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Screen capture of Bank of Korea report filed on Feb. 10, which shows occupations that will be affected by AI adoption [BANK OF KOREA]
More than half Korea’s work force will be massively impacted by AI, either through job displacement or enhanced productivity driven by the technology’s adoption, a Bank of Korea (BOK) report showed on Monday.
The report, created jointly with the International Monetary Fund, analyzed AI’s impact on employment through two metrics: occupational AI exposure, which measures the extent to which tasks can be replaced by AI, and AI complementarity, which reflects the extent to which a job is socially or materially safeguarded from AI displacement by its characteristics.
Twenty-four percent of the domestic work force was placed under high exposure, high complementarity category, meaning they will receive a productivity boost utilizing AI. Another 27 percent was grouped under high exposure, low complementarity, meaning they will receive lower wages and face job losses.
Women, young people and highly-educated, high-income workers were most likely to exhibit both high exposure and complementarity, suggesting that AI could act as an opportunity for these groups, the BOK said. Professions likely to benefit from AI included doctors, corporate executives, professors and financial experts while those that may be threatened include accounting and clerical staff, computer systems specialists and telemarketers.
AI deployment can potentially up total productivity between 1.1 and 3.2 percent and GDP between 4.2 and 12.6 percent, according to simulation results from the report. The differences in range derive from uncertainties regarding AI’s economic impact and the timing of the technology’s adoption. However, the effect is not universal across firms, being more pronounced in larger and mature corporations.
Korea’s GDP would decline by 16.5 percent between 2023 and 2050 in the absence of AI, due to reduced labor supply from low birthrates and aging, according to United Nations population forecasts. However, AI adoption could significantly mitigate this decline, reducing the GDP drop to 5.9 percent, if it’s able to not only reduce or supplement human labor, but also boost productivity.
Crucial to this outcome, however, is increasing the transition rate from high-exposure, low-complementarity jobs to high-exposure, high-complementarity jobs. However, data from the Korea Labor and Income Panel Study showed that workers tend to choose similar occupations when switching jobs, with an average of 31 percent having made such a transition 2009 and 2022.
Korea surpassed the average advanced nation in its readiness to take on an AI transition, ranking 15th out of 165 countries on the AI Preparedness Index, the report said, and excelled in categories such as “innovation and economic integration,” placing at No. 3, and No. 18 in categories “regulation and policy” and “digital infrastructure,” respectively. It was identified as needing “significant” room for improvement in “human capital utilization and labor market policies.”
“Targeted policies are needed to enhance labor market flexibility through education and retraining programs while simultaneously strengthening social safety nets for vulnerable groups,” the report said.
BY LEE JAE-LIM [[email protected]]