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Artificial intelligenceLatest NewsJob creation and lossesLabour market

UK government ‘must act now’ on AI, says think tank

by Jo Faragher 27 Mar 2024
by Jo Faragher 27 Mar 2024 AI could provide a bright future for the economy if embraced in the right way, says IPPR
Shutterstock
AI could provide a bright future for the economy if embraced in the right way, says IPPR
Shutterstock

Artificial intelligence could lead to substantial wage and productivity gains – but only if the government acts now, according to the Institute for Public Policy Research (IPPR).

The think tank argues that the UK is in a “sliding doors” moment where government policy will determine whether AI causes huge disruption to the jobs market, or a “job apocalypse”.

On the back of the International Monetary Fund’s recent analysis that AI will impact almost 40% of jobs globally, the IPPR has looked at 22,000 tasks that are carried across the UK economy, and whether AI is likely to automate them.

Currently, it estimates that 11% of these tasks are already exposed to the “first wave” of AI adoption – namely routine cognitive tasks such as database management and more organisational or strategic tasks such as scheduling or inventory management.

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In a second wave, this could increase with AI doing 59% of tasks, and moving into more non-routine tasks such as creating and maintaining databases, which would in turn impact higher-earning jobs.

IPPR’s analysis suggests there could be three scenarios for the potential impact of AI on the job market.

In a worst-case scenario, all jobs are at risk of displacement, creating 7.9 million job losses and no gains for gross domestic product (GDP). A mid-level scenario would see job losses of more than 800,000, but gains of £260 billion each year.

In the best-case scenario, all jobs adapt and augment alongside AI, meaning there are no job losses and an economic boost of 13% to GDP.

However, avoiding the worst-case scenario and maximising the possibilities of reaching the best-case scenario rely on the government developing a “job-centric industrial strategy”, the IPPR claims.

Furthermore, AI could be deployed to address social needs such as more efficient use of workers in social care and mental health services because back-office tasks are automated, it says.

Carsten Jung, senior economist at IPPR, said: “Already existing generative AI could lead to big labour market disruption or it could hugely boost economic growth, either way it is set to be a game changer for millions of us.

“Many firms are already investing in it, and it has the potential to speed up many more tasks as more businesses adopt it.

“Over the next five years it could transform knowledge work. The question now is less whether AI can be useful, but rather how fast and in what manner employers will use it.

“History shows that technological transition can be a boon if well managed, or can end in disruption if left to unfold without controls. Indeed, some occupations could be hard hit by generative AI, starting with back office jobs.

“But technology isn’t destiny and a jobs apocalypse is not inevitable – government, employers and unions have the opportunity to make crucial design decisions now that ensure we manage this new technology well. If they don’t act soon, it may be too late.”

Bhargav Srinivasa Desikan, senior research fellow at IPPR, said roles such as copywriters, graphic designers and personal assistants could be “heavily affected”.

“The question is how we can steer technological change in a way that allows for novel job opportunities, increased productivity, and economic benefits for all,” he said.

The Institute of Directors has also called upon the UK government to clarify its strategy on AI and how it is regulated, warning that the economy could be “left behind” if the UK drags its heels.

Matt Monette, UK&I country lead at payroll company Deel, said companies were willing to pay “big salaries” for the skills they need to harness the benefits of AI.

“Right now, we’re at a crossroads waiting to see which path AI takes us down. But we can act now to ensure AI tech supplements and augments our current work,” he said.

“For employees, this means taking the time to work with your employer to ensure you’re upskilling in the right places. And for companies looking to close skills gaps, it’ll be important to broaden hiring pools and consider hiring from abroad – including from those talent pools we’re currently seeing impacted by layoffs.”

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Jo Faragher

Jo Faragher has been an employment and business journalist for 20 years. She regularly contributes to Personnel Today and writes features for a number of national business and membership magazines. Jo is also the author of 'Good Work, Great Technology', published in 2022 by Clink Street Publishing, charting the relationship between effective workplace technology and productive and happy employees. She won the Willis Towers Watson HR journalist of the year award in 2015 and has been highly commended twice.

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