Treasury note cites 'disproportionate impact on higher-skilled tasks'
While the overall impact of artificial intelligence on the labour market remains unknown, it is possible that New Zealand is "more vulnerable" to it.
This is according to an analytical note released by New Zealand's Treasury on Monday which looked into the impact of AI on the country's economy, including its labour and employment.
According to the report, AI has an "outsized impact on higher, rather than lower-skilled, employment" which could have an effect on advanced economies.
"AI's disproportionate impact on higher-skilled tasks might mean employment in higher-skilled, advanced economies like New Zealand is more exposed to the impacts of AI," the report read.
But the net impact of AI on labour demand and share will depend on the balance between job destruction and creation, which the report described as a situation that is "nuanced."
"If the diffusion of AI is slower and less extensive in New Zealand than in other developed countries, the adjustment period for employment could be extended," the report read.
Prolonged reallocation could reduce the impact that would come with a dramatic workforce reduction due to AI, according to the report.
"Nevertheless, this might also slow the creation of new tasks and reinstatement of employment or cause jobs to be transferred to AI abroad," it added.
Focus on skills amidst growth of AI
Amid this uncertainty over AI's impact, the report underscored the importance of upskilling to support the adoption of AI and ease the transition between displacement and reinstatement of jobs.
"A focus on skills will be important both to help workers transition to a labour market where AI is widely used, and to support the diffusion of AI," the report read.
According to the report, New Zealand's policy makers should consider the following:
- What types of skills are likely to be displaced by AI?
- What types of skills are going to be needed to support the adoption of AI and the creation of new tasks?
- How should our skills framework be updated to ensure a future-ready workforce?
- Given the uncertainty, how can we help future cohorts to make informed decisions about career paths?
The report comes amid the growing use of AI across the world, with 75% of global knowledge workers already using it, according to the latest Microsoft Work Trend Index.
In New Zealand, Deloitte's Generative AI in Asia Pacific report revealed that the country has a more "cautious stance" on adopting AI compared to other countries in the region.
Last year, two researchers in New Zealand led the development on a new analytical framework on AI use amid growing demand for policies governing the technology.
