Artificial intelligence (AI) has so far not had a significant impact on Europe’s labor market, according to European Central Bank (ECB) economists. But as the technology evolves rapidly, uncertainty remains as to what the long-term impact might be.
The ECB’s analysis reviewed data from 3,500 institutions, some of which are using AI and some of which are not. The results show that there is no significant difference between the two parties in terms of hiring or retrenchment.
In contrast, those using AI frequently tended to hire new employees about 4 percent more than average. In a blog post, economists said investment in AI and its widespread use in the current scenario do not indicate job replacement.
Many organizations, they explain, are simultaneously developing and implementing AI technologies and maintaining existing manufacturing processes. As a result, there is a need to recruit additional manpower. AI is also helping some organizations to expand rapidly.
However, economists have also given warnings. Companies that have invested in AI with the goal of reducing labor costs have actually laid off workers. Although only 15 percent of organizations using AI cite reducing labor costs as a major objective, this does not yet outweigh the overall positive trend.
Meanwhile, concerns are growing around the world that AI could threaten jobs. US tech giant Amazon and German insurer Allianz have recently cited AI adoption as a reason for job cuts.
Last week, a viral blog post raised fears of mass layoffs and reduced economic growth due to AI, causing volatility in global markets.
According to ECB economists, AI has yet to bring about a major transformation in the production process. But the situation may change as the technology matures. As a result, only time will tell how deep AI’s impact on employment will be in the long run.
