Central banks and policymakers are taking notice. Bank of England Governor Andrew Bailey has warned that countries must prepare for AI-driven job displacement and think carefully about how technology might affect the pipeline that allows workers to move into senior roles. Policymakers in the EU, US and across Asia-Pacific, including Australia, are increasingly focused on workforce transition, skills development and guardrails for AI deployment.
An early warning for careers, not just jobs
Rachel Fletcher, Morgan Stanley’s London-based head of EMEA sustainability research, described the bank’s findings as an “early warning sign” of AI’s impact on the labour market. The employment effects of AI have “come up in a lot of our recent investor conversations,” she said, reflecting a growing recognition that automation may reshape not only how many jobs exist, but who gets them and how careers progress.
Across the countries surveyed, employers said they were most likely to eliminate early-career positions requiring two to five years’ experience – roles that typically serve as stepping stones to more senior jobs. That pattern appears to be emerging globally, from the UK and Europe through to North America and parts of Asia-Pacific. If AI continues to erode these entry and mid-level opportunities, it could make it harder for younger and less experienced workers to gain a foothold, even in economies where overall employment remains relatively strong.
For countries like Australia, this underscores the importance of pairing AI investment with skills and workforce strategies. High revenue confidence and structured AI policies may provide a buffer against the most immediate shocks, but without sufficient, well-directed investment in AI capabilities and training, local workers risk watching higher-value roles and opportunities flow to markets moving faster.
A shared challenge with local twists
AI is already delivering meaningful productivity gains. Companies in Morgan Stanley’s study reported average improvements of around 11.5% following AI adoption. In several markets – particularly the US – those gains are being reinvested into new AI-related roles in areas such as machine learning, data analysis, product development and AI governance.