The Impact of AI on Job Markets in Emerging Economies
The Impact of AI on Job Markets in Emerging Economies © 2024 by Mayobanex Martinez is licensed under CC BY 4.0
Introduction
The artificial intelligence (AI) environment is undergoing a seismic shift as transformative as the Industrial Revolution and the internet boom. In emerging economies, this new technology shows a unique mix of challenges to handle and opportunities to take advantage of. These nations are working to keep up with the rapid advancements while figuring out how to take advantage of the opportunities AI presents. This paper examines how AI affects job sectors, drives economic growth, influences policymaking, and transforms financial systems in these economies. By exploring key examples and data, we can better understand the long-term impact of AI and what it means for the future of work and development.
AI and Job Displacement in Urban vs. Rural Areas
AI is not impacting all jobs equally. Its effects differ based on the type of work and whether it is located in urban or rural areas. Carbonero et al. (2023) show that “urban jobs often involve tasks that AI can handle,” which puts workers in cities at a higher risk of job loss. In contrast, many rural jobs, such as those in agriculture or manual labor, are less affected because they require physical tasks that AI has not mastered yet. This imbalance shows that AI is not affecting everyone the same way, and this uneven impact puts extra pressure on policymakers. Countries need to come up with different strategies to handle these changes. In cities, the focus should be helping workers move into jobs that AI cannot easily take over or offering programs that teach new skills to match the demands of growing industries. At the same time, rural economies may require investments in technology to boost productivity while maintaining job security.
| Location | Displacement Risk (%) |
| Urban Areas | 70 |
| Rural Areas | 20 |
This comparison makes it clear that policymakers need specific actions. By focusing on ways to support certain jobs or helping workers shift into new roles, they can lessen the impact of unexpected job losses.
Economic Growth Potential in Asia-Pacific
AI is not just about job loss—it is also driving significant economic growth. Haseeb et al. (2019) project that AI could boost GDP in the Asia-Pacific region by up to 16% by 2030. Artificial intelligence is making a difference in farming and healthcare. Moreover, farmers now use tools to predict the weather, grow crops more efficiently, and avoid wasting resources. In healthcare, it is helping doctors provide care to people in areas that do not usually have access to medical services.
These changes are a big deal for emerging economies. They show how AI can improve lives and help communities grow. Still, it is important to ensure everyone benefits and no one gets left behind.
| Year | Projected GDP Growth (%) | Forecast(Projected GDP Growth (%)) | Lower Confidence Bound(Projected GDP Growth (%)) | Upper Confidence Bound(Projected GDP Growth (%)) |
| 2025 | 10 | |||
| 2030 | 16 | 16 | 16.00 | 16.00 |
| 2035 | 22 | 22.00 | 22.00 | |
| 2040 | 28 | 28.00 | 28.00 | |
| 2045 | 34 | 34.00 | 34.00 |
Overview:
This analysis explores potential GDP growth in the Asia-Pacific region as AI becomes more integrated into the economy. Starting with known growth rates for 2025 (10%) and 2030 (16%), therefore a simple trendline will be used to estimate future growth up to 2045.
Projected Growth
Data Insights
Takeaway: This projection suggests AI has the potential to drive substantial economic growth in the Asia-Pacific. Future assessments will help refine these estimates as more data comes in, but the trend points toward a positive impact from AI in this region.
Policy Needs and the Role of Governance
The way countries manage AI will determine how it shapes their economies. Schiff (2023) explains that AI policies must “balance the benefits of innovation with the risks of security and ethical concerns.” Different nations approach this balance in their own ways. The U.S. focuses heavily on national security and maintaining its technological edge. France has prioritized ethical AI with initiatives like “AI for Humanity.” South Korea has developed policies that integrate AI into key industries while addressing workforce concerns.
| Country | Year | Policy Milestone |
| United States | 2018 | First National AI Strategy |
| France | 2019 | AI for Humanity Initiative |
| South Korea | 2021 | Korean AI Policy |
For emerging economies, getting AI policy right is critical. Policies should focus on supporting innovation while protecting workers and ensuring equitable outcomes. If governments do not act thoughtfully, AI could worsen economic inequalities instead of reducing them. At the same time, clear guidelines can help attract investment and encourage responsible AI use.
Financial Decision-Making and Risk Management
Artificial intelligence is transforming the way financial choices are made by providing tools that improve precision and efficiency. Sun (2024) noted that “Models driven by AI enhance accuracy in financial planning and risk management,” which is vital support for economies with limited resources. These systems assist in refining investment strategies, predicting market fluctuations, and managing risks more adeptly.
| Year | Financial Accuracy Improvement (%) |
|---|
| 1 | 10 |
| 2 | 15 |
| 3 | 20 |
| 4 | 25 |
| 5 | 30 |
Optimizing a portfolio enables governments and companies to make more informed decisions about how to allocate their resources best. Conversely, risk management tools identify potential economic issues and assist in developing strategies to address them. With these innovations, emerging economies can strengthen their financial frameworks and lay the groundwork for sustained stability.
Conclusion
AI is creating new opportunities for growth and innovation, especially in emerging economies with their own challenges, particularly when it comes to job security in urban areas. Managing these transitions requires finding a middle ground between embracing technological advancement and protecting workers’ livelihoods. Governments, businesses, and communities need to collaborate to ensure that the advantages of AI are accessible to all while reducing its possible negative impacts. Through thoughtful strategic planning, AI has the potential to promote economic growth in a manner that fosters equity and sustainable stability.
References
Carbonero, F., Davies, J., Ernst, E., Fossen, F. M., Samaan, D., & Sorgner, A. (2023). The impact of artificial intelligence on labor markets in developing countries: A new method with an illustration for Lao PDR and urban Viet Nam. Journal of Evolutionary Economics, 33(3), 707–736. https://doi.org/10.1007/s00191-023-00809-7
Haseeb, M., Sasmoko, Mihardjo, L. W. W., Gill, A. R., & Jermsittiparsert, K. (2019). Economic impact of artificial intelligence: New look for the macroeconomic assessment in Asia-Pacific region. International Journal of Computational Intelligence Systems, 12(2), 1295–1310. https://doi.org/10.2991/ijcis.d.191025.001
Schiff, D. S. (2023). Looking through a policy window with tinted glasses: Setting the agenda for U.S. AI policy. Review of Policy Research, 40(5), 607–611. https://doi.org/10.1111/ropr.12433
Sun, J. (2024). Theoretical and practical research on mathematical modeling of economy and finance based on artificial intelligence. Applied Mathematics and Nonlinear Sciences, 9(1). https://doi.org/10.2478/amns.2023.2.00199
Chen, D., Xu, H., & Zhou, G. (2024). Has artificial intelligence promoted manufacturing servitization: Evidence from Chinese enterprises. Sustainability, 16(6), 2526. https://doi.org/10.3390/su16062526