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The Impact of AI on UK Jobs
The chart shows the estimated impact of Artificial Intelligence (AI) on job creation in the UK is an average of 18.9% and job displacement to be an average of 20.5%, with an average net effect of -1.77%. The health and social work sector has the most positive outlook, with jobs created estimated to be nearly 1 million. This represents approximately 20% of existing jobs in the sector (in 2017). The manufacturing industry is projected to experience the greatest reduction, potentially shrinking by a quarter - a loss of almost 700,000 jobs. The wholesale and retail sector sees the most movement, with significantly high levels of both job creation and displacement, 26% and 28% respectively. Education appears least affected with job creation and displacement at 12% and 5% respectively.
What does the chart show?
The chart shows estimates of AI’s impact on job creation and displacement in the UK by 2037. The forecasts are not estimates of total UK employment, but rather the potential impact of AI as one factor. The red bars indicate the percentage of jobs lost to AI and the blue bars signify the percentage of jobs created by AI. The projections are for 2037. The green line displays the net effect of AI on jobs as a percentage. The data originates from PWC’s UK Economic Outlook, published in July 2018.
Why is the chart interesting?
Recent advances in artificial intelligence have been incorporating cognitive skills that show potential to supersede human ability. Although the potential is vast, there will be attendant job insecurity in many industries, with many of those laid off lacking the necessary skills to benefit from the jobs AI creates.
The health and social work industry is projected to experience the highest net job gains, and, separately, is anticipated to grow overall as a result of an aging population. While routine imaging and diagnosis may be automated, patients will continue to require and value the “human touch”. The same applies to the personal interaction required in education, a sector where technology for the replacement of many functions undertaken by educators has existed for many years. For creative subjects such as arts and music, AI capability remains lacking. In the professional, scientific and technical sector, the chart shows that jobs created could be double the number of jobs displaced. These jobs would likely be due to the burgeoning need for AI itself, and involve the operation and design AI technology for a variety of sectors.
The industries that can expect significant net job losses are those with routine and repetitive tasks, as seen in the projection for the manufacturing as well as the transportation and storage sectors. Regarding the latter, the potential of driverless cars and automated warehouses is evident today and indeed already cutting the number of humans required in the industry. Similarly, in manufacturing, the use of algorithms and robotics is already making many routine factory tasks redundant. Fields such as cyber security and drone design can create jobs in the public administration and defence sector, but is offset in employment terms by the the automation of clerical roles.
AI not only impacts individual employment, but also has many policy implications. The government published the “AI Sector Deal” in April earlier this year, which combines an array of policies in order to negate the displacement effect. The government could invest more in the promotion of STEM (science, technology, engineering and mathematics) skills among workers and students alike in order to create a more appropriately skilled workforce. However, those who are unable to adapt to this changing dynamic, may find themselves short-changed while many experience both increased wealth and leisure time. The report from which this data is drawn posits Universal Basic Income as a method by which the incomes of those who have lost out due to a lack of skills can be stabilised. Furthermore, investing in sectors where job creation and business growth has high potential, such as in university research centres and science parks could prove beneficial in supporting digital start-ups, expanding their digital infrastructure and stimulating competition in line with the government’s industrial strategy.
Please join us at our next event :
Annual 'Your Property: Boom or Bust?' Event
23rd October 2018
Click Here to Book
Kindly supported by Deloitte Real Estate, the Economic Research Council are hosting a sixth discussion to debate the future of housing and house prices, and what we can expect to happen to the UK's property market in the future.
Last year we examined the Build-to-Rent sector, but this year’s event will return to a consumer focus- what will happen to the value of your home? Will you ever be able to afford a home? Which areas are booming?
This year's event will once again feature expert speakers who shall each offer a different perspective on the property market. More will be announced soon but the below are confirmed:
Camilla Dell is Managing Partner and founder of Black Brick Property Solutions LLP. Camilla has worked in the London property market since 2002. She is highly experienced in meeting the needs of demanding domestic and international property buyers. During her career to date, Camilla worked for two of London’s largest and most successful estate agencies, Foxtons and Knight Frank, before setting up Black Brick in January 2007. Since then, Camilla has grown the firm from a two person start-up to London’s largest independent buying consultancy. The Black Brick team collectively boasts over 80 years’ experience in the London property market and has successfully sourced and acquired nearly £1 billion of residential property for private clients. Camilla’s professional, energetic and tenacious approach to property finding, her total dedication to her clients’ needs and her expert negotiation skills have won her huge loyalty and trust amongst her clients who include some of the world’s most successful businessmen and entrepreneurs. Black Brick has a high profile in the residential property sector and Camilla is frequently asked to comment in the press and speak at large international events about the London and UK property market including the Bloomberg Markets Most Influential Summit 2015. Camilla was also recently voted in the Telegraph’s Property Power List as one of the top 25 most influential people in British property and was included in the Spears 500 in both 2015 and 2016, an essential guide for high net worth clients.
Marcus Dixon is Head of Research at LonRes, the property data system. LonRes has redefined estate agency and professional valuation in central London. Over 2,500 subscribers log on to the LonRes system each day to take advantage of commission sharing opportunities, access unique, real-time data on London’s sales and lettings markets and benefit from the most comprehensive archive of London properties in the market. LonRes is more than data; it’s a community where property professionals come together to share information and discuss the critical issues impacting their sector today. LonRes’ two co-founding directors draw on over 60 years of combined experience working in London’s real estate market.
Chris Baldwin, Partner, Corporate Finance Real Estate, Deloitte
Chris is a Partner within the Corporate Finance Real Estate team with over 20 years of residential property experience. He leads the House Builder and Residential sector within Deloitte and has responsibility for managing the Residential Valuation Advisory Group. He has worked with a range of private and public sector clients across the UK and has considerable experience in dealing with House Builders, Local Authorities, Registered Providers and Student Housing Developers and Investors.
Michael Mackenzie
Markets Editor, Financial Times
21st November 2018
Michael Mackenzie has been markets editor of the Financial Times since January 2015. He was formerly US markets editor and joined the FT's New York office in 2006. He covered US bond and derivatives markets for Dow Jones from 2000. His talk will be focussed on asset prices, flows and investor behaviour and sentiment.
Royal Overseas League, St James’s Street, SW1A 1LR. 6.30pm – 8pm.
Non-members can book Early Bird tickets here for £15 (£10 for students). Members can reserve their free place by emailing us on info@ercouncil.org .
For more information on these and other events visit the ERC website: www.ercouncil.org
If you're interested in becoming a member of the ERC, please click here
To contact the Economic Research Council:
info@ercouncil.org
Economic Research Council, 5 Albany Courtyard, London, W1J 0HF
Tel: 020 3793 7159
