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AI adoption could disrupt 8 million UK jobs, finds new analysis

Written by Mon 1 Apr 2024

The Institute for Public Policy Research (IPPR) has found that 8 million UK jobs could be at risk from artificial intelligence (AI) unless the Government intervenes.

In ‘the first of its kind analysis’, the IPPR said the impact of generative AI could be significant and presents a crucial decision point. 

If generative AI technologies are not regulated or managed appropriately, they could lead to widespread displacement and disruption of jobs in various sectors of the UK economy. 

“It is crucial that all workers benefit from these technological advancements, and not just the big tech corporations,” said Bhargav Srinivasa Desikan, Senior Research Fellow at the IPPR.

However, if the Government implements effective policies to harness the potential of generative AI while mitigating its negative impacts, there could be substantial economic growth and productivity gains, potentially leading to increased GDP.

Women and Young People Most Affected

The IPPR identified two stages of generative AI adoption: the “here and now” wave, and the subsequent stage where companies will deeply integrate existing AI technologies into their processes.

An IPPR analysis of 22,000 tasks in the UK economy revealed that 11% of tasks performed by workers are already exposed to generative AI in the initial phase. This primarily affects ‘routine cognitive’ tasks like database management, and ‘organisational and strategic’ tasks like scheduling or inventory management.

The analysis suggested that in the next phase, AI could be involved in 59% of tasks, impacting non-routine cognitive tasks like database creation and maintenance. This expansion of AI’s role would also affect higher-earning jobs.

During the initial wave, back-office, entry-level, and part-time jobs like secretarial, customer service, and administrative roles are at the highest risk of disruption.

Worst and Best Case Scenario of AI Modelled

The IPPR modelled three illustrative scenarios for the potential impact of the second wave of AI adoption on the labour market, contingent on policy choices.

In the worst-case scenario of full displacement, all UK jobs at risk are replaced by AI, resulting in 7.9 million job losses and no GDP gains.

In the central scenario, 4.4 million jobs disappear, but there are economic gains of 6.3% of GDP (£144 billion per year). 

The best-case scenario, full augmentation, entails adapting all at-risk jobs to AI instead of replacing them, resulting in no job losses and an economic boost of 13% to GDP (£306 billion per year).

The IPPR also modelled three scenarios for the potential impact of ‘here and now’ generative AI on the labour market. In the worst-case scenario of full displacement, 1.5 million jobs are lost, with no GDP gains. 

The central scenario sees 545,000 jobs lost, accompanied by GDP gains of 3.1% or (£64 billion per year). In the best-case scenario of full augmentation, no jobs are lost, and GDP gains amount to 4% (£92 billion per year).

Wage gains for workers could vary significantly, ranging from more than 30% in some cases to none at all. Deployment of AI could also free up labour to address unmet social needs, like reallocating workers to social care and mental health services currently under-resourced.

The IPPR said the modelling demonstrated there is no single predetermined path for how AI implementation will unfold in the labour market. It thinktank underscored the need for intervention to ensure that economic gains are distributed widely rather than accruing to only a few.

Worst Case Scenario a Possibility

Without Government action and with companies left to their own devices the IPPR said the worst-case scenario is a real possibility.

“Government, employers, and unions have the opportunity to make crucial design decisions now that ensure we manage this new technology well. If they do not act soon, it may be too late,” said Carsten Jung, Senior Economist at the IPPR.

To mitigate this risk, the IPPR recommended that the Government develop a job-centric industrial strategy for AI. This strategy should focus on encouraging job transitions and ensuring that the benefits of automation are shared across the economy. 

Key elements of this strategy include supporting green jobs, as they are less susceptible to automation compared to non-green jobs; implementing fiscal policy measures, to promote job augmentation rather than full displacement; and enacting regulatory changes to ensure human accountability in critical areas, like healthcare.

In September, the Trades Union Congress (TUC) launched a new AI task force to safeguard workers’ rights and draft new legal protections for fair AI regulation at work.

The TUC made an urgent call for new legislation after workers and employers cried out for certainty over how AI should be used in the workplace.

In May, a poll carried out by YouGov found that 62% of working Britons believe robotics and AI would take over more jobs than they create. Only 8% of the 1,169 people surveyed think more jobs will be created than lost, while 14% said it would stay around the same.

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Written by Mon 1 Apr 2024

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