Artificial intelligence (AI) adoption in the labor market poses a significant risk to millions of jobs in the UK, according to a report by the Institute for Public Policy Research (IPPR). The think tank warns that if not effectively managed, AI could result in the loss of 8 million jobs without any GDP gain. However, the impact on the labor market will largely depend on how AI is implemented and regulated.
The IPPR analysis identifies generative AI as a “game changer” that could disrupt the labor market. Back office jobs, customer service roles, secretarial positions, and administrative jobs are at the highest risk of disruption during the first wave of AI adoption. The first wave is already underway, with 11 percent of tasks, such as database and inventory management, being exposed to AI technologies. The second wave, which involves further integration of AI technologies, could increase the percentage of affected tasks to 59 percent, targeting higher-earning jobs. Women and younger people applying for entry-level positions are likely to be the most affected.
The report presents both worst-case and best-case scenarios. In the worst-case scenario, the existing adoption of AI in the workplace could lead to the loss of 1.5 million jobs, while the second wave could result in the displacement of 7.9 million jobs. However, in the best-case scenario, jobs are not lost but augmented, and the economy could benefit from up to £306 billion per year.
To avoid the worst-case scenarios, the IPPR calls on the government and businesses to take action. A job-centric industrial strategy is necessary to ensure that workers across all sectors and levels benefit proportionately from AI implementation. The think tank emphasizes that technology is not destiny and a jobs apocalypse is not inevitable. Government, employers, and unions have the opportunity to make crucial design decisions to manage this new technology effectively.
The UK government has responded to last year’s white paper consultation on AI regulation by adopting a principles-based, non-statutory, and cross-sector framework. Unlike the EU’s more protective approach to tech regulation, the UK’s approach is more sector-based and self-regulatory. However, the government acknowledges that AI technologies will ultimately require legislative action.
The UK AI market is expected to grow to over $1 trillion by 2035, unlocking new skills and jobs. The IPPR analysis suggests that the government should focus on supporting green jobs and offering tax incentives to ensure jobs are not fully displaced. Additionally, AI adoption in education could help reduce teacher workload by automating simple marking processes and delivering feedback. However, effective human supervision is crucial to ensure responsible use of AI in education.
The Competition and Market Authority (CMA) has also published guiding principles for AI use following a review of its impact on consumers and market competition. The regulator calls for accountability from developers and businesses using AI technologies and transparency for consumers. It emphasizes the importance of informing customers and businesses about the risks and limitations of AI-generated content.
In conclusion, the adoption of AI in the labor market presents both opportunities and risks. While it has the potential to boost productivity and create new jobs, it also poses a significant threat to existing jobs. Effective management and regulation are crucial to ensure that workers are not left behind and that the economy benefits from AI implementation. The government, employers, and unions must collaborate to develop a strategy that adapts the labor market to the 21st century. With the right approach, the UK can navigate this technological transition without a jobs apocalypse.
