Adopt, adapt and improve: a brief look at the interplay between labour markets and technological change in the UK

Worries that jobs will be lost to automation are not new but have been heightened since the release of Frey and Osborne's 2013 study [available in VOCEDplus at TD/TNC 123.687], which warned that nearly half of jobs in the US were at 'high risk' of automation. Nearly a decade on, this short briefing note looks at both the current and longer-term picture of the relationship between technology and jobs and pay.

The evidence suggests that automation doesn't just destroy jobs, it can also raise demand for other workers, and create the space for entirely new jobs. Consistent with this, there is evidence that exposure to automation has affected the cross-section of employment growth in the UK - both in the last decade but also in the longer-term. This is consistent with what is now a wide body of international evidence pointing to the importance of automation for wage determination. So automation is affecting jobs. But the fact that aggregate employment continues to grow alongside these effects suggests automation's job-destroying impact continues to be offset by positive indirect effects. The authors conclude that, overall, while we must remain vigilant to the impact of automation, especially since it affects some people and places more than others, the most pressing problems facing the UK economy are not too much automation, but low investment and low productivity growth. We should worry more about these and less about robots taking our jobs.

Edited excerpts from publication. Show less