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Artificial Intelligence to impact local jobs

The effect of Artificial Intelligence (A.I.) on the Business Process Outsourcing (BPO) sector has already started to be felt in Belize, but its impact will continue to grow—in both positive and negative ways—over the short to medium term, explained Katherine Meighan, the principal for a local BPO company. 


The Reporter spoke with Meighan on Thursday, and she explained that the rapid advance in AI technology will reshape the BPO industry globally, and Belize is no exception. Moreover, while Meighan spoke specifically on her sector, there is mounting evidence that other industries are likewise “exposed” to the radical changes to be brought about on account of generative A.I., which is a type of artificial intelligence that creates new content (images, text, videos, software code, etc.).


Meighan’s comments align with the findings reported in a recent study produced by the International Monetary Fund (IMF), which, among other things, explained that approximately 26 percent of jobs in low-income countries are exposed to A.I.


The report—entitled “Gen A.I.—Artificial Intelligence and the Future of Work”—explained that although developing economies “may experience less immediate AI-related disruptions, they are also less ready to seize AI’s advantages.”


Fundamentally, the impacts vary depending on whether the industry could be described as being highly complementarity with AI or subject to high levels of displacement on account of the emerging technology replacing workers as opposed to augmenting their work. The former (i.e. jobs with high A.I. complementarity) is expected to see employment and productivity growth, while industries susceptible to displacement may see the reverse.


A.I. and Workers’ Skill Levels


According to the study, the impact also varies based on workers’ education levels. “College-educated workers are better prepared to move from jobs at risk of displacement to high complementarity jobs. … In contrast, workers without postsecondary education show reduced mobility.”


This finding is noteworthy for Belize, where, according to the SIB’s Labour Force Survey for October 2022, more than 80 percent of Belize’s working age population lack post-secondary education, and only approximately 16 percent possess tertiary level education.


These statistics have important implication for Belize’s education policy, as well as for the Government of Belize to prioritize the requisite infrastructural transformation to enable the Belizean businesses and workers to capitalize on the benefits of A.I. complementarity, while minimizing incidences of displacement.

Age and Income Inequality

 

The study also demonstrated that age also matters. “Younger workers who are adaptable and familiar with new technologies may also be better able to leverage the new opportunities. In contrast, older workers may struggle with reemployment, adapting to technology, mobility, and training for new job skills.”

 

Lastly, there is scope for the advent of this emerging technology—if not handled carefully—could result in increased inequality. “Model simulations suggest that, with high complementarity, higher-wage earners can expect a more-than-proportional increase in their labor income, leading to an increase in labor income inequality. This would amplify the increase in income and wealth inequality that results from enhanced capital returns that accrue to high earners,” noted the report.

 

As Meighan stated, the changes are already beginning to manifest themselves in Belize—albeit fairly contained and moderate at this juncture. Nevertheless, the speed at which the technology is advancing and its cost effectiveness signals the need for agile public policy and private-sector responses.

 

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