How Artificial Intelligence Will Affect Asia’s Economies

IMF Blog, January 5, 2025

Source details

Authors: Tristan Hennig, Shujaat Khan
Date: January 5, 2025
Core message: AI will cause labor market shifts across Asia-Pacific, with advanced economies more affected; policy action can reduce inequality risks and enhance inclusive gains.

Exposure and complementarity
- About half of all jobs in the region’s advanced economies are exposed to AI, compared to only about a quarter in emerging market and developing economies.
- Advanced economies have more jobs that can be complemented by AI, meaning the technology will likely enhance productivity rather than replace these roles altogether.
Cross-country inequality risks
- Concentration of AI-complementary jobs in advanced economies could worsen inequality between countries over time.
- About 40 percent of jobs in Singapore are rated as highly complementary to AI, the share is just 3 percent in Laos.
Within-country inequality risks
- Most workers at risk of displacement in the Asia-Pacific region work in service, sales, and clerical support roles.
- Workers more likely to benefit from AI typically work in managerial, professional, and technician roles that already tend to be among the better paid professions.
Gendered impacts
- Women are more likely to be at risk of disruption from AI because they are more often in service, sales, and clerical roles.
- Men are more represented in occupations unlikely to be impacted by AI at this stage, like farm workers, machine operators, and low-skill elementary workers.

Strengthen social protection
- Implement more effective social safety nets to support workers affected by AI-induced disruption.
Invest in reskilling and education
- Combine social safety nets with reskilling programs for affected workers to achieve an inclusive AI transition.
- Prioritize education and training to help the workforce leverage AI’s productivity gains, especially in Asia’s emerging economies with relatively few AI-complementary jobs.
- Support displaced workers’ transitions to new roles and boost research and development to enhance innovation.
Regulate for ethical use and data protection
- Set regulations that promote ethical AI use and data protection to mitigate AI-induced risks and better capitalize on growth and productivity opportunities.

This blog is based on Box 1 of the analytical note included in the October 2024 Asia-Pacific Regional Economic Outlook.

APD REO Note: Asia-Pacific's Structural Transformation: The Past and Prospects
- APD REO Note: Asia-Pacific's Structural Transformation: The Past and Prospects (Markdown version)
- APD REO Note: Asia-Pacific's Structural Transformation: The Past and Prospects (PDF)