are able to adapt to automation. For example, countries with growing working-age cohorts are likely to experience more employment COULD 2040 BE JOBLESS? dislocations or downward pressure on wages than countries with older populations at com- The breadth and speed at which AI could replace current parable levels of automation. jobs raises questions as to whether economies will have the capacity to generate sufficient new jobs and whether workers Automation may a昀昀ect a growing share of the workforce. During the past two decades, it has will have the requisite skills for the new jobs created. replaced mostly middle-skill job professions, During the next few decades, AI appears likely to follow the such as machine operators, metal workers, trend of previous waves of innovation, resulting in net job cre- and o昀케ce clerks. Automation may increasingly ation over time, but it may lead initially to an overall decline if a昀昀ect more high-income professions, such jobs disappear faster than new ones are created. as doctors, lawyers, engineers, and university faculty. Although new jobs will emerge, there Alternatively, some economists question whether AI could is likely to be a skills mismatch between jobs lead to more continuous disruption to labor markets, as lost and jobs created. This mismatch could machines rapidly gain in sophistication, resulting in more lengthen the period of unemployment for persistent job losses. many workers as they attempt to gain the skills required for newly created jobs, and it could further skew the distribution of gains. More youthful economies might be more agile if they are able to provide the education rules are inadequate for new types of 昀氀ows, needed to properly train new entrants into including e-commerce and other services. the workforce. However, barriers to trade in global services, such as data localization rules, and the contin- MORE FRAGMENTED TRADING ENVIRONMENT ued desire to protect domestic agriculture are The global trading system is likely to become likely to make future agreements to update even more fragmented during the next two the WTO even more di昀케cult. decades. Since the creation of the World As WTO rules become increasingly antiquat- Trade Organization (WTO) in 1995, little or ed, future regional agreements are likely to no progress has been made toward addi- establish new rules and standards, especially tional global trade agreements. Regional and for new types of commercial transactions, bilateral trade agreements have proliferated, resulting in further fragmentation of global further fragmenting the global trading envi- trade rules. There has been a large increase ronment. Only a single multilateral agreement, in the number of bilateral and regional trade the Trade Facilitation Agreement, has been arrangements since the formation of the WTO, completed since the WTO’s inception. Progress and more limited progress in sector-speci昀椀c has been limited by fundamental di昀昀erences agreements. Some of these agreements not over agricultural trade and related subsidies only cover tari昀昀s and market access but also and protection of intellectual property rights establish rules and standards in areas not cov- among member countries as well as by a wid- ered by the WTO or other global multilateral ening divide between developed and develop- agreements, such as the digital trade rules in ing countries. Lacking updates, current trade A MORE CONTESTED WORLD 47