• Back office, entry level and part-time jobs most exposed to automation, and women significantly more affected
• 11 per cent of tasks are exposed to existing generative AI, rising to 59 per cent if companies integrate AI more deeply
• A range of scenarios demonstrate a ‘job apocalypse’ is not inevitable: on the contrary, huge wage and GDP gains are also possible
• An alternative future is possible if government, employers and unions act to preserve and help create new automation-safe jobs

First of its kind analysis of the impact of generative artificial intelligence (AI) on the UK labour market uncovers a distinct sliding doors moment for the UK, with possibilities for huge job disruption in future or significant GDP gains, depending on government policy.

The report identifies two key stages of generative AI adoption: the first wave, which is here and now, and a second wave in which companies will integrate existing AI technologies further and more deeply into their processes.

IPPR analysis of 22,000 tasks in the UK economy, covering every type of job, finds that 11 per cent of tasks done by workers are already exposed to in the first wave. It identifies ‘routine cognitive’ tasks (such as database management) and ‘organisational and strategic’ tasks (such as scheduling or inventory management) as most exposed to generative AI, which can both read and create text, software code and data.

However, this could increase to AI doing 59 per cent of tasks in the second wave. This would also impact non-routine cognitive tasks (such as creating and maintaining databases) and would affect increasingly higher earning jobs.

It says that back-office, entry level and part time jobs are at the highest risk of being disrupted during the first wave. These include secretarial, customer service and administrative roles.

Women are more likely to be in such jobs, which means they will be among the most affected, the report says. Young people are also at high risk as firms hire fewer people for entry-level jobs and introduce AI technologies instead. In addition, those on medium and low wages are most exposed to being replaced by AI.

IPPR has modelled three illustrative scenarios for the potential impact of the second wave of AI adoption on the labour market, depending on policy choices:

• Worst case scenario – full displacement: all jobs at risk are replaced by AI, with 7.9 million job losses and no GDP gains
• Central scenario: 4.4 million jobs disappear, but with economic gains of 6.3 per cent of GDP (£144bn per year)
• Best case scenario – full augmentation: all jobs at risk are augmented to adapt to AI, instead of replaced, leading to no job losses and an economic boost of 13 per cent to GDP (£306bn per year)

IPPR has also modelled three scenarios for the potential impact of “here and now” generative AI on the labour market:

• Worst case scenario – full displacement: 1.5 million jobs are lost, with no GDP gains
• Central scenario: 545,000 jobs are lost, with GDP gains of 3.1 per cent (£64bn per year)
• Best case scenario – full augmentation: no jobs are lost, with GDP gains of 4 per cent (£92bn per year)

Additionally, wage gains for workers could be huge – more than 30 per cent in some cases – but they could also be nil.

Deployment of AI could also free up labour to fill gaps related to unaddressed social needs. For instance, workers could be re-allocated to social care and mental health services which are currently under-resourced.

The modelling shows that there is no single predetermined path for how AI implementation will play out in the labour market. It also urges intervention to ensure that the economic gains are widely spread, rather than accruing to only a few.

Without government action and with companies left to their own devices, the worst-case scenario is a real possibility, IPPR says.

IPPR recommends the government develops a job-centric industrial strategy for AI that encourages job transitions and ensures that the fruits of automation are shared widely across the economy. This should include:

1. Supporting green jobs, as green jobs are less exposed to automation than non-green jobs
2. Fiscal policy measures, such as tax incentives or subsidies to encourage job-augmentation over full displacement
3. Regulatory change, to ensure human responsibility of key issues, such as with health

Carsten Jung, senior economist at IPPR, said:

“Already existing generative AI could lead to big labour market disruption or it could hugely boost economic growth, either way it is set to be a game changer for millions of us. Many firms are already investing in it, and it has potential to speed up many more tasks as more businesses adopt it.

“Over the next five years it could transform knowledge work. The question now is less whether AI can be useful, but rather how fast and in what manner employers will use it. History show that technological transition can be a boon if well managed, or can end in disruption if left to unfold without controls. Indeed, some occupations could be hard hit by generative AI, starting with back office jobs.

“But technology isn’t destiny and a jobs apocalypse is not inevitable – government, employers and unions have the opportunity to make crucial design decisions now that ensure we manage this new technology well. If they don’t act soon, it may be too late.”

Bhargav Srinivasa Desikan, senior research fellow at IPPR, said:

“We could see jobs such as copywriters, graphic designers and personal assistants roles being heavily affected by AI. The question is how we can steer technological change in a way that allows for novel job opportunities, increased productivity, and economic benefits for all.”

“We are at a sliding doors moment, and policy makers urgently to develop a strategy to make sure our labour market adapts to the 21st century, without leaving millions behind. It is crucial that all workers benefit from these technological advancements, and not just the big tech corporations.”

ENDS

Carsten Jung and Bhargav Srinivasa Desikan, the report’s authors, are available for interview

CONTACT

David Wastell, Director of News and Communications: 07921 403651 d.wastell@ippr.org

Liam Evans, Senior Digital and Media Officer: 07419 365334 l.evans@ippr.org

NOTES TO EDITORS

• The IPPR paper, Transformed by AI: How generative artificial intelligence could affect work in the UK – and how to manage it, by Carsten Jung and Bhargav Srinivasa Desikan, will be published at 0001 on Wednesday March 27. at www.ippr.org/articles/transformed-by-ai
• Advance copies of the report are available under embargo on request
• Generative AI refers to new computer software that can read and create text, software code and data. Cutting edge models have even shown ability reason and apply abstract concepts in a range of disciplines, often at undergraduate level.
• To see which tasks and jobs will be affected by AI, IPPR produced a metric that indicates how many tasks could be transformed by AI and then scored each task with regards to whether a human could perform it 50% more quickly with the help of AI.
• “Here and now AI” exposure: This is the first wave of AI adoption, where existing generative AI such as GPT4 can already undertake the tasks involved.
• “Integrated AI” exposure: This is the second wave of AI adoption, in which generative AI is connected to other software systems, including databases and has the ability to execute tasks (such as making bookings or orders) that it allows it to execute multiple steps.
• IPPR (the Institute for Public Policy Research) is an independent charity working towards a fairer, greener, and more prosperous society. We are researchers, communicators, and policy experts creating tangible progressive change, and turning bold ideas into common sense realities. Working across the UK, IPPR, IPPR North, and IPPR Scotland are deeply connected to the people of our nations and regions, and the issues our communities face. We have helped shape national conversations and progressive policy change for more than 30 years. From making the early case for the minimum wage and tackling regional inequality, to proposing a windfall tax on energy companies, IPPR’s research and policy work has put forward practical solutions for the crises facing society. www.ippr.org