IBM CEO Arvind Krishna disclosed that the company expects around 7,800 jobs to be replaced by AI within the next five years. This change could affect nearly one-third of IBM’s non-customer-facing roles, which currently involve around 26,000 workers. Consequently, IBM will freeze hiring in certain areas, focusing on filling positions that directly touch clients or technology.
Opinions are divided on whether the rise of AI is good or bad for the industry. Proponents argue that AI can enhance productivity, leading to new industries and job opportunities. For instance, AI could optimize supply chains, reduce energy consumption, and facilitate medical research, creating demand for skilled workers in these areas.
However, critics caution that AI’s rapid advancement could exacerbate income inequality. As jobs become automated, low-skilled workers may struggle to find employment, widening the gap between the “haves” and “have-nots.” Additionally, smaller businesses may be unable to compete with larger companies that can afford cutting-edge AI technology, further concentrating wealth and market power.
Ultimately, AI’s impact on the industry will depend on how society manages its integration into the workforce, ensuring that its benefits are shared by all.
THINK LIKE AN ECONOMIST!
Q1. Define the term income inequality.
Q2. Explain how AI’s development might increase productivity.
Q3. Using a labour market diagram, analyse how the rise of AI might lead to job losses.
Q4. Evaluate the impact that the rise of AI is likely to have on economic growth and development.
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