Technology and automation has created more jobs than lost

01 March 2016 5 min. read
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Over the past fifteen years, technology has seen to the loss of a range of low paid jobs in the UK, with a relatively large increase in higher paying positions. According to projections in a new Deloitte article, there is an upward trend in job creation due to automated technologies. Deloitte claims that this technology-driven shift has already created nearly four times more jobs than have been lost, and has brought considerable additional value to the UK’s economy.

According to a poll – held by the Future Foundation research agency on behalf of Infosys – 45% of young Britons between the age of 16 - 25 believe technology will imminently replace them in the workforce due to low confidence in their own IT skills. A new report by Deloitte, however, titled ‘From Brawn to Brains The impact of technology on jobs in the UK’, allows for a more nuanced, positive outlook arguing that many occupations can actually benefit from partial integration of technology relieving them from many manual, routine tasks in, for instance, creative occupations, business, professional services and caring professions. Deloitte considers the past in relation to the future promise from automation technologies currently being developed, including AI, robotics and RPA. 

Robotics are projected to perform 25% of four key manufacturing sector functions in the coming decade, and RPA is set to create a wave of automation in the coming years as more and more businesses adopt the technology. AI technologies, with advanced cognitive capabilities, create an even more uncertain spectre as their capabilities continue to develop. Many of these technologies are still someway from being deployed or are some ways from reaching maturity.

change in employment by occupation from 2001 to 2015

Deloitte explores the effect of technology on the UK labour market over the past 15 years to make a general projection about the changes technology may come to have over the coming two decades. The study seeks to use a model developed by Deloitte in association with Carl Benedikt Frey and Michael Osborne of Oxford University in Agiletown: The relentless march of technology and London’s response, about the future effects of automation on the basis of the past 15 years of technological advance.

According to the study, a wide range of easily automated jobs have been lost since 2001. Jobs in a range of sectors with a probability of 0.7 for computation has seen declines, with steeper declines coming closer to 1. At the same time, the UK economy has seen a large increase in the number of professional jobs, technical jobs and managerial positions, as well as the number of carers.

change in total employment 2001 - 2015 by skills category

Different regions have seen different distributions of loss from technological advances over the past 15 years, with particularly the South East and London seeing a large number of automation resilient positions created, while the East, North West, and Midlands have seen a loss of high automation probability jobs. In total 3.5 million jobs were added to the economy since 2001, with a total loss of 800,000 during that same period.

probability of computerisation and median earnings

The analysis also considers the median income in relation to the probability of automation for a range of jobs, finding that the higher the pay the lower the probability of computerisation. At a probability of around 0.3 the reward for employment begins to decline, while any position above 0.4 sees the probability for computerisation increase further as the relative payment for employment declines from around £20,000 to £15,000 a year. The decline in high probability for computerisation positions, and the increase in low probability positions, has gone hand in hand with an increase in pay of newly created positions, with on average each one of these new jobs paying £10,000 more per annum than the one lost – with an estimate that this technology-driven change has added £140 billion to the UK’s economy since 2001.

employment changes

The research highlights that the changes have seen a massive reduction in the number of personal assistants and secretaries, down by more than 200,000, as well as typist and related keyboard positions, down by more than 100,000. Bank clerks and post office worker demand has plummeted by 83,000.

Interestingly, the largest two groups of growth in terms of employment, are care workers and home carers as well as teaching assistants, with 271,000 and 235,000 additions respectively, all representative of some of the lowest paid positions in the UK economy. The number of higher paying positions created, relating to professionals such as nurses, 186,000, secondary teachers, 131,000, and business professionals, 115,000 – likely pull up the average in terms of pay.

The report paints a relatively positive picture about the future of the UK employment market, given the trend continues as it has over the last 15 years – even with the projected coming loss of 35% of current positions on the basis of rapidly advancing and new forms of automation technologies. The past rapid increase in low paid social positions, as well as high paid calculative positions, highlights the potential of an economic divisionary trend following continued automation.