You are currently reading Issue 77: Equal Pay, April 2017
Womanthology_Logo

Connecting women and opportunity

Womanthology is a digital magazine and professional community powered by female energy and ingenuity.

Connecting women and opportunity

Womanthology is a digital magazine and professional community powered by female energy and ingenuity.

Womanthology Icon

How might smart automation impact on gender differences in the labour market of the future? – John Hawksworth, Chief Economist at PwC

Hospital robot

John Hawksworth is chief economist at PwC, specialising in global macroeconomics and public policy issues. He is the editor of our UK Economic Outlook report and a range of other economic publications. He has over 25 years of experience as an economics consultant to leading public and private sector organisations, both in the UK and overseas.

John Hawksworth - PwC
John Hawksworth

On 24th March 2017, PwC published its latest UK Economic Outlook report, which amongst other topics, considers the potential impact of automation from robotics and Artificial Intelligence on the UK labour market.

Report background: Automation focus

We produce our UK Economic Outlook report three times a year and, as well as looking at short-term prospects for the economy, we also include two special research articles in each edition looking in more depth at topical issues for business and government. In our March 2017 edition, one of these articles focused on the potential long-term impact of automation on the jobs market in the UK and other major economies.

Overview of findings

  • Our analysis suggests that around 30% of UK jobs could potentially be at high risk of automation by the early 2030s, lower than the US (38%) or Germany (35%), but higher than Japan (21%).
  • The risks appear highest in sectors such as transportation and storage (56%), manufacturing (46%) and wholesale and retail (44%), but lower in sectors like health and social work (17%).
  • For individual workers, the key differentiating factor is education. For those with just GCSE-level education or lower, the estimated potential risk of automation is as high as 46% in the UK, but this falls to only around 12% for those with undergraduate degrees or higher.
  • However, in practice, not all of these jobs may actually be automated for a variety of economic, legal and regulatory reasons.
  • New automation technologies in areas like AI and robotics will both create some totally new jobs in the digital technology area and, through productivity gains, generate additional wealth and spending that will support additional jobs of existing kinds, primarily in services sectors that are less easy to automate.
  • The net impact of automation on total employment is therefore unclear. Average pre-tax incomes should rise due to the productivity gains, but these benefits may not be evenly spread across income groups.

Potential future impact of smart automation

RobotWe focus in the report on the potential future impact of what we call ‘smart automation’ – i.e. related to potential future advances in application of digital technologies such as artificial intelligence (AI) and robotics on the jobs market. We are not considering more established forms of automation based on purely mechanical devices without any added ‘brain power’.

Differences in potential impacts by gender

Overall, we estimate that around 34% of existing UK jobs held by men could be at potential high risk of automation by the early 2030s, as opposed to only around 25% of jobs currently held by women. This reflects the fact the sectors where our analysis suggests jobs are most at risk from automation are transport and manufacturing, where men hold the majority of the jobs at present.

By contrast, sectors such as health and social work and education, where women hold more of the existing jobs, are assessed as being at relatively lower risk on average. The results therefore reflect the historical patterns of employment in the UK, rather than necessarily reflecting differences in the underlying characteristics of men and women. But no sector or group of workers is likely to be entirely immune from the effects of the automation in the longer term, so women will also face challenges in adjusting their skills and career plans to fit with the advance of digital technologies over time.

AI and robotics are also creating new jobs

New automation technologies in areas like AI and robotics will both create some totally new jobs in the digital technology area and, through productivity gains, generate additional wealth and spending that will support additional jobs of existing kinds, primarily in services sectors that are less easy to automate.

The net impact of automation on total employment is therefore unclear. Average pre-tax incomes should rise due to the productivity gains, but these benefits may not be evenly spread across income groups.

More ongoing education and training needed

LEGO robotThere is a particular challenge here for both governments and individuals to boost education and training levels in areas that are less easy to automate. Given the speed of digital technological change, such learning and adaptation needs to continue throughout people’s working lives, which in future may require more flexibility to move between occupations as technology evolves, creating new opportunities but also displacing or changing the nature of many existing jobs.

Future focus

Automation continues to be a topic of great interest for PwC and its clients, so you can expect further research from us on this topic later this year and beyond.

 

http://www.pwc.co.uk/services/economics-policy.html

https://twitter.com/pwc_uk

Share this article