AI could add £144bn to GDP over next five years but millions of jobs at risk, think tank says
Artificial intelligence (AI) could put nearly 8m people out of work without lifting growth, or it could lift GDP by £306bn per year without costing any jobs.
That’s according to new research from the Institute for Public Policy Research (IPPR), which has called on the government to ensure the UK economy gets the full benefit of AI without suffering a huge rise in joblessness.
“History show that technological transition can be a boon if well managed, or can end in disruption if left to unfold without controls,” Carsten Jung, senior economist at IPPR, said.
The think tank suggested that 59 per cent of jobs were at risk from the second wave of AI, in which the technology becomes more fully embedded in firms’ processes.
In the worst case scenario, AI replaces all of the jobs at risk – 7.9m – with no GDP gains. Administrative roles are most at risk, including scheduling, database management and inventory management.
In the best case, in which all jobs at risk are augmented to adapt to AI, there are no jobs losses and an economic boost of 13 per cent over five years – equal to £306bn per year.
More likely, according to IPPR, is that 4.4m jobs will disappear, but with a GDP boost of £144bn per year over the next five years.
Bhargav Srinivasa Desikan, senior research fellow at IPPR, said frameworks needed to be put in place to minimise the disruption to the labour market, particularly by ensuring there are jobs available for those who may lose out to AI.
“We are at a sliding doors moment, and policy makers urgently need to develop a strategy to make sure our labour market adapts to the 21st century, without leaving millions behind,” Desikan said.
IPPR called for the government to introduce tax incentives to encourage job-augmentation rather than replacement. It also suggested key sectors, such as health, needed regulatory changes to ensure human responsibility was maintained.
The potential impact of AI on the labour market is a growing concern for policymakers. A recent government report found that jobs in the financial sector were most at risk from AI.
Canada emerged as the most vulnerable area, five times more exposed to AI than the north-east of England due to its high concentration of professionals.