobs will be created globally, and 83 million jobs will disappear during the same period, that is, a net reduction of 14 million jobs, which is equivalent to a net reduction of 2% of current global jobs.

Regarding this prospect, Saadia Zahidi, managing director of the World Economic Forum, commented that overall, the degree of change in the world employment situation is quite high.

The World Economic Forum says there are growing concerns about the negative impact of technological change on the job market, especially after the explosion of generative artificial intelligence such as ChatGPT. Research has found that technological advancement is indeed one of the biggest contributors to unemployment.

The report surveyed 803 companies in 45 different economies around the world, and about 75% of the companies surveyed said they expected to adopt artificial intelligence technology within five years. Some 50% of companies expect AI to create jobs, while 25% expect job losses.

The biggest losses are expected to be in administrative jobs, such as cashiers, conductors and accountants, mainly driven by digitization and automation, the report said.

The day before, IBM announced that it could replace 7,800 jobs with artificial intelligence and that hiring in back-office functions such as human resources would be suspended or slowed.

Companies surveyed, however, do not see technological change as a negative overall, with big data analytics, management technology, encryption and cybersecurity emerging as the biggest drivers of job growth over the next five years.

Zahidi explained that some sectors related to technology may increase employment opportunities, such as education, agriculture and health. "In a way, this is not happening because these jobs are unsafe, low-paid and low-skilled, quite the contrary, they are higher-skilled, higher-value-added jobs that have been made possible by technological progress."

Of course, AI technology is not the only factor contributing to the possible loss of jobs. Factors such as slowing economic growth, supply shortages, deglobalization and inflation can all lead to job losses.

The companies surveyed cited the development of renewable energy and the adoption of higher environmental, social and governance standards as the two major drivers of job creation, with slower economic growth expected to be the main reason for the job losses.

[The United States plans to reform the deposit insurance system]

On Monday, Eastern Time, the Federal Deposit Insurance Corporation (FDIC) released a comprehensive overview of the deposit insurance system and reform plans to address financial stability issues stemming from recent bank failures. The FDIC has outlined three options for deposit insurance reform, the first of which would be to raise the insurance cap for all bank accounts above the current $250,000 limit. But the FDIC argued that raising the deposit insurance cap would not, by itself, address the run risk associated with high concentrations of uninsured deposits. The second is comprehensive insurance on all deposits, which would effectively eliminate the risk of a run, but could have a big impact on banks' risk-taking behaviour. Banks could be more reckless without fear of a run. The third item is to increase the insurance coverage in a targeted manner, that is, to provide different deposit insurance limits for different account types, and the insurance coverage of corporate accounts will be significantly higher than that of other accounts.