Countries have to be much more prepared for the impact of Artificial Intelligence (AI) on their labour force and jobs, believes Minouche Shafik, Director, London School of Economics and Political Science.

Addressing the IG Patel lecture on Wednesday, Shafik said that every country is under-investing 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 in active labour market policies,” she said in response to a question.

Shafik said that AI will impact many jobs in services, be it doctors or lawyers, and said that a large part of jobs will be automated. “For instance, a lot of diagnostics is done based on AI, but people still want the human touch of a doctor,” she noted, adding that AI will not displace doctors.

As part of the new social contracts of the 21st century, she stressed that countries must invest in reskilling labour in jobs that can not be done by robots.

Women and jobs

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

She said that 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.

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

India in focus

Meanwhile, Shafik also announced that LSE is launching the LSE India Initiative, which will mobilise more research on India, and fund more scholarships for Indian students.

She also expressed hope that the scholarships, along the recent changes in the UK’s post-study Visa regime , will increase the number of Indian students at LSE.

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