AI could displace 3m UK jobs but losses to be offset by newly created roles, report finds

However, job losses will likely be offset as AI creates new roles and “pulls displaced workers back into the workforce”, said the thinktank in its Impact of AI on the Labour Market report, published on 8 November.

Tony Blair Institute (TBI) report: “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.” Photograph: iStock/Khanchit Khirisutchalual

“In all our scenarios we expect unemployment to rise initially as some firms choose to bank the time savings from AI and reduce the size of their workforce,” said the report. “Based on historic rates of labour shedding, we estimate one to three million jobs could ultimately be displaced by AI. Crucially, however, these job displacements will not occur all at once, but instead will rise gradually with the pace of AI adoption across the wider economy.”

The TBI estimates that job displacements will peak at between 60,000 and 275,000 jobs a year, which it describes as “relatively modest figures” compared with the average number of job losses across the UK over the last 10 years, which amounts to about 450,000 a year.

“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.

Analysis published by the Office for National Statistics (ONS) in 2019 estimated that about 1.5 million jobs in England were at “high risk” of automation in the future. Research commissioned by British Safety Council and detailed earlier this year in its Navigating the Future: Safer Workplaces in the Age of AI white paper found that 20 per cent of surveyed employers expect less than 10 per cent of their workforce to be replaced by 2034, with 19 per cent of employers foreseeing no replacement at all.

“There is no doubt that AI has the potential to be transformative, increasing productivity and outputs, and replacing some jobs; but an age of workerless workplaces is unlikely in this century,” said the British Safety Council white paper. The paper called for the proactive development of robust regulatory frameworks that prioritise worker safety and wellbeing, in order to avoid a race to the bottom on AI safety standards.

The jobs most at risk of displacement, according to the TBI’s report, are those that involve routine cognitive tasks, such as administrative roles, and those based in data-intensive industries, such as banking and finance. Manual jobs in construction and skilled trades are less likely to be exposed to AI.

Other positives flagged by the report are the impact of AI on healthcare, which it said could result in a healthier workforce, fewer sick days, longer careers and lower welfare costs. This comes at a time when a record 2.8 million people in the UK are economically inactive due to ill health.

“The country is in the foothills of AI applications in health services but already there is enormous potential for AI to speed up medical research, enable a preventative approach to healthcare, drive more efficient identification, treatment and discharge of people from the health system, and, importantly, spur further assistive technologies that can help disabled people or those with short-term health issues to re-enter the workforce,” said the report.

It does, however, warn of concerns that AI could result in extra scrutiny of people’s work, which could increase workers’ stress levels.

“This means that careful management and communication of how AI is applied in the workplace will be a crucial element of the transition,” the report said.