A new series of reports examined the impact AI will have on the Irish economy and labour market.
As AI continues to dominate discussions around technology discourse, a series of reports released by the Irish Government have confirmed that Ireland’s future amid the further adoption of AI is uncertain.
The three reports, titled ‘Artificial Intelligence: Friend or Foe’, explored the complex relationship between advancements in AI and the country’s economy and jobs market, offering significant insight into how AI adoption could potentially effect Ireland’s workforce.
Whilst AI has the power to drive industries and revolutionise how people live and work, the report also indicated that more than 800,000 people could find their jobs at risk due to the introduction of new technology.
Key areas covered within the report, which was issued by the Department of Finance and the Department of Enterprise, Trade and Employment, include the macroeconomics of AI adoption, the occupations most at risk by exposure to AI and the role of public policy.
Macroeconomics
While technological progress is not a new concept, the pace at which technology such as AI is evolving, is significant. According to the report, “Benefits in the form of higher productivity and living standards”, as seen in past industrial eras, is plausible.
However, it is worth considering that AI adoption is at an early stage, thereby limiting the availability of real-world empirical data. This means there is still considerable uncertainty around the long-term effects of AI. Some studies referenced within the report expect a sizable impact on economic growth, while others point to a more subdued outcome in line with previous waves of technological innovation.
In some scenarios, the report indicates that AI is associated with a positive “levelling out of income distribution”, but equally, other hypotheses conclude that these technologies could exacerbate income differentials.
The report’s findings echo those of a similar report commissioned by Google earlier this year, which warned of the double-edged sword of AI. It suggested that Ireland’s economy could grow by up to €45bn in the next decade thanks to generative AI, but warned that it could displace a significant number of jobs.
Who is the most exposed to AI?
To better understand the risk to certain jobs, the report categorised occupations into four separate groups, based on levels of increasing risk and lowered AI compatibility. It found that 72 occupations have a higher level of AI exposure, have less AI complementing strengths and are therefore “at-risk” of being replaced by AI applications. According to the report, these roles account for 30pc of total employment in Ireland.
On the flip side, 33pc of employment was found to be in occupations where AI is likely to be beneficial and boost productivity, for example, those in managerial, directorial and senior official positions.
Data from the report also indicated a bias against women and people from lower income households. Women were found to employed within high-risk roles, such as administration and customer service, far more frequently than their male counterparts, whereas men were seen to be better represented in industries less exposed to AI intervention, such as the agricultural and construction sectors. Early analytics also showed a link between AI exposure and income, suggesting people who earn a higher salary stand to benefit more from the increased adoption of AI.
Unsurprisingly, geography also came into play, as urban areas widely regarded as strong technological hubs, such as Dublin, Cork and Galway city, were recorded as having a higher level of AI exposure, in comparison to rural areas, like Cavan, Monaghan and Tipperary, which have larger agricultural industries.
On a broader scale, the report showed that Ireland is “marginally more exposed to AI than the advanced economic average, at 63pc versus 60pc”.
The need for public policy
The report also made clear the importance of taking advantage of technological benefits to minimise disruptive costs, without creating a digital divide or compromising on other policy objectives.
Research shows the extent of AI’s impact on the Irish economy “will depend on a variety of economic, social and policy factors, including levels of AI regulation”, meaning policymakers will have to ensure that barriers to AI adoption, that could potentially lead to an unequal two-tier labour market, are eliminated.
Additionally, structural changes brought about by the country-wide incorporation of AI technology will be significant, therefore, strong social safety nets and public finances will have to be in order, to avoid further disruption.
The report indicated the transformative impact of AI on Ireland’s economy and labour market has the potential to move far beyond just the consideration of the number of people working in different occupations or labour productivity. There is also likely to be widespread consequences for the education and training systems, public finances and measures of inequality and social exclusion.
Public policy will play a critical role in navigating challenges, but a number of questions remain, for example, is it possible to currently identify which AI applications are likely to be labour-augmenting or labour replacing? What options will there be to support vulnerable socio-economic groups. Whose employment is more likely to be threatened by the increased adoption of AI?
Based on the report’s findings, the sooner policymakers can engage with and discuss the most pressing themes, the better placed the economy will be to maximise the benefits and minimise the risks AI.
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