How AI Will Disrupt The Job Market: Should India Worry?

Emerging markets like India may see disruption. But, despite the alarming figures on job displacement, AI is expected to generate millions of new roles, echoing historical trends of technological transformation.

The coming five years will be critical in determining whether artificial intelligence becomes a force for equitable growth or deepens global disparities, according to the UNCTAD (external link) and McKinsey (external link) report.

AI is no longer on the horizon -- it is here, accelerating rapidly and reshaping the global workforce. Two extensively researched reports by UNCTAD and McKinsey comprehensively analyse how AI is transforming employment. While AI offers enormous potential for innovation and productivity, it also poses serious risks for displacement, particularly in advanced and middle-income economies.

Jobs most at risk of automation

The breadth of AI’s reach has expanded far beyond manufacturing and repetitive factory work.

According to UNCTAD, up to 40 per cent of global jobs are at risk due to AI, rising to 60 per cent in advanced economies where automation is easier to implement.

McKinsey and UNCTAD collectively identify the following sectors as particularly vulnerable:

• Driving and transportation: Autonomous vehicles threaten jobs in trucking, delivery and taxi services.
• Administrative support: Roles like data entry, scheduling and clerical tasks are among the first to be automated.
• Customer service and sales: Chatbots and AI-powered CRM systems are replacing repetitive human interactions.
• IT and tech support: Entry-level coding, software testing and helpdesk roles are at high risk.
• Marketing and content creation: AI is increasingly handling product descriptions, ad targeting and customer segmentation.
• Manufacturing and food services: Smart machines and cleaning robots are replacing manual labour in factories, kitchens and retail.
• Recruitment and HR: AI tools are automating resume screening, interview scheduling and even initial candidate assessments.

These job categories are characterised by rule-based, repetitive processes -- making them low-hanging fruit for AI systems. Notably, knowledge-intensive white-collar roles are also at risk, signalling a shift from traditional automation targeting only manual labour.

Demographic and economic disparities

The impact of AI won’t be evenly distributed:

• Women are three times more likely to face displacement, largely due to their higher representation in administrative and service roles.
• Older workers may struggle to adapt due to lower digital fluency and the difficulty of acquiring new technical skills.
• Emerging markets may see disruption as well but low-income countries are somewhat insulated, with only 26 per cent of jobs at risk owing to their lower reliance on automatable technologies.
• Advanced economies, ironically, will be hardest hit -- high wages make automation more economically attractive and the most vulnerable jobs are concentrated there.

This suggests that AI may erode the comparative advantage of low-wage labour in developing nations, potentially widening global income inequality if not managed carefully.

Scope of displacement

• Up to 390 million jobs globally could be affected in the coming years, with a significant portion undergoing task-level disruption rather than total elimination.
• In the United States, 12 million workers may need to switch occupations by 2030 -- a shock comparable to the upheaval caused by the COVID-19 pandemic.
• Office support jobs could decline by 18 per cent and customer service roles by 13 per cent. Even food services will see a decline; though, at 2 per cent, it is lesser.

Importantly, many jobs won’t disappear but will be redefined as AI handles specific tasks within broader roles. For example, a paralegal may spend less time searching legal databases and more time interpreting AI-generated insights.

AI as a job creator

Despite the alarming figures on job displacement, AI is expected to generate millions of new roles, echoing historical trends of technological transformation.

According to McKinsey over 60 per cent of today’s jobs didn’t exist in 1940. AI will continue this pattern by creating entirely new professions.

Emerging job categories include:

• AI system development: Engineers, trainers and ethicists to build, guide and maintain AI systems.
• Data science and analytics: Roles interpreting and leveraging complex datasets.
• Cybersecurity: Guarding against sophisticated AI-powered cyber threats.
• STEM professions: Expanded demand for scientists, mathematicians and engineers.
• Healthcare technology: AI-driven diagnostics, bioinformatics and personalised medicine.
• Human-AI collaboration: Roles where humans supervise, guide and augment AI tools.
• Creative professions: Designers, storytellers and artists who can leverage AI without being replaced by it.

These roles will require a unique blend of technical skills and human insight -- particularly in fields where emotional intelligence, judgment and creativity remain irreplaceable.

Skills of the future

The reports converge on one clear takeaway: skills, not jobs, are the future currency in the AI-driven labour market.

McKinsey, UNCTAD and the IMF all emphasise the growing importance of:

• Digital fluency: Understanding AI tools, basic coding and data management.
• Analytical thinking: Critical problem-solving and data interpretation.
• Creativity and innovation: Crafting new ideas, products and user experiences.
• Interpersonal and emotional intelligence: Human-centred roles requiring empathy and communication.
• Adaptability and lifelong learning: Workers must continually reskill and embrace change.

Those in STEM fields and high-wage occupations will generally fare better as they’re more adaptable to AI and often the ones creating or managing it.

Policy imperatives and transition strategies

Without proactive and inclusive policies, AI could exacerbate economic inequalities and social unrest. The reports recommend:

• Investment in education and reskilling: Governments and companies must fund programmes to help workers transition.
• Regulatory frameworks: Policies must prioritise fair labour standards, data protection and equitable access to technology.
• Global cooperation: UNCTAD calls for a coordinated international response to avoid a digital divide between rich and poor countries.
• Focus on people-centric AI: Developers should prioritise augmentation over replacement and build AI to empower, not displace.

The next five years represent a critical window for managing the AI revolution.

Millions of jobs will be displaced or redefined but millions more will be created for those equipped with the right skills and support.

AI promises not just disruption but also economic expansion, efficiency gains and human-AI partnerships that could redefine work itself.

The future of employment will be determined not by whether AI replaces humans but by how well societies, institutions and individuals can adapt, upskill and redesign work to align with a world increasingly shaped by intelligent machines.