Countries have to be better prepared for the impact of artificial intelligence (AI) on their labour force and jobs, according to Minouche Shafik, Director, London School of Economics and Political Science (LSE).

Addressing the IG Patel lecture here on Wednesday, Shafik said not every country is investing enough in skilling its labour force for the advent of AI. “The only country which has made significant investments is Denmark, which spends 1.7 per cent of its GDP on active labour market policies,” she said in response to a question.

Shafik further said AI will impact several jobs in services, be it doctors or lawyers. A large number of jobs will get automated, she added.

“For instance, a lot of diagnostics is done based on AI but people still want the human touch of a doctor,” she said, adding that AI will not displace doctors. As part of the new social contracts, she stressed, countries must invest in re-skilling labour in jobs that cannot be done by robots.

Female labour force

Shafik also raised concerns about the decline in female labour force participation in India, saying she is “puzzled” by it as it is contrary to the pattern in other parts of the world.

Female labour force participation has declined in India amongst married rural women, which could have some links to wages and the kind of jobs and support they need, she observed.

Noting that India is on the cusp of a huge change in its social contracts, she recommended that it link its retirement age to life expectancy to avoid huge fiscal costs later.

Meanwhile, Shafik announced the launch of the LSE India Initiative, which will mobilise research on India and fund more scholarships for Indian students.

She expressed hope that combined with the changes in the post-study visa regime in the UK, the LSE initiative will increase the number of Indian students at the institution in London.

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