How Automation and Artificial Intelligence Will Change Employment in the Public Sector

Automation and artificial intelligence (AI) have introduced new challenges for governments, including developing a workforce with the right profiles and skills to adapt to the transformation that jobs in various sectors will undergo in the future.

According to a study conducted by CAF, entitled “Potential Impact of the Use of Artificial Intelligence on Public Employment in Latin America,” although certain occupational tasks may be automated (implying a displacement of human labor, an effect of automation), there are other tasks for which technology could—instead of replace—complement or enhance human work and increase productivity.

Emerging technologies and, in particular, artificial intelligence (AI), have become the driving force of economic transformation in multiple sectors and industries. They also have high disruptive potential to transform public administrations in the digital age, improving public policy creation, delivery of services to citizens and internal administration efficiency.

The positive effects of automation and artificial intelligence on employment may be even greater than the negative effects of human labor displacement. For example, studies on the relationship between automation, productivity and employment in eighteen countries during the period 1970-2007 concluded that technological progress increases aggregate employment, since employment reduction in automated industries (direct effect) are offset by increases in employment in other related consumer industries and by the rise in aggregate demand in the economy (indirect effect).

However, public administrations face the challenge of developing comprehensive strategies for the training of digital talent, covering all levels of organizations, with specific strategies for segments such as management teams, specialized areas (information and communications technologies, data science, public innovation) and areas directly linked to an organization’s mission.

“The world’s leading companies in technology adoption, including AI, are implementing strategies to ensure that their current and future workforce has the knowledge and skills needed in the new environment, and is prepared to take advantage of new technologies through four strategic approaches: training programs, systems for assessing skills in the workforce, creation of cross-functional teams to drive AI adoption, and creation of new roles and employee empowerment initiatives to bring about cultural change,” says Guillermo Cruz Alemán, author of the study.

The AI/4IR skills development strategies recommended in the CAF report are classified according to three approaches and different public servant profiles: i) retraining aimed at employees whose tasks may be replaced by automation or AI; ii) upskilling for AI or IT specialists, non-specialist users, managers and other workers in the organizations, using personalized content according to their respective profiles; and (iii) recruiting new employees with the hard and soft skills required by governments.

“AI has high disruptive potential to reset public administrations in the digital age. At CAF, we promote digital modernization for more agile, open and innovative governments, which rely on new technologies and data intelligence. We also look to improve administration efficiency and quality of citizen services,” says Antonio Silveira, CAF’s Physical Infrastructure and Digital Transformation Manager.

In recent years, governments and companies around the world have become aware of the disruptive potential of 4IR technologies and especially AI. These technologies are increasingly being implemented to increase efficiency and productivity, as well as to improve business knowledge and to design and implement better user services.

CAF has expressed its commitment to become the Green Bank of Latin America, an ally of governments and the private sector so that development goals in all Latin American countries are achieved.