Automation, Covid-19 and the Future of Jobs

The growing economic crisis is bringing a number of existing labour market challenges into very sharp focus. One of the biggest is automation (the fourth industrial revolution), which has been lurking in the public consciousness for some time, but which may well take on an even deeper significance, given the seismic shifts going on in the labour market and employment practices at this time. 

Before we can address what this might mean, we must first engage in a little bit of mythbusting. The media often presents us with dystopian stories about robots either taking all our jobs, or enabling us to live the life of Riley by serving our every whim. The truth, however, is probably somewhat more mundane. According to Rian Whitton in “Automation Anxiety in an Age of Stagnation“, automation can be defined as: “the process of applying technology and organisation to do more with less, with robotics being its most identifiable manifestation.” 

Beyond the Fear

In other words, it isn’t all about robots taking our jobs. Rather, it is about the harnessing of technology to make workers and businesses more productive, which by definition has the potential to create both employment risks, and employment opportunities, as new sectors emerge and businesses take advantage of new efficiencies. 

This is borne out historically, with each of the previous industrial revolutions making some jobs obsolete, creating others, but with overall productivity and employment tending to increase. The recent digital revolution has been no different, albeit with productivity in this country remaining somewhat sluggish, as automation and employment have grown.

Shifting the Skills Set

One of the things automation has done, however, is to create a shift in employment skills demand from physical to analytical and interpersonal skills (See Figure 1). As our recent AutoNation Report found, the use of physical skills, such as Installation and Equipment maintenance, have all declined significantly from 2006-2019, whilst interpersonal skills such as Persuasion have grown (Emsi, 2019). Furthermore, of those occupations with the highest share of tasks that are potentially automatable, most are found at the lower end of the skills spectrum. For instance, whilst just 7% of tasks in Professional occupations are considered to have high exposure to automation, for Elementary occupations this figure is 69%. 

Impact on Employment

Although we need to stress that high task share exposure to automation does not necessarily equal lost jobs – it could simply mean that those tasks can be automated, changing the shape of the job role to make workers more productive – the big concern at this time is that it is precisely those jobs with the highest share of disappearing physical skills and potentially automatable tasks where we are seeing the biggest job losses. 

In the period January to May, for instance, the biggest increase in those claiming Jobseeker’s allowance was for those who had been employed in Elementary occupations. A major concern must be whether these people will have jobs to return to, partly because many companies that employed them will cease trading, but also because many of the changes in working practices that are currently being implemented may mean that such businesses decide to invest in automation, rather than risk further disruption to their business by reemploying people under new and changing workplace conditions.

Automation therefore has the potential to lead to long-term unemployment, such as we last saw back in the mid-80s, especially among those with lower skills. Yet it could also lead to the creation of an array of new jobs to harness the power of that automation, just as happened during previous industrial revolutions.

Issues for Post-16 Policy Makers

Although automation was already playing a huge part in changing the labour market, the current crisis is likely to exacerbate this.  Jobs that existed before the crisis may not exist after it. However, as well as putting many out of work, it should also create new opportunities.

There are three issues in particular that FE and HE providers should be looking at carefully in dealing with this challenge:

1. Firstly, gaining a good understanding of which occupations have the most exposure to automation is essential. If education and training providers are continuing to teach skills that are soon likely to become automated, they will be failing to give learners the best opportunity of holding down sustainable careers. The flip side of this is that by better understanding which types of skills have grown in prevalence in recent years – particularly analytical and interpersonal – they can ensure these skills are included in what is being taught, and so improve the long-term employment prospects of their learners.
2. Secondly, identifying emerging skills is going to prove crucial. If the combination of crisis and automation are changing the way employers work, education and training providers will need to be far more aware of what these changes actually mean in terms of hard and soft skills, especially at the local level. Only by identifying emerging skills, and including them in courses and modules, will providers be able to give people the skills they need to succeed in a rapidly changing labour market.
3. Thirdly, the changes being wrought by both automation and the crisis mean there will need to be a far greater emphasis on lifelong learning. Automation doesn’t so much destroy jobs – although it can do that – as change the nature of them. In order to successfully navigate their way through the complexities of changing jobs and a changing jobs market, people will therefore need access to upskilling and retraining throughout their working lives, and the FE sector needs to be well placed to provide that, especially to those at the lower end of the skills spectrum who have lost their jobs.

Andy Durman, Managing Director of Labour Market Insight specialists, Emsi UK

‘Revolutionary Forces‘

In the immediate aftermath of the Covid-19 pandemic, it is easy to forget that there were wider revolutionary forces at work on the UK’s economy before the virus outbreak.

With issues such as Brexit, the rise of automation in the workplace, longer working lives, and poor UK productivity brought into even sharper focus, education and skills organisations, NCFE and Campaign for Learning (CfL), jointly commissioned the ‘Revolutionary Forces’ discussion paper.

Published on 6 July 2020, the collection of articles, penned by experts from the FE sector, as well as labour market economics, employment and mental health, urges Government to ensure that the plans outlined in the forthcoming post-16 white paper are sufficiently flexible to meet the immense changes faced by the UK economy throughout the 2020s. The authors explore some of the key challenges facing the nation throughout the 2020s which the DfE needs to take into consideration when writing their recommendations:

The authors are:

• Rt Hon. David Laws, Executive Chairman, Education Policy Institute – Covid-19: Mending the Economy, Repairing the Public Finances
• Paul Nowak, TUC – The Covid-19 Inheritance: Building a Fairer and Greener Britain
• Ewart Keep, Oxford University – Covid-19 and Brexit: The Impact on Industry, Jobs and Skills
• Duncan Brown, Emsi – Declining Sectors and Growing Sectors Post Covid-19
• Kathleen Henehan, Research and Policy Analyst, the Resolution Foundation – Low Pay, Flexi-Jobs and Skills-Based Immigration
• Andy Durman, Managing Director, Emsi UK – Automation, Covid-19 and the Future of Jobs