1. Economics
March 7, 2017

“The robots are coming”: How will automation affect London’s economy?

By Fiona Twycross

Labour assembly member Fiona Twycross on the rise of the robots.

The vision of the world of work being run by robots and machines is familiar from futuristic sci-fi films, but advances in technology could mean that a new post-industrial revolution is closer than we think. 

Automation – the application of new technology to produce and deliver products and services – is not a new phenomenon: in London, for example, the tube and DLR already have driverless technology. However, the pace at which further automation is expected could result in a significant change to the labour market.

Humans have, throughout time, had a fascination with using machinery to increase productivity and create artificial intelligence. From the actual invention of the wheel and the imagination that produced Mary Shelley’s Frankenstein’s monster, to self-checkouts, we have progressed to the point where MEPs have called for rules on how humans will interact with artificial intelligence and robots. The report from the Committee of Legal Affairs at the EU highlighted that robots will “unleash a new industrial revolution, which is likely to leave no stratum of society untouched”.

Before we start imagining robots taking over all aspects of society, though, let’s look at the automation already in place. We now have driverless trains, and generally aeroplanes only really need a pilot to take off and land; at present, though, the idea of driverless cars becoming a widespread phenomenon seems much more futuristic.

But is it? A report by IPPR has indicated driverless cars will become the norm by the mid-2030s. We have recently seen a move from cashiers, to self-checkouts. Amazon has gone one step further and even designed a shop that does not need any interaction with a human being or require self-checkout: instead technology monitors what you have taken from the shop and charges you through your Amazon account.

Technological change will displace some forms of work in one way or another. Estimates suggest that 15m jobs could be at risk with automation, and those  jobs paying less than £30,000 a year are nearly eight times more likely to be replaced by automation than those paying more than £100,000 in London (compared to five times across the UK). This could have a real impact on low and middle income earners.

Content from our partners
The key role of heat network integration in creating one of London’s most sustainable buildings
The role of green bonds in financing the urban energy transition
The need to grow London's EV infrastructure at speed and scale

If we take a look at retail, a relatively low-pay industry, almost two-thirds of jobs are forecast to go by 2030. The move towards automated vehicles on the road will impact on transport services, deliveries and couriers and infrastructure.

Despite this, the labour market projections by GLA Economics last year estimate that the number of jobs in London is projected to increase by 1.2m by 2041.

In response to my question at Mayor’s Question Time last January, mayor London’s mayor Sadiq Khan said, rightly, that as much as we can predict and make projections, nobody is completely sure how automation is going to impact on our day-to-day lives. What we do know is what we want society to look like in the future – and we can therefore use automation as an opportunity to achieve this.

A changing economy is not new to us. Even without automation, we have Brexit and changing businesses models such as the developing ‘gig-economy’. Whether we think we should resist the change or are excited by the possibilities, we need to be fully prepared to get the best conditions for workers and businesses.

In January, the Prime Minster released a green paper on her ten-point plan Industrial Strategy, which noted that Britain has been slow in its uptake of robotics and automation. This week, the government has published a Digital Strategy which includes an announcement for research funding of £17.3m to British universities to conduct research on artificial intelligence and robotics.

Despite the intentions in both strategies to focus on lifelong learning, there is a lack of detail over the government plans to achieve this. The reckless decisions in relation to our economy and the cuts which education is facing that her government has overseen, begs the question as to how skills will be provided that ensure a potential displaced workforce have access to the opportunities they need.

The future is in skilled work, and education reduces inequality. Yet on the job training has halved in the past two decades. In London, the Mayor’s Skills for Londoner’s Taskforce will be well placed to anticipate changes and identify ways to upskill London’s existing workers as technology advances. All the while we must ensure that workers’ rights are protected and all Londoners have access to skilled employment and a London Living Wage.

The impact of automation on the labour market will be a challenge – but this is our opportunity to ensure the economy works for everyone. We cannot afford to fall behind in the new technological revolution; we must embrace technology to create a thriving economy but we need to make sure this does not leave those displaced by technology without the skills and opportunities they need.

The future is in high skilled and well paid jobs. The reality is, the robots are coming and we must prepare now.

Dr Fiona Twycross is a London-wide member of the London Assembly.

Want more of this stuff? Follow CityMetric on Twitter or Facebook.

This article is from the CityMetric archive: some formatting and images may not be present.
Topics in this article :
Websites in our network