KDI: AI to replace 256,000 jobs in 10 years, but productivity to rise

South Korea's economy faces a significant shift as artificial intelligence is poised to automate a substantial number of jobs, with a national research institute projecting the displacement of over 256,000 jobs annually within the next decade. The Korea Development Institute (KDI) report, "Analysis of the Macroeconomic Impact of Artificial Intelligence," estimates that 638,000 jobs could be affected by AI automation by 2034, with nearly 2.1% of the current workforce potentially being replaced.

The KDI analysis identifies professional and office support roles as particularly vulnerable. These sectors often involve a high degree of digital information processing and adherence to established rules, making them susceptible to automation by AI systems. Nam Chang-woo, a senior researcher at KDI, noted that fields like research and development, information and communication technology, and management and administration are prime candidates for AI integration due to their reliance on rule-based decision-making.

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Research and development, information and communication technology, and management and administration have a high possibility of having their detailed tasks automated by artificial intelligence because they involve a lot of digital information processing and rule-based decision-making.

Conversely, jobs requiring significant interpersonal interaction, such as those in face-to-face services and social welfare, are expected to have limited exposure to AI automation. While the prospect of job losses raises concerns, the KDI report also highlights the potential economic benefits of AI. The widespread adoption of generative AI is predicted to enhance South Korea's total factor productivity by 1.5% to 3.5% over the next ten years. This metric reflects the efficiency with which labor and capital are utilized for production.

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AI automation has a significant economic effect, especially in high-wage job groups.

Furthermore, the integration of AI is anticipated to increase corporate revenue per employee by approximately 20%. To mitigate the impact of job displacement, the KDI report urges the government to implement proactive measures. These include expanding support for job redesign and retraining programs for workers in highly exposed sectors. In the longer term, establishing industry-specific AI governance frameworks is recommended to foster sustainable growth.

Nam emphasized the need for tripartite discussions involving labor, management, and government to address job transitions and wage structures, particularly for highly exposed professional roles. He also called for strengthening the social safety net to cover the gaps in unemployment benefits, which may widen due to the rise of non-standard employment arrangements driven by AI, such as gig work and platform labor.

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We need to discuss job transitions and wage systems through labor-management-government consultations focused on professionals highly exposed to AI, and strengthen the social safety net by closing gaps in unemployment benefits due to the increase in non-standard work caused by AI.