AIDA

“Job Killer Artificial Intelligence (AI)?: With the International Monetary Fund (IMF) estimating that up to 60 % of all jobs in industrial countries will be impacted by rising AI technology, the fourth industrial revolution is disrupting the European job market. However, while AI poses dangers to some jobs, it certainly has benefits for others. How…

Committee on Artificial Intelligence in a Digital Age

By Marieke de Weerd (NL)

“Job Killer Artificial Intelligence (AI)?: With the International Monetary Fund (IMF) estimating that up to 60 % of all jobs in industrial countries will be impacted by rising AI technology, the fourth industrial revolution is disrupting the European job market. However, while AI poses dangers to some jobs, it certainly has benefits for others. How can the EU facilitate a smooth transition into the era of AI for workers?”

Executive Summary 

Artificial intelligence (AI) is a game-changer, shaping the global economy and job market, bringing with it both exciting possibilities and tough challenges. The EU stands at the forefront of this transformative era, poised to use AI’s potential for societal advancement. While AI promises significant economic gains, estimated at 7% of global GDP over a decade, it also presents substantial implications for employment, with up to 300 million jobs at risk of displacement worldwide. The EU’s response to this ambivalent impact regards a multifaceted approach, highlighting ethical AI development, regulatory frameworks, investment in innovation and education, and international cooperation. Navigating the digital age, the EU faces the crucial task of balancing technological progress with social fairness. The challenge lies in maximising AI’s transformative power to push inclusive growth and mitigate disparities, ensuring a future where prosperity is shared by all.

Introduction and Relevance of the Topic 

AI stands at the forefront of the fourth industrial revolution1, poised to reshape the global economy and transform the job market. It offers numerous benefits, including better healthcare, safer transport, more efficient manufacturing, and sustainable energy use. We could, for example, expect a raise in global GDP of 7% (approximately 6.5 trillion euros) over a 10-year period from generative AI alone. Furthermore, considering the fact that EU Member States are strong in the digital industry, the EU could secure a global leadership position in the data economy and its applications. 

However, there is also another side to AI applications. Globally, employment exposure to AI is estimated around an average of 40 percent, with a particularly significant impact in advanced economies2. Here, the structure of employment is expected to undergo major and rapid transformations, leading to an estimate of 60 percent of jobs affected by AI.

Nevertheless, not everyone will be equally affected. Those with a college-education and women are expected to experience the heaviest exposure to AI influence on the job market. Simultaneously they are estimated to derive the benefits of AI technologies, leveraging their skills and adaptability to navigate the evolving job landscape. On the other hand, older workers will struggle to adapt to this rapidly changing landscape, potentially worsening labour income inequality.

With AI on the rise, the EU has the opportunity to become a global leader in the data economy and in utilising AI. It would be detrimental not to take it, as the EU might lose significant competitive advantages3 towards other global actors. Simultaneously, as AI affects various jobs differently, it might worsen labour income equality. Thus, as both underuse and overuse of AI is threatening, the EU needs to enable just the right amount of AI-use.

Figure 1: AI, “Work of the Future” Challenge, source: WorkingNation

Fundamental Challenges 

AI would offer many benefits and economic opportunities, but there are still some challenges at hand that need to be tackled. Even though AI is estimated to create an 11-37 percent increase in labour productivity by 2035, its use will have detrimental impacts on employment. AI has the potential to replace the equivalent of 300 million full-time jobs globally, with 40 percent of global employees being affected by AI. Most affected will be the high-income countries, including EU Member States, of which the IMF estimated that 60 percent of jobs are influenced by AI. However, about half of these jobs would be negatively affected, whereas the other half could benefit from AI implementation. In low-income countries, on the other hand, 26 percent of jobs will be exposed to AI. Even though this proportion is significantly less than in high-income countries, emerging markets4 are similarly less fit to enjoy AI’s benefits, potentially resulting in the worsening of the digital divide5 and income disparities between countries.

On a smaller scale, AI may likewise worsen social inequality. Its regional impact is unevenly distributed, particularly in regions with a less-skilled workforce. Job loss, dis- and relocation pose serious challenges to workforce stability and social security. With AI performing tasks that are currently still done by humans, jobs will be redefined, leading to a decrease for human-done work in such redefined positions, while AI simultaneously creates new jobs around data analytics and machine learning. As women make up the majority in clerical jobs, the sector which is particularly at risk of being automated, women, across all income groups, have a higher risk of being replaced by AI than men. This might worsen the inequalities between men and women in the workplace.

Furthermore, regarding the fact that 42% of EU citizens lack basic digital skills, many people do not have the skills that are needed for the new jobs that AI will create. These jobs6, which mainly concern data analytics and machine learning, require skills that many people do not possess, which creates the issue of mismatches and skill shortages. This poses a large issue, reinforcing social inequality based on education and skills.

Finally, AI implementation itself also comes with other challenges, regarding safety, security, transparency, liability, and responsibility. Transparency concerns arise from vague algorithms and decision-making processes, raising questions about fairness and accountability. Safety risks encompass potential harm regarding AI-system malfunctioning, poor or unethical design or AI-exploitation due to poor regulations or hacking. Furthermore, determining liability when AI causes problems remains a complex issue, as there is a lack of clear legal framework. All of these issues result in a public mistrust around AI, highlighting the fears of AI violating fundamental human rights and democracy.

Key Stakeholders 

As Artificial Intelligence is a relatively new and rapidly growing notion, legislation around it is likewise still developing. Therefore, many EU-bodies are actively cooperating to ensure proper legislation. Key stakeholders in this process are

  • The European Parliament (EP): as the EU’s legislative body, the EP helps to shape policies that will make the EU’s position in the new Digital Decade stronger. The EP adopted a report on the way the digital future of Europe is to be shaped, and adopted two acts occupied with the improvement of data-sharing. The EP aims to prioritise trustworthiness, implement ethical standards, support job creation, and foster the development of competitive “AI made in Europe.”
  • The European Commission (EC): In April 2021, the EC presented an AI package, containing an impact assessment, its ideas on how to approach AI, and a proposal of appropriate regulatory framework. Moreover, the EC introduced  Europe’s Digital Decade policy programme, containing concrete targets for 2030, and proposed the AI Act;
  • The Council of the European Union: So far, the EP and the Council have reached a provisional agreement regarding the AI act, but both bodies still need to officially adopt the act.
  • Recovery and Resilience Facility (RRF): as a temporary instrument, the RRF aims to support EU member states in recovering from the socioeconomic impacts of the COVID-19 pandemic and fostering long-term economic resilience. The RRF makes €134 billion available for the development of ethical and trustworthy AI;
  • Researchers and companies: as AI is still very new, the EP has stressed the importance of research and innovation through researchers and companies;
  • Investing programmes: As research is a vital component to ensure proper AI-development, maximising resources through investments are vital. 

Measures in Place 

The EU has a shared competence in the field of labour laws. They can adopt directives that set minimum standards for working conditions and for informing and consulting workers, that Member States have to implement in national law.

Although EU initiatives that directly address AI were primarily confined to strategies, the influence of AI on working conditions was effectively regulated by a diverse array of EU laws. These regulations encompass data privacy, health and safety standards, working hours, and labour rights. Two relevant regulations are

  • The General Data Protection Regulation (GDPR): It mandates Member States to establish precise regulations to safeguard the rights and liberties of employees concerning the processing of their personal data within an employment framework.
  • EU Directive 2002/14EC: It stipulates that employers must engage in social dialogue when assessing the repercussions of technological advancements. This directive obliges employers to fulfil both ‘ad hoc’ routine information and consultation obligations, ensuring that workers are consulted regarding the integration of AI technology.

The EU Strategy on shaping the digital transformation aims to develop a resilient Europe for the Digital Decade7, where everyone can enjoy the prosperities that AI brings, while also feeling safe with AI’s implications. The European AI Strategy, proposed to guide the development and deployment of AI across Member States, aims to ensure that AI is developed and used in a responsible, ethical, and human-centric manner, while simultaneously fostering innovation, competitiveness and economic growth. Thus it naturally affects the domain of worker’s rights. Its focus lies on ethical AI, regulatory framework, investment, innovation, education, and (international) cooperation. To reach this goal, the following measures have been taken:

  • AI Act: Proposed by the EC, the AI Act’s main focus is to create clear rules for how AI technology can be developed, sold, and used in the European Union. This is to make sure that AI systems are safe, follow EU laws, and promote innovation while protecting people’s rights and safety. Some of its key incentives are the revision of the definition of AI systems, in order to provide clarity and accuracy; reducing risk by broadening the list of prohibited AI systems; the enhancement of transparency and accountability; and the strengthening of citizens’ fundamental rights. It also defines three levels of risk for the use of AI systems
  • Data Strategy and White Paper on Artificial Intelligence: These documents outline a strategic framework for AI and specify fundamental principles with ramifications for its use in the workforce. These highlight human welfare over technological advancement, both in technology development and regulatory frameworks, and advocate for a unified European approach to AI. The White Paper on AI proposed a risk-based model for AI regulation, where the degree of regulation corresponds to the potential impact of AI on citizens’ lives. 
  • AI@EC communication: This is an outline of the EC’s strategic vision, necessary to prepare for implementing the EU AI Act. It highlights concrete actions that need to be taken in order to ensure the adoption of AI as proposed in the AI act. Key actions include developing internal operational guidelines on how to implement AI systems in an effective manner; the assessment of AI systems in a risk-based approach; the prohibition of using AI systems that do not collide with EU values; and the creation of organisational structures in order to ensure proper AI governance.
  • The Data Governance Act and the Data Act: These two acts have been adopted to improve data sharing, which is beneficial in boosting innovation and ensuring EU competitiveness on the digital market. The acts aim to create public trust and ensure transparency and accessibility of AI-use.

Outlook 

With rapidly growing technologies, it is beneficial for the EU to get a few steps ahead in the digital game, and ensure a leadership position. The immense economic benefit may, however, come at the expense of the general public. With AI’s ability to replace over 300 million full-time workers globally, how can the EU prevent rising unemployment rates and combat job-mismatches regarding skills and education? How can the EU safeguard women, given their increased risk of job loss to AI, especially in clerical occupations? Although the European AI Strategy stresses the importance of ethical, responsible and human-centric AI, there is still a lack of incentives to combat social inequalities that will worsen due to AI implementations. How can the EU aim to boost research and AI-development, while simultaneously aiming to counter current social inequalities and make sure the AI transformation does not come at the expense of workers?

Links for Further Research 

  1.  Disruptive phase in the manufacturing sector that is driven, among others, by AI ↩︎
  2. Countries with a high GDP per capita ↩︎
  3.  Competitive advantage refers to anything that helps producing goods and delivering services better than economic rivals ↩︎
  4.  Countries with a low GDP per capita ↩︎
  5.  The unequal access to any form of digital technology, resulting in inequity of access to information and resources ↩︎
  6.  Administrative or office work ↩︎
  7.  The EU’s ambitious strategy to shape Europe’s digital future over the upcoming decade. 

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