The European Central Bank reports AI has not yet caused significant job losses in Europe, though its long-term impact remains uncertain.
FRANKFURT: Artificial intelligence has so far had only a minor effect on employment levels across Europe, according to a new analysis from economists at the European Central Bank.
In a blog post published on Wednesday, the ECB economists detailed their findings after comparing data from 3,500 firms, some of which reported using AI and some of which did not.
The analysis found no overall difference in job creation or job cutting between firms that use AI and those that do not.
Firms that use AI particularly frequently were in fact 4% more likely to hire new staff than the average company.
“As things stand, based on firms’ overall hiring plans, investment in and the intensive use of AI are not yet replacing jobs,” the economists stated.
They added that some firms are hiring additional employees, perhaps because they are looking to develop and implement AI technologies while maintaining existing production processes, or because AI helps them scale up more quickly.
The economists did warn that firms which invested in AI with the explicit aim of cutting labour costs did indeed end up reducing jobs, suggesting there could be more profound effects as the technology matures.
“However, only 15% of firms that use AI cite reducing labour costs as a factor, and this is insufficient to offset the overall positive effects observed to date,” they noted.
Concern has grown globally that AI could have a deep impact on employment, with firms including American tech giant Amazon and German insurer Allianz citing AI uptake as a reason for recent job cuts.
Financial markets experienced volatility last week after a viral blog post described a gloomy scenario in which AI led to mass layoffs and depressed economic growth.
The ECB economists cautioned that the limited effects seen to date might not continue into the future.
“AI has not yet significantly transformed production processes,” they concluded, adding that given this is set to change, the longer-term impact of AI on employment remains less clear.
