Why we need more robots, not less

Despite popular fears of resulting widespread job losses, the increasing development of robots should not be restricted by the state, says a report from the Centre for Policy Studies (CPS).

In its report Why Britain Needs More Robots it argues it is unlikely employment will fall as a result of automation, and claims UK has too few robots compared to countries like Germany.

The free-market think tank also argues that taxing robots would not protect jobs, but instead would supress wage and productivity growth and encourage companies to locate elsewhere.

However, the CPS does acknowledge that automation has the potential to increase income inequality. The best way to counter this, it suggests, is better training programmes.

The report’s author, Daniel Mahoney, says: “Historically, concerns about the impact of mechanisation have been unfounded. The creative destruction brought about by new technology has boosted productivity, raised living standards and created new job opportunities.

“This has held true into the 21st century: a recent study by Deloitte found that technology is likely to have displaced over 800,000 jobs in the UK between 2001 and 2015, but created nearly 3.5 million new ones over the same period.”

Increasing mechanisation, he says, will undoubtedly have an impact on the labour market. The Bank of England has estimated up to 15 million UK jobs could be automated over time, though this could well be an overestimate “as this only considers whether a task can potentially be automated, not whether it is economically sensible for that to happen”.

Every year in the UK, says Mahoney roughly 10% of jobs are lost – but another 10% are created. PricewaterhouseCoopers believes the overall net impact of automation on employment is likely to be neutral. 

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Furthermore, Mahoney argues UK workers may be less at risk from automation than those of other developed nations. “Germany is more prone to automation due to its dependence on manufacturing. The City of London’s focus on international markets makes the UK’s finance industry less prone to automation than the US finance industry.”

He adds that the “automation scaremongering” also ignores the fact that, rather than simply replacing jobs, “the adoption of new technologies seems to lead to a new division of labour: workers increasingly perform new and more complex tasks, with machines complementing rather than replacing them”.

The scaremongering, says Mahoney, overlooks the fact that automation could bring significant benefits, as UK productivity is around 20% lower than the G7 average. “A key factor is undoubtedly the low capital-labour ratio in the UK economy – the fact that we have an abundance of relatively low-paid workers and relatively little corporate investment.

“This has come about largely because of a lower take-up of automation compared to our competitors. We have only 71 robots per 10,000 employees in the sector, compared to 301 in Germany.

“Rather than being at risk of excessive reliance on robots, the UK doesn’t have enough of them.”

Mahoney acknowledges concerns that automation may foster inequality. “It is certainly an issue that needs to be addressed. In the coming years, it is likely that the wider UK workforce will need to adapt to the new labour market, and that this process will be painful for some in areas that are highly prone to automation, for example jobs involving driving and delivery.”

One potential solution, he suggests, is to focus the education system, and professional training, on areas where humans are likely to retain an advantage over AI.

“The UK Commission for Employment and Skills has suggested that continuous learning and adaptation will be an essential part of successful participation in the labour market, due to the increasing rate of technological change. They argue that careers may become more varied, as jobs change rapidly, increasing the need for employees to upskill or reskill.” 

The report concludes that as the UK is already behind the curve on mechanisation, “deliberately impeding the growth of automation with the explicit purpose of ‘protecting jobs’ would be detrimental to the UK economy’s progress – and entrench our labour productivity problems, as well as the muted wage growth that has been the hallmark of our economy over the past decade. Similarly, taxing robots or legislating for them to be owned by employees would discourage investment in capital, exacerbating all of these problems.

“At this stage, automation looks far more like a blessing for Britain than a curse.”

Image: Abidal/Dreamstime

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