Optimism Bias in the World Economic Forum’s Future of Jobs 2025 Report

Historical precedents remind us, that technological disruptions often generate pockets of acute job displacement, while real-world data from the IMF and World Bank highlight persistent and systemic barriers that can hinder job transitions and reskilling efforts.

Every year, the World Economic Forum (WEF) publishes its highly anticipated Future of Jobs report. These reports spark widespread discussion among policymakers, business leaders, and journalists, largely due to their sweeping predictions about job creation, job displacement, and the overall impact of technological advancements on employment. Although the WEF’s view that emerging technologies will lead to a net positive outcome for the global workforce is encouraging, it is essential to explore the underlying optimism bias that may shape such projections.

WEF’s forecasts may not fully account for the complexities of real-world labour markets – especially when juxtaposed with historical precedents and data from the International Monetary Fund (IMF) and the World Bank or even corporate sector forecasts. A recent Bloomberg report predicts that global banks will cut as many as 200,000 jobs in the next three to five years as artificial intelligence encroaches on tasks currently carried out by human workers. The number of new jobs to be created in this sector is anyone’s guess.

Job Creation vs. Job Displacement: A Fragile Balance

WEF Projections:

The WEF’s Future of Jobs 2025 report estimates a net increase of 78 million jobs globally by 2030. Within this figure, 170 million new roles are expected to emerge while around 92 million existing jobs will be lost due to automation and restructuring. At first glance, these numbers promise an era of vibrant opportunity, implying that innovative sectors will more than compensate for job losses.

Historical Context and IMF Insights:

However, historical patterns and recent warnings from the IMF suggest that the interplay between job creation and displacement may not be so seamless. The IMF, in its World Economic Outlook and various working papers, repeatedly underscores that workforce displacement caused by major technological shifts can trigger long-term unemployment among certain demographic groups. Workers who lack the ability – or the means – to transition smoothly into new roles often face considerable barriers, including:

• Geographic immobility – Not all growth industries are located where current job losses occur.
• Education and skill gaps – Retraining requires both time and resources, placing lower-skilled workers at a disadvantage.
• Sectoral inertia – Traditional sectors, such as coal mining or manual-intensive manufacturing, may struggle with or resist rapid transformations.

These factors can prolong unemployment or underemployment, complicating the WEF’s optimistic assumption that newly created jobs will automatically absorb those who are displaced.

Skills Transformation: More Complex Than Predicted

WEF’s Outlook:

The report emphasises that 39% of core skills required in the global workforce will be outdated or transformed by 2030, marking a slight reduction in earlier estimates. Coupled with this, the WEF posits that businesses and governments will aggressively invest in upskilling and reskilling programs to bridge the gaps created by technological evolution.

Real-World Constraints:

In practice, however, the World Bank’s World Development Report and global labour market analyses reveal a more sobering picture. Many businesses, especially small and medium-sized enterprises (SMEs), struggle with limited budgets and bandwidth for large-scale training programs. Additionally, socioeconomic disparities, limited internet access in certain regions, and a lack of standardised training curricula make the implementation of such programs uneven. Major hurdles include:

• Economic Volatility – Companies often cut non-essential spending during downturns, which can include workforce development initiatives.
• Unequal Access to Training – Populations in lower-income or rural areas may have limited access to training centres or online resources.
• R&D vs. Skills Budget – Larger enterprises may prioritise research and development over employee reskilling, particularly if the technology itself is seen as a more direct path to higher profit margins.

These realities suggest that while skills transformation is indeed possible, expecting nearly half of the global workforce to reskill by 2030 without substantial structural support may be overly optimistic.

Technological Adoption: The Pace Is Rarely Uniform

WEF’s Projections:

Central to the WEF’s view is that AI, automation, and digital transformation will become increasingly ubiquitous across all industries, catalysing innovation and job growth in areas such as data analysis, machine learning, and advanced manufacturing.

Uneven Adoption and Stakeholder Resistance:

Yet, technological adoption does not occur in a vacuum. Historically, industries have adopted new technologies at vastly different rates. Companies in highly regulated sectors – like healthcare or finance – often move more slowly due to stringent compliance requirements. Even in technology-forward sectors, labour unions and political stakeholders may resist full-scale automation that risks widespread job displacement.

The World Bank’s findings on digital infrastructure support this view. According to its assessments, high-income countries tend to be better positioned to implement advanced technologies, whereas lower-income regions struggle with inadequate networks, inconsistent electricity supply, and limited organisational readiness. This disparity exacerbates the gap in technology adoption, casting doubt on the WEF’s assumption that advanced tools will be equally accessible and rapidly integrated around the world.

Economic Volatility and Its Impact on Forecasts

WEF’s Optimism vs. IMF and World Bank Data:

While acknowledging economic challenges such as inflation and geopolitical tensions, the WEF’s forecasts maintain a generally hopeful tone about net job creation. By contrast, the IMF cautions that economic slowdowns – reflected in periodically downgraded global growth forecasts – can sharply reduce business willingness to invest in new hires or reskilling programs. For instance, if global GDP growth trends consistently downward, companies may prioritise cost-cutting measures over workforce expansion or technological upgrades.

Realities of Investment Cycles:

Economic downturns do not merely delay hiring; they can also disproportionately harm smaller players in emerging markets. According to World Bank data, SMEs account for roughly 50% of global employment, and these firms often struggle with slim margins that curtail their ability to invest in new technology or robust training initiatives. Thus, if an economic slump persists, the WEF’s optimistic job creation outlook may be significantly dampened.

Regional Disparities and Sectoral Downturns

The WEF’s Limited Regional Analysis:

The Future of Jobs 2025 report highlights certain high-growth roles, from technology specialists to frontline service jobs like delivery drivers. Yet it rarely addresses the stark disparities that can emerge between developed and developing regions, or between urban and rural economies.

A More Nuanced Lens:

• Regional Heterogeneity – The World Bank has repeatedly emphasised how different regions recover from recessions and adopt technology at different speeds. South Asia, Sub-Saharan Africa, and parts of Latin America, for example, exhibit very different economic structures and labour force participation rates than Europe or North America.
• Sectoral Vulnerabilities – Even in developed regions, industries such as automotive manufacturing, retail, and travel can experience deep downturns, sometimes leading to permanent job losses if consumer patterns shift.

When an economy experiences a downturn in a key sector – say tourism – new opportunities in other fields may not emerge quickly enough to offset job losses. Policymakers risk overestimating the net employment effect if they rely solely on broad averages rather than examining sector-by-sector data.

Tempering Optimism with Pragmatism The World Economic Forum’s Future of Jobs 2025 report serves as an important catalyst for conversations about the shifting nature of work in an era marked by rapid technological change. Nevertheless, an uncritical acceptance of its upbeat forecasts could mask critical challenges. Historical precedents remind us, that technological disruptions often generate pockets of acute job displacement, while real-world data from the IMF and World Bank highlight persistent and systemic barriers – such as socioeconomic disparities, uneven technology adoption, and economic volatility– that can hinder job transitions and reskilling efforts.