AI’s uneven impacts

AI’s impact on employment will not be felt equally around the world. It will impact different countries differently. Disparities in political systems, economic development levels, labour market structures and access to AI infrastructure (including energy) are shaping how regions are preparing for and are likely to experience AI-driven disruption. Smaller, wealthier countries are potentially in a better position to manage the scale and speed of job displacement. Some lower-income societies may be cushioned by the disruption owing to limited market penetration of AI services altogether. Meanwhile, high and medium income countries may experience social turbulence and potentially unrest as a result of rapid and unpredictable automation.

The United States, the current leader in AI development, faces significant exposure to AI-driven disruption, particularly in services. A 2023 study found that highly educated workers in professional and technical roles are most vulnerable to displacement. Knowledge-based industries such as finance, legal services, and customer support are already shedding entry-level jobs as AI automates routine tasks.

Technology companies have begun shrinking their workforces, using that also as signals to both government and business. Over 95,000 workers at tech companies lost their jobs in 2024. Despite its AI edge, America’s service-heavy economy leaves it highly exposed to automation’s downsides.

Asia stands at the forefront of AI-driven automation in manufacturing and services. It is not just China, but countries like South Korea that are deploying AI in so-called “smart factories” and logistics with fully automated production facilities becoming increasingly common. India and the Philippines, major hubs for outsourced IT and customer service, face pressure as AI threatens to replace human labour in these sectors. Japan, with its shrinking workforce, sees AI more as a solution than a threat. But the broader region’s exposure to automation reflects its deep reliance on manufacturing and outsourcing, making it highly vulnerable to AI-driven job displacement in a geopolitically turbulent world.

Europe is taking early regulatory steps to manage AI’s labour market impact. The EU’s AI Act aims to regulate high-risk AI applications, including those affecting employment. Yet in Eastern Europe, where manufacturing and low-cost labour underpin economic competitiveness, automation is already cutting into job security. Poland and Hungary, for example, are seeing a rise in automated production lines. Western Europe’s knowledge-based economies face risks similar to those in America, particularly in finance and professional services.

Oil-rich Gulf states are investing heavily in AI as part of diversification efforts away from a dependence on hydrocarbons. Saudi Arabia, the UAE, and Qatar are building AI hubs and integrating AI into government services and logistics. The UAE even has a Minister of State for AI. But with high youth unemployment and a reliance on foreign labour, these countries face risks if AI reduces demand for low-skill jobs, potentially worsening inequality.

In Latin America, automation threatens to disrupt manufacturing and agriculture, but also sectors like mining, logistics, and customer service. As many as 2-5% of all jobs in the region are at risk, according to the International Labor Organization and World Bank. And it is not just young people in the formal service sectors, but also human labour in mining operations, logistics and warehouse workers. Call centers in Mexico and Colombia face pressure as AI-powered customer service bots reduce demand for human agents. And AI-driven crop monitoring, automated irrigation, and robotic harvesting threaten to replace farm labourers, particularly in Brazil and Argentina. Yet the region’s large informal labour market may cushion some of the shock.

While most Africans are optimistic about the transformative potential of AI, adoption remains low due to limited infrastructure and investment. However, the continent’s rapidly growing digital economy could see AI play a transformative role in financial services, logistics, and agriculture. A recent assessment suggests AI could boost productivity and access to services, but without careful management, it risks widening inequality. As in Latin America, low wages and high levels of informal employment reduce the financial incentive to automate. Ironically, weaker economic incentives for automation may shield these economies from the worst of AI’s labour disruption.