AI Could Displace Millions of UK Jobs, But Long-Term Impact May Be 'Relatively Modest'

AI may displace 3m jobs but long-term losses 'relatively modest', says thinktank

Rise in unemployment in low hundreds of thousands as technology creates roles, Tony Blair Institute suggests Artificial intelligence could displace between 1m and 3m private sector jobs in the UK, though the ultimate rise in unemployment will be in the low hundreds of thousands as growth in the technology also creates new roles, according to Tony Blair's thinktank. Between 60,000 and 275,000 jobs will be displaced every year over a couple of decades at the peak of the disruption, estimates from the Tony Blair Institute (TBI) suggest. It described the figure as "relatively modest" given the average number of job losses in the UK has run at about 450,000 a year over the past decade. More than 33 million people are employed in the UK. AI, a technology that can be loosely defined as computer systems performing tasks that typically require human intelligence, has shot up the political agenda after the emergence of the ChatGPT chatbot and other breakthroughs in the field. TBI added that it did not expect the scale of the displacement to be reflected in long-term job losses. It predicted total losses to be in the low hundreds of thousands at its peak at the end of the next decade as AI creates new demand for workers and pulls them back into the economy. "Our best guess is that AI's peak, impact on unemployment is likely to be in the low hundreds of thousands and for the effect to unwind over time," said the report, titled the Impact of AI on the Labour Market. "A common lesson is that AI is likely to increase the dynamism of the labour market by prompting more workers to leave existing jobs and start new ones." Such a process will require an "upgrade" to the UK's labour market infrastructure, TBI said, which could include an early warning system flagging how a worker's job could be affected by AI. The report estimated that deployment of AI could raise GDP - a measure of economic growth - by up to 1% over the next five years, rising to up to 6% by 2035. Unemployment, meanwhile, could rise by 180,000 by 2030. Currently, there are about 1.4 million unemployed people in the UK. However, TBI, which has described AI as a "substantial policy challenge", said all of these scenarios are dependent on factors such as what tools emerge over the next decade, investment decisions made by private firms and government policies that accelerate or delay implementation. The thinktank said AI would "certainly" replace some jobs but could create more by boosting workers' productivty, which would increase economic growth and create more job openings. It could also follow the pattern of previous technological breakthroughs by creating products and sectors that require workers to perform new tasks and roles. TBI indicated that administrative and secretarial jobs will be the most exposed to the technology, followed by sales and customer service, and banking and finance. Those jobs will produce the greatest time savings from deploying AI, the report said. TBI said most of the efficiencies are likely to come from products that perform cognitive tasks - such as chatbots - rather than AI-enabled hardware such as robots that carry out physical work. Thus sectors that involve complex manual work such as construction are likely to be less exposed, it said. However, jobs involving routine cognitive tasks such as secretarial work are more likely to be affected as well as industries that generate large amounts of data, such as banking and finance, which can train AI models more easily. TBI said it expected unemployment to rise initially as some companies take advantage of time savings from AI - the report estimates almost a quarter of the time private sector workers spend on their jobs could be saved - by letting staff go.

AI could take up to 3 million UK jobs, report finds

Over time, artificial intelligence could lead to up to three million job losses in the UK, but that number will be offset by the new jobs created in the sector, a new report says. Artificial intelligence (AI) could eventually displace between one and three million jobs in the UK, according to a new study. Researchers from theTony Blair Institute say that they expect unemployment to rise gradually as AI is adopted across the wider economy, with a peak loss of between 60,000 to 275,000 jobs a year. The report said that the shift in unemployment will "be capped and ultimately offset" as AI creates new demands and changes for workers. "Our best guess is that AI's peak impact on unemployment is likely to be in the low hundreds of thousands and that the effect will unwind over time," the Impact of AI on the Labour Market report says. AI that performs cognitive tasks could replace workers in fields like administration, sales, customer service or data-intensive industries like banking and finance, the report said. Firms will likely adopt AI in big numbers because the report estimates that companies could save almost a quarter of private-sector workforce time with AI, or the equivalent output of 6 million workers. London is already Europe's biggest hub for generative AI, with 30 per cent of Europe's new startups based in the UK's capital city, according to a Junestudy from venture capitalist firms Accel and Dealroom. For now, the impact of AI on the economy is "relatively modest" and could raise GDP by up to 1 per cent over the next five years and the level of unemployment up to 180,000 by 2030. In the long run, the labour productivity and time savings brought about by AI could boost economic growth by between 5 and 14 per cent by 2050, the report said, but the scale of that boost will depend on how expensive AI could be for companies to implement and how widely it's adopted. The report also suggested that bigger AI companies will have to scale their technologies and develop them into tools that can be easily and cheaply implemented by smaller companies. There's also potential for AI to improve the labour supply, by increasing "the quantity, quality and supply of workers in the economy," the report said.. This could be achieved by improving the performance of students in the classroom, by being used in preventative medical care to avoid fewer lost work days and by matching prospective employees with the right types of jobs for them. The report suggests that governments should equip workers with knowledge of the workplace changes coming due to AI, and give them financial safety nets and retraining opportunities to maximise employment. Researchers also suggest governments put in place contingency plans if job losses and AI adoption do not go as smoothly as predicted.