One-third of jobs in the UK at risk from automation

To remain a world leading city, London needs to manage the transition of its workforce into new occupations and industries

  • 35% of existing UK jobs at high risk of replacement in next twenty years, 30% in London
  • 40% of UK jobs are low or no risk, 51% in London
  • Lower-paid jobs over five times more likely to be replaced than higher-paid, almost eight times as likely in London
  • 73% of businesses in London plan to increase headcount overall, with advances in technology requiring new skills and a major shift in job types

Technology, automation and robotics will cause a significant shift in the UK labour market in the next twenty years, with one-third (35%) of existing jobs at risk of being replaced according to research carried out by Deloitte with Carl Benedikt Frey, of the Oxford Martin School, and Michael A Osborne, of the Department of Engineering Science, at the University of Oxford.

Advances in technology will likely see jobs requiring repetitive processing, clerical and support services, replaced with roles requiring digital, management and creative skills. These trends are already well under way.

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Frey and Osborne conducted a similar study in 2013 on automation in the US job market. The latest research finds that:

  • 35% of existing jobs in the UK, decreasing to 30% in London, are at high risk from automation over the next two decades.
  • However, 40% of UK jobs are at low or no risk. In London, 51% of jobs are at low or no risk.
  • “High risk” jobs are in office and administrative support; sales and services; transportation; construction and extraction; and production.
  • “Low or no risk” jobs are in skilled management; financial services; computing, engineering and science; education; legal services; community services; the arts and media; and healthcare.
  • Across the UK, jobs paying less than £30,000 a year are nearly five times more likely to be replaced by automation than jobs paying over £100,000. In London, lower paid jobs are eight times more likely to be replaced.

Angus Knowles-Cutler, London senior partner at Deloitte, said:

“Technological advances are likely to cause a major shift in the UK labour market in the coming decades, creating both challenges and opportunities.

“Unless these changes coming in the next two decades are fully understood and anticipated by businesses, policy makers and educators, there will be a risk of avoidable unemployment and under-employment. A widening gap between ‘haves’ and ‘have nots’ is also a risk as lower skill jobs continue to disappear.”

However, there is evidence that businesses are already responding and recruiting more highly-skilled positions. Deloitte also surveyed 100 businesses based, or with premises, in London on how technological and labour market changes will impact their employment, skills and property needs in the next five years. London businesses are already planning to increase headcount, attract new skills and redesign their workplaces.

Deloitte’s survey finds that:

  • 73% of London businesses plan to increase their headcount in the next five years, 51% say they will add at least 10% to current staff numbers.
  • Where jobs are being reduced, automation will be the leading factor, followed by nearshoring and then offshoring.
  • 84% of London businesses say the skills of their employees will need to change over the next ten years. ‘Digital know-how’, ‘management’ and ‘creativity’ are the skills London businesses increasingly need, with ‘processing,’ ‘support and clerical work’ and ‘foreign languages’ less in need.
  • 84% of businesses in London’s transport, travel and hospitality sector expect technological change to have a predictable and positive impact on their businesses, followed by technology, media and telecoms (81%), public sector (70%) and financial and business services (68%).
  • 36% of London businesses plan to increase their property footprint in London, while 40% plan to increase their flexible or collaborative work spaces.
  • The dominant factors businesses cite for London being attractive for their recent recruits were the financial package, the workplace environment and the ability to learn new skills.

Angus Knowles-Cutler adds:

“London has a lot going for it. It is the greatest high skills city in the world and the fact that most businesses plan to grow their headcount here in the next ten years is very positive.

“Across the UK as well, there are reasons to be positive, the economy is recovering and job growth is coming from dynamic businesses, hiring faster than the national average.

“But below the headline numbers things are changing fast, and the challenges, right across the UK, are evident. The likely loss of lower paid jobs is a real concern, and the new skills that employers will need in the future deserves close attention.”

Carl Benedikt Frey, James Martin Fellow, Oxford Martin School at the University of Oxford, said:

“According to our estimates 35 percent of jobs in the United Kingdom are at risk of automation, relative to 30 percent in London.

“Skilled cities like London are incubators for new ideas and products. With the right policies, London can be at the front-line in developing the next generation of digital technologies.

“To remain a world leading city, London needs to manage the transition of its workforce into new occupations and industries, as it has done so successfully in the past.

“While the scope of potential job automation is rapidly expanding, London’s workforce is relatively resilient to these developments.”

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