Scanning the international headlines these days offers little hope to those seeking work, careers, and opportunities. Across much of the world, labour markets are ailing, unemployment is up, and opportunities are down, thanks to a combination of wars, slower growth, global crises, tariffs, supply chain disruptions, and the sweeping penetration of Artificial Intelligence (AI) into almost every sector.
The changes being ushered in by the AI revolution increasingly mean that education is out of synch with industry. In many countries, policymakers are concerned that universities are now producing graduates with yesterday’s skills for tomorrow’s markets. Meanwhile, informal employment is on the rise. More than half the world’s population now work without job security or social protection.
A report by Stanford University in the United States shows a 16% decline in youth employment in sectors where AI has been widely introduced, and these trends are only set to accelerate, with Generative AI (GenAI) expected to redraw the labour market, affecting up to 40% of jobs globally (60% in advanced economies), according to a World Bank report. Routine, learnable jobs in sectors such as transport, retail, and administration are most at risk.
Risks and opportunities
While new technology always creates new jobs and enhances efficiency, huge challenges lie ahead, not least in the widening income gap, inflation, and the ageing of Western societies, which poses a profound threat to growth and labour dynamics. While inflation will test policymakers’ nerves in the short term, ageing will test the sustainability of entire economies in the long run. In Japan, for instance, the average age is expected to be more than 50 years by the end of this decade.
European labour markets suffer from a gap between delayed retirement and young people’s entry into work, a recipe for economic dysfunction that, if it persists, will threaten growth and stability. Despite this, Europe and the United States have tightened migration laws since 2020, reducing the inflow of young migrants and contributing to labour shortages, leading to central bank warnings.
