AI’s swift integration into industries across the UK could put millions of jobs at risk, according to new research from the Institute for the Future of Work (IFOW).
A recent report published on 27 January calls for immediate government action to address up to 8 million workers potentially impacted for small businesses and their employees, and the growing risks of inequality and instability due to AI.
Workforce Disruption on the Horizon
AI’s ability to automate up to 60% of job tasks threatens to displace part-time, entry-level, and back-office roles, with sectors like customer service and administrative work most at risk.
Carsten Jung, senior economist at the Institute for Public Policy Research (IPPR), warned that
“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.”
A recent survey of 5,000 employees revealed widespread anxiety over job security, as many large companies begin to reskill their workforce while smaller businesses struggle to keep pace.
The Potential and Challenges of Automation
AI’s potential to add £306 billion annually to the UK economy could bring productivity gains, higher wages, and new opportunities, provided it is implemented thoughtfully.
The benefits could be eclipsed by economic divides and job displacement without targeted policies. Women and young workers, who dominate sectors vulnerable to automation, are highlighted as especially vulnerable.
The report concludes that government intervention will be crucial in determining whether AI will drive inclusive growth or amplify inequality.
Expert Opinions Call for Immediate Action
Christopher Pissarides, Nobel laureate in economics and lead author of the report, emphasised the need for a balance between productivity and workforce wellbeing.
He asked, “How can AI bring productivity and prosperity, without putting people under more intense stress and pressure? How can it help us identify and deliver new opportunities, without exacerbating growing divides across the country?”
James Hayton, professor of innovation at Warwick Business School, highlighted the crucial role of managerial decisions, stating,
“It is how firms and managers choose to implement it that is so crucial in bringing benefit to their workforce and overall productivity.”
The report also called attention to regional disparities, suggesting the creation of science hubs outside London to help decentralise high-paying jobs and prevent the Oxford-Cambridge corridor from dominating AI and biotechnology advancements.
Government’s Critical Role in Shaping the Future
The IFOW report outlines key policy recommendations to manage the impact of automation, advocating for fiscal incentives to encourage job augmentation over replacement, as well as investment in green jobs less susceptible to automation.
The report also stresses the need for worker upskilling through education and training. It further calls on trade unions to play a stronger role by providing digital access, collective rights to information, and new e-learning positions to ensure fair distribution of automation’s gains.
“If they don’t act soon, it may be too late,” Jung warned, pointing to the limited time for decisive action.
According to IPPR projections, without intervention, up to 8 million jobs could be lost.
The Way Forward
Experts acknowledge the significant risks posed by AI, yet they also see a distinct opportunity for the government to use the technology as a driver for inclusive growth.
Pissarides framed the issue, saying, “AI can open new opportunities without widening existing divides.”