23 August 2018
Robot Chores
We are not ready for the Fourth Industrial Revolution.
by Frank O’Nomics
The potential impact of artificial intelligence on traditional employment is not a new subject. However, when the Chief Economist of the Bank of England, Andy Haldane, warns of “large swathes” of technologically unemployed, in the same week that the woeful shortfall of apprenticeships compared to government targets was reported, we should sit up and pay attention. Studies of 702 occupations in the US showed that 47% of the workforce was at risk from AI and, applying the same logic to the UK, some 35% of current jobs are perceived to be at risk. Mr. Haldane argues that the fourth industrial revolution could be more disruptive than the first three. A failure to do anything about this is likely to lead to increased inequality, a rise in social tension and large numbers of our population struggling to achieve a healthy standard of living. Is there anything that we can do, or do we just resign ourselves to becoming an increasingly idle nation?
In looking at the occupations at risk it is hard to see any that will go unscathed. Manufacturing is the obvious problem area, and the automation of production has a long history. China is in the process of creating the first “robot only” factory, which entails the loss of 1,600 jobs, and even the manufacturer of iphones is targeting a robot workforce of 30% by 2020. Much of this may be less relevant for the UK, where the economy has long since moved away from a heavy dependence on manufacturing. However, the shift in retail sales away from the high street, and even the delivery process potentially becoming automated (when would you like your drone to arrive?), is already having a pronounced impact on employment in the sector. The service industry, on which the UK is so dependent, is likely to be the next big target. Taxis are being forced out by Uber and the next shift will be towards driverless vehicles. We have already seen the start of robo financial advice, and much of the accountancy process could go the same way. Lawyers and barristers may be sidelined by technology; for instance, the Serious Fraud Office already uses AI to assess documents for relevant evidence. Even the healthcare industry could see greater changes as more are encouraged to use online diagnoses. The old adage of pushing your children down the doctor-lawyer-banker career path may finally be coming unstuck.
As ever with problems of this magnitude the solution lies in approaching the issue at its base. In this case that will mean providing more technical education, both at school and at the start of a career. A recent Oxford University study showed the probabilities of technology competing with current roles to be highly correlated with education. Computer Science may not be the only subject to help but it is a good start. However, sadly, while 53% of schools now offer a GCSE in computer science and 36% and A-level, only 12% of pupils take CS at GCSE and just 2.7% at A-level. The numbers are rising, but it is the more affluent pupils who are most likely to take these courses, and only small proportions are girls (20% at GCSE and 10% at A level). The question is then raised as to whether such subjects become a core part of the curriculum.
This brings us to the next stage that of training people for the developing range of employment opportunities in new technology based industries. Here is where the UK is really falling down. Apprenticeships should be a major area for the new skills to ensure employment in the modern age. We have written here before about the failure of the apprenticeship levy, in that it is not producing anything like the targeted number of apprentices and is largely just another tax on businesses which are frustrated by the lack of accredited schemes and the limitations of those that are available (most courses are too short to produce ther requisite skillls). Last week saw the release of the cold hard facts of the matter. Instead of the 68,000 new apprentices per month needed to hit the government’s target of 3 million by 2020, the average has been running at just 28,000.
So what kind of jobs will continue to flourish and what skills will need to be created? On the former, Andy Haldane talks of the importance of jobs that focus on human interaction, involving face to face conversation and negotiation, rather than manual jobs which all seem to be at risk. As for new skills, the Chair of the AI Council, Tabitha Goldstaub, has highlighted a need to ensure a workforce ready for change. New jobs will involve building new technology, and maintaining and collaborating with new technology. Without sufficient programmes to build these skills, unemployment and social tension is likely to rise. Nevertheless, the outlook may not be that bleak. PWC has estimated that 7 million jobs could be displaced by technology as soon as 2020, but also that 7.2 million new roles could be created. The key will be to develop a workforce to fill those roles. The outlook also remains rosy for economists – the lack of evidence to show that AI will replace this discipline suggests that economics may still be more of an art than a science.
