Blog: From Brawn to Brains?

The impact of technology on jobs and what it means for the future of work is front of mind for businesses, policymakers, the media and the public. Angus Knowles-Cutler FRSA argues that individuals, firms and political leaders must adapt to ensure we do not leave people behind.

Concerns about the impact of technology on jobs may seem to be a relatively modern problem. But as far back as 1589, the inventor William Lee applied to Queen Elizabeth I for a patent on a new type of knitting machine that could produce far higher quality stockings than weavers could by hand. The Queen denied him his patent, saying: “consider thou what the invention could do to my poor subjects. It would assuredly bring to them ruin by depriving them of employment, thus making them beggars.” In spite of Mr Lee’s setback, over the next three centuries the UK became the world leader in textile manufacturing.

The same debate continues in the second Elizabethan age. In the last year I have been involved in a number of research initiatives looking at the future of work and the impact of technology, robotics and automation on the UK’s economy.  Last November Deloitte collaborated with Carl Benedikt Frey and Michael Osborne of Oxford University on our report, Agiletown. As well as considering the broader impact of technology on London, we suggested that 35% of jobs in the UK were at high risk of automation in the next 10 to 20 years. The jobs considered to be at high risk are largely administrative in nature or involve routine manual activities that a machine or computer could replicate. Those jobs predicted as being least at risk are ones that require higher-level cognitive or social skills, significant manual dexterity or some combination of both.

In our latest report we compare these findings with actual changes in employment over the last 15 years, revealing losses but also significant gains. While technology has contributed to the loss of over 800,000 lower-skilled jobs, there is equally strong evidence to suggest that it has helped create nearly 3.5 million more jobs than the ones lost. Crucially, every nation and region of the UK has benefitted, and we estimate that this technology-driven change has added £140 billion to the UK’s economy in new wages.

The data shows that jobs are indeed being lost in lower-skilled clerical, administrative and manual occupations. Meanwhile, thousands of new jobs are being created every year in technology related and creative occupations, business and professional services and caring professions. These growth jobs require a high degree of manual dexterity or higher cognitive skills, such as those that depend on management or human social interaction; a shift from brawn to brains.

When you consider the impact of technology on jobs in the past, it becomes clear that this is not a new phenomenon. Historically,  we can see that tasks that are repetitive, routine and dangerous for humans have increasingly been performed by machines. Technology tends to have the greatest impact at the task level and can often change the nature of an occupation rather than replace it. In his recent report my colleague and Deloitte’s Chief Economist, Ian Stewart, demonstrates that over the last 140 years technology has replaced many dangerous, unpleasant, boring and repetitive tasks falling within jobs that continue to exist, albeit in a changed form. It has created capacity and demand for higher-skilled cognitive and socially interactive jobs.

Looking to the future, technology can only continue to play a bigger role in the workplace. Some commentators worry that this presents us with a binary choice: human or robot jobs. But the reality is more nuanced. While technology can indeed wholly automate certain routine tasks, other occupations benefit most from partial integration or technology. The resulting human-machine combination augments total intelligence and can significantly raise both productivity and quality. However achieving the optimum mix of human and machine labour across the workforce will depend on overcoming several challenges. Not least among these are the technical difficulties associated with many facets of automation and robotics, their cost and social or political resistance.

Ensuring that the workforce of the future has the right skills and education is vital. The survey of British businesses we conducted last year suggests that while three-quarters of businesses expect to grow their overall workforce in the coming years, they also feel that the skills required are changing. The highest priority skills identified by these businesses are digital know-how, creativity, management and leadership, entrepreneurship, complex problem solving and negotiation.

The lessons of history around technology are extremely positive for the UK and there is no question that skills are crucial to success in the future. Businesses need to be clear about what skills and competencies they need, not just today but in the next five to 10 years. Educators need to adapt what they teach – and how – to ensure that the young people entering the workforce, as well as existing workers always have the skills that they need to work effectively alongside machines. Government needs to ensure that policy is coordinated with business and education strategies to ensure that no one gets left behind. Finally, individuals will need to plan their careers acknowledging that theirs will be a longer working life in which they will need to remain agile in attitude, aptitude and skill but where the rewards will be more interesting, more challenging and more lucrative employment.

There is likely to be a strong correlation between graduate level skills and a healthy knowledge-based future economy. The UK has the highest graduate participation in Europe. It also has the strongest research universities and centres. Together this will help the country to remain well positioned for continued technology driven shifts in the labour market.

However we must not be complacent. Lower paid jobs are most at risk of automation and our research found that jobs that pay £30,000 a year or less today are five/six times more likely to be automated than those paying £100,000 or more. In London the figure rises to eight times more likely. If this trend is not planned for correctly and it continues, we could see a marked hollowing out effect in the workforce resulting in increased inequality. Our goal should be fairness of opportunity for all, including the chance for those in education and those already in the workforce, to acquire the right skills and to replenish them on an ongoing basis.

Our work shows that the UK is benefiting from the changes that technology brings for the time being, but the changes will continue to take place and could potentially accelerate. The march of technological progress affects everyone. We must work together and plan now for how we, collectively and individually, must adapt to the future of work.

Angus Knowles-Cutler FRSA is Vice Chairman of Deloitte and serves as London senior partner. Deloitte’s report, From brawn to brains: The impact of technology on jobs in the UK was published earlier this year.