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UK labour costs are cheap but automation will erode jobs market

PwC has estimated that millions of people may be affected by robots and artificial intelligence replacing their jobs

The UK Economic Outlook report from PwC has called on the government to reshape education and vocational training to help workers adapt to the rapidly evolving technological world, brought on by automation.

Its latest analysis has estimated that 30% of UK jobs could be at high risk of automation by the early 2030s. This number is lower than in the US or Germany, but higher than in Japan.

People with GCSE-level education or lower are far more at risk of their job being automated, according to PwC. As many as 46% of those with GCSE or lower education could be at risk, but only about 12% of those with undergraduate degrees or higher face such a threat, PwC reported.

The wholesale and retail trade sectors are likely to feel the biggest impact of automation, according to PwC, which estimated that almost 2.3 million jobs in those sectors could be at high risk of automation.

Given that the wholesale and retail trades represent the largest single sector in terms of numbers of employees, PwC warned that 22% of all UK jobs were at high risk of automation.

In manufacturing, PwC’s figures show that 46% of jobs are potentially at high risk of automation – about 1.2 million people.

A further 700,000 jobs could be at high risk of automation in human health and social work, but this represents only about 17% of all jobs in that sector, PwC said.

But it also predicted that automation technologies in areas such as artificial intelligence (AI) and robotics would create some new jobs in the digital technology area.

Productivity gains achieved by greater automation and robotics could generate additional wealth and spending that would support more jobs, mainly in the services sectors, which are less easy to automate, according to PwC.

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The combination of AI, robotics and other digital technologies are already producing innovations such as driverless cars and trucks, and intelligent virtual assistants.

PwC recommended that, given the pace of change, retraining and career shifts may be needed more frequently during what are likely to be longer average working lives. It also suggested that the government may need to consider universal basic income schemes within the next decade or two.

PwC noted that a relatively flexible UK labour market, which has been open to migration from the EU, has made it cheaper for employers to add more staff that buy in technology. Some organisations may also be risk averse to trying new, unproven automation technologies, particularly given the relatively low cost of hiring new people, it said.

“Over time, however, we would expect these economic factors to become less significant as the cost of the new digital technologies falls (quite possibly very rapidly if a robotic version of Moore’s Law turns out to apply) and they become more widely adopted, leading them to seem less risky and untested by companies that were not early adopters,” the report said.

PwC pointed out that organisational inertia and legacy systems may push back the timing of any shifts towards automation, even if they become technically and economically feasible.

Read more on Artificial intelligence, automation and robotics