UK risks unemployment rise unless people are reskilled for AI

Up to 30% of UK jobs could be impacted by automation by the early 2030s, but a new report from PwC suggests the country’s economy could grow by 10% in that time.

The results, which draw on Organisation for Economic Co-operation and Development (OECD) forecasts, paints a more optimistic picture for the UK compared to a study from the Economist Intelligence Unit (EIU), commissioned by Google, which suggested that the UK’s GDP would decline.

PwC’s research found that the first age of artificial intelligence (AI) – the algorithm wave – is already under way. This involves automating structured data analysis and simple digital tasks, such as credit scoring.

Euan Cameron, UK artificial intelligence leader at PwC, said: “Our research shows that the impact from automation and AI will be felt in waves, with more routine and data tasks hit first. But just because businesses and people aren’t feeling the impacts right now, there is no excuse for not starting to plan for the future.”

Although only a relatively small proportion of jobs in the UK – 2-3% – are likely to be affected during this time, PwC’s forecast suggests that up to 8% of job roles in the financial, professional and technical services, and information and communications sectors are likely to be affected.

In PwC’s analysis, the next wave, dubbed the “augmentation wave”, is focused on automation of repeatable tasks and exchanging information, including application areas such as aerial drones, robots in warehouses and semi-autonomous vehicles.

PwC forecast that up to 20% of such tasks could be shared by augmented AI systems by the end of the 2020s, as the use of AI systems becomes much more widespread and robotics technologies advance and mature. Over this period, the effects will be felt across all industry sectors, although financial services is still expected to be the sector most impacted, said PwC.

The third phase, which PwC expected to happen in the mid-2030s, involves the use of fully autonomous AI systems. PwC predicted that AI will be able to analyse data from multiple sources, make decisions and take physical actions with little or no human input. The share of jobs that could be affected by automation is estimated to rise to 30% by the mid-2030s, as autonomous robots and driverless vehicles roll out more widely across the economy.

According to PwC’s research, based on a study of 200,000 jobs in 29 geographies, manual tasks will increasingly be automated, pushing sectors including transport, manufacturing and retail to the top of the likely automation list.

Unlike the EIU’s new report looking at the impact of AI on GDP in the UK, John Hawksworth, chief economist at PwC, said he did not believe there would be mass unemployment caused by jobs being automated. “We don’t believe that automation will lead to mass technological unemployment by the 2030s, any more than it has done in the decades since the digital revolution began,” he said.

While the EIU forecast a worst-case scenario, in which policy-makers do little to support AI initiatives, resulting in the UK’s productivity dropping, Hawksworth said: “In the long run, AI, robotics and related technologies should not only make a significant contribution to UK GDP of up to 10%, but should also generate enough new jobs to broadly offset the potential job losses associated with automation.”

PwC predicted that the main contributor to the UK’s economic gains between 2017 and 2030 will come from consumer product enhancements stimulating consumer demand (8.4%). It also said AI would drive a greater choice of products, with increased personalisation, and make those products more affordable over time.

According to PwC’s research, labour productivity improvements will also drive GDP gains as firms seek to “augment” the productivity of their labour force with AI technologies and to automate some tasks and roles.

For the UK to benefit from AI, said PwC, “we need to be even more innovative in the way we develop technology skills”.

The OECD’s 2016 report, Building skills for all: a review of England found that nine million adults in England have weak literacy or numeracy skills, and that young adults are no better than older people when their numeracy and literacy skills are assessed. “Other things being equal (including, notably, migration), this means that with the passage of time, the basic skills of the English labour force could fall further behind those of other countries,” the OECD said. “This is a major challenge.”