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Redesigning education for AI jobs

An analysis of millions of online vacant jobs reveals the scale of the demand for new skills: one in 10 job postings in advanced economies and one in 20 in emerging market economies now require at least one new skill, the managing director of International Monetary Fund, Kristalina Georgieva, writes in a blogpost. She stresses that governments need to redesign education systems for an AI-driven economy.

“Professional, technical, and managerial roles are seeing the most demand for new skills, particularly in IT, which accounts for more than half of this demand.”
“Sector-specific capabilities are also trending. Healthcare, for instance, is seeing a surge in telecare and digital health skills, while marketing increasingly demands expertise in social media.”

“The changing face of the labour market is, understandably, creating anxiety among workers. With nearly 40% of global jobs exposed to AI-driven change, concerns about job displacement and declining opportunities for some groups are becoming more acute.”

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“This underscores the need for proactive and comprehensive policymaking that prepares the labour force for the future of work and ensures the gains from AI are broadly share
Georgieva writes that employers pay more for workers who acquire emerging skills. In the UK and the US, job postings that include a new skill tend to pay about 3% more. There’s an even greater premium for openings with four or more new skills. “These roles can pay up to 15% more in the UK and 8.5% more in the US.”

“This wage bump can boost the local economy, our research shows. Workers with more money in their pockets spend more at local businesses, which in turn hire more staff to meet demand. In the US, for example, regions with higher adoption of new skills saw employment rise by 1.3% for each 1 percentage point increase in the share of job postings that require new skills over the past decade.”

However, high-skill and low-skill workers tend to gain the most, while middle-skill roles, like routine office jobs, are being squeezed.

But the IMF boss stresses that the picture for AI-related skills is complex.

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“While these skills command wage premiums, they have not contributed to employment growth so far, like other new skills have. In fact, employment levels in AI-vulnerable occupations are lower in regions with high demand for AI skills—3.6% lower after five years than in regions with less demand for these skills.”

“That’s a challenge for young people starting their careers, as entry-level jobs have higher exposure to AI. These findings align with emerging evidence from the US that generative AI adoption reduces entry-level hiring—especially when tasks can be automated.”

“These trends are not inevitable. Policy choices made today can turn disruption into opportunity”, she writes.

Countries with high demand for new skills but relatively low supply—like Brazil, Mexico, and Sweden—need to invest in training and ensuring better education in science, technology, engineering, and mathematics, she says.

“They may also need to outsource or rely on foreign-born workers with skills.”

“Other countries, such as Australia, Ireland and Poland have abundant talent but more modest demand. Their challenge is to stimulate innovation and help companies absorb available talent. Reforms that foster innovation and the creation of new firms and improve business access to finance would help.”

“Emerging economies and low-income countries, where both demand and supply remain relatively limited, will need both sets of policies.”

“Some countries are already leading the way. Our Skill Readiness Index ranks Finland, Ireland, and Denmark among those best positioned to equip their workforces with the skills and agility needed for the future. What sets them apart? Robust investment in tertiary education and lifelong learning programs that help workers adapt as technology evolves.”

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