“Everyone is asking the question, is AI going to replace my job?” Nada Snoussi tells Investment Monitor. She says reading the news about mass layoffs at companies such as Microsoft, Meta, Dell, Klarna, and Google led her to ask how AI job disruption is affecting investment promotion agencies (IPAs). Snoussi wrote about this in a piece titled ‘When AI cuts jobs, is it still worth attracting?‘
One of IPAs’ primary goals is to create job opportunities for the places they represent through foreign investment projects. Now, at a time when global FDI [foreign direct investment] is at a record low, but AI investments have never been higher, Snoussi thinks IPAs have to tread carefully.
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A consultant at the FDI Center, Snoussi said: “Many IPAs define quality FDI by its ability to create jobs. That’s the case for most emerging countries, but also for developed countries. For these IPAs, this is a question that worries me more, because if we’re going to attract an AI company, are we going to attract them so that in the end, we achieve an opposite outcome to what we wanted to initially achieve?
“It’s not a yes or no, but it’s definitely a whole discussion that needs to be brought in.”
Targeting the right jobs in the AI age
Snoussi thinks it is important to remember that while AI will replace some jobs, it is also creating new ones. It does not mean that the IPAs will necessarily have a harder task; they will just have to be more agile to the needs of an evolving workforce.
“We have jobs that have been displaced when these are low-quality jobs, or jobs that are going to be easily automated. At the same time, it creates a new aspect of jobs that are linked to the core AI development such as jobs linked to machine learning, data centres, data analysis, engineering,” she outlines.
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By GlobalDataShe also suggests that as the world builds the AI supply chain and its critical infrastructure, jobs will be created along the way in areas such as data centres, education and energy.
Aside from jobs directly in the core AI industry and supply chain, there is also the question of how AI will be applied to other sectors, which include agriculture and healthcare.
Snoussi comments: “If we talk about agriculture, that’s anything linked to precision farming or crop management. Healthcare also, anything related to analysis of imagery, smart manufacturing.”
IPAs should look at which sector-specific AI companies would complement their local economy.
“An AI company that we see clear potential to partner with other sectors in our country that would add value. Or focus on attracting AI companies that are sector-focused—so agritech, health tech, smart manufacturing, and so on—from the start, so that we directly add value to the sectors we have,” she says.
Accommodating AI investors
Before IPAs make a concerted effort to attract AI, Snoussi says they should first ask: “Can we accommodate AI investors?” Two important factors for AI investors are an adequate energy supply and an AI-savvy workforce. Whether a location can provide both of these features will fundamentally shape an IPA’s value proposition.
IPAs could play an important role in advocating for the upskilling of their local workforce. Snoussi thinks that a partnership between different stakeholders that encourages “the creation of AI and upskilling programs with universities and research institutions”, for example, would strengthen an IPA’s pitch to investors.
AI project risks
If IPAs attract projects without taking these factors into consideration, they could inadvertently disrupt the local economy.
“I wouldn’t, for instance, attract AI companies that would automate things if a place has a huge business process operations (BPO) sector,” Snoussi outlines. The Philippines, for example, offers a lot of BPO services, such as call centres.
She said: “You’re not going to attract an AI company that offers automation of call centres that can do cold calls just using AI.”
At the same time, she notes that these automated services are usually offered by small companies which might not “have the potential to expand”. So, just because an AI replacement exists, it does not mean it is going to grow or replace an industry overnight.
“I think AI will replace some jobs that rely heavily on routine tasks, for instance, but it’s going to take time. Not all companies have the capabilities or the capacity today to directly automate all the processes, because AI automation is costly,” Snoussi outlines.
This is good news for IPAs, because it means they “still have time” to work on upskilling their workforce and creating a strategy.
In terms of integrating AI into an IPA’s operations, Snoussi thinks they should be wary of moving too quickly, as making a mistake could erode an organisation’s credibility.
“I see many people saying that AI can be used by IPAs easily. No need for specialised tools. We can just use ChatGPT, for instance, to write emails to answer our questions. But then, to what level can we rely on these responses? There’s a big risk of AI hallucinations,” she comments.
If an AI chatbot hallucinates, an occasion where it generates incorrect or factually inaccurate outputs, and an investor catches it, then it would damage that IPA’s credibility, Snoussi notes. Therefore, if IPAs want to integrate this technology, they need “an AI tool that is trained by IPA professionals to minimise the risk of hallucination”.
Given the speed of AI adoption in the workforce, there is no time to waste for IPAs.
“AI is coming. It’s not a choice. We have to deal with it,” she advises.
