ING study tempers expectations about AI in Belgium

The economists at ING Belgium do not expect a major increase in unemployment in Belgium as a result of the rise of artificial intelligence (AI). The impact on productivity and economic growth will not be greater than that of the invention of the PC and the Internet, ING predicts.

The ING study (pdf) is based on various sources of information, including ING’s consumer research. According to that survey, 42 percent of Belgians believe that AI will lead to job losses. At the same time, few Belgians worry about their own jobs.

Exposure to AI

“We estimate that 65 percent of Belgian employees, approximately 3.3 million people, work in a job with high exposure to AI,” the study said. “That means they will experience the impact of AI and that AI will fundamentally change the way they work.”

However, ING does not expect a major increase in unemployment in Belgium. It refers to the labor shortage and the aging population.

Economic growth and productivity

Belgians are optimistic about the impact of AI on economic growth: almost one in three expects a positive impact on Belgian economic growth in the next five years.

This implies that AI will lead to an increase in productivity, but ING is also tempering expectations here. “Despite the rise of AI and other technological developments, as well as studies showing a positive impact of AI on the productivity of certain employees in certain companies, productivity growth in Belgium has been weak in recent years,” says the study’s author, Charlotte de Montpellier, senior economist at ING.

“That does not mean that AI will not lead to a positive boost in productivity at a macroeconomic level, but that we will have to wait a few more years before productivity growth will really become noticeable in Belgium.”

Comparable to PC and internet

ING estimates that annual productivity gains from AI alone at a global level could ultimately reach up to 1 percentage point, an impact equivalent to that of the invention of the PC and the Internet.

De Montpellier: “That does not mean that productivity growth will actually increase by almost 1 percentage point additionally per year. While AI could be the source of productivity gains, other factors, especially the aging population and diminishing productivity gains from previous innovations, will have the opposite effect and depress productivity growth. Overall, we predict an increase in annual productivity growth, and thus the potential growth of the economy, in the order of 0.1 to 0.5 percentage points in the coming years.”

“Belgium, like the rest of Europe, will likely be at the lower end of this range, while the United States will see greater productivity gains. The difference can be explained by the size of the sector that produces AI, the investments that have already been made in the technology, but also the stricter regulations in Europe.”

Find the full ING study here

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