This is the third article in a five-piece series on how the Conservatives must seize the opportunities presented by new technologies transforming our economy and society. This article was first published on 25 October and can be found here.
Futurists, like Silicon Valley entrepreneur Elon Musk, regularly talk about the risk that artificial intelligence (AI) and robotics will trigger a mass wave of automation, causing unemployment as machines replace people. The PayPal founder predicts that in the future there will be “fewer and fewer jobs that a robot cannot do better [than a human]”.
Musk is among a growing number of commentators concerned that what the economist John Maynard Keynes termed “technological unemployment” – machines replacing workers – will be different in the Fourth Industrial Revolution (4IR) from what has come before. In many ways, he is right.
For many industries this will mean a paradigm shift in the kind of tasks that can be done better by machines. While the debate over London’s taxi industry and the gig economy grabs headlines in Westminster, tech firms like Tesla and Uber have already moved on to the next phase: they’re now competing with traditional vehicle manufacturers to quietly eliminate thousands of jobs in the transport and logistics industry. In 2016, Uber’s “Otto” self-driving truck successfully delivered 50,000 cans of Budweiser on a 120-mile trip down a highway in Colorado. To put that into context, there are more than 250,000 lorry drivers employed in the UK.
Meanwhile, companies such as Amazon are developing autonomous distribution centres, where with the click of your mouse at home, a product is bought, processed, packaged and delivered, all without the need for a single human. Across the wider economy the Bank of England has warned that up to 15 million jobs are at risk of being lost to the 4IR’s new machine age.
However, it is important not to lose sight of the wider historical context: roughly 50 per cent of jobs in the US economy have been replaced with new forms of labour every 60 to 90 years. And as innovation and new technology have restructured the labour market, conditions and pay have also improved. Compare the terrible conditions faced by the average British worker in the Victorian era, when workplace fatalities were 30 times higher than today, to an automated production line and the highly-skill engineering and product design jobs that are needed to sustain it.
That’s why it is vital that we Conservatives embrace new technologies and ensure the British people do not see the 4IR as a binary choice between innovation and jobs. It need not be about replacing humans with machines, but combining the capabilities of both. For example, over the last 25 years the Siemens factory in Amberg, Germany, has been transformed into a fully digital “smart factory” with almost 75 per cent automation of the manufacturing process. This has produced an almost 1000 per cent increase in productivity – yet the workforce has remained the same size.
We must stop thinking of technology as the enemy of employment – and start preparing our workforce of today and tomorrow to succeed in the 4IR’s new economy. As Conservatives we have a vital role to play in selling this positive vision of the 4IR as an opportunity to empower workers. We must convince voters that the 4IR means a new generation of tools that will boost productivity and automate repetitive administrative tasks while freeing human workers to re-train and add value in other ways.
The alternative is a dangerous, Luddite, trade union-focused agenda led by a left-wing Labour Government, which would stifle innovation, destroy jobs and mean Britain misses out on the benefits of the 4IR. Jeremy Corbyn is already setting out an agenda for heavy-handed intervention in the economy – from taxing robots to mass nationalisation – fuelled by a dystopian narrative he has created that places workers in opposition to machines and raises the spectre of mass unemployment.
Conversely, we Conservatives must harness the 4IR to help people do their jobs better, rather than simply replacing them. These efficiencies should not be limited to the private sector, and we should use innovation to help us solve the puzzle of how to fund increasing demand for public services, without exploding the deficit or increasing taxes. For example, Conservatives should pledge that, once the deficit has been eliminated, every administrative role abolished by automation in the public sector will be mean more funding made available for front-line staff: more doctors, nurses, police officers, and teachers.
However, we must also confront the reality that, just as every industrial revolution that has preceded it, the 4IR will bring significant disruption to our labour market. We must respond with a renewed focus on education and skills policy, to help Britain meet the challenge of automation. Alongside the Government’s existing work, this should include:
- Conducting a Future Skills Review (FSR) at the start of each Parliament, taking a strategic look at what skills are currently being automated out of the job market, and evaluating the readiness of our education and training system to prepare our workforce for the jobs of the future. Just as the Strategic Defence and Security Review (SDSR) examines the country’s longer-term defence requirements, and the Comprehensive Spending Review (CSR) sets out our spending priorities, a new FSR would look at how we future-proof our skills base.
- Re-examining the case for ideas like lifelong learning accounts for individuals, or employee training tax credits for businesses, to incentivise workers and businesses to engage in a continuous process of skills development; and
- Exploring whether our 2017 manifesto pledge for a National Retraining Scheme for people whose jobs are threatened by technological change can be delivered despite the election result.
While skills are of vital importance – and we must prepare workers for the changes ahead – as Conservatives we must respond to automation by being frank with voters about the scale and speed at which technology is likely to reshape what it means to have a job in Britain. We must not be tempted to prop up failing industries that are unable to compete with disruptive technologies, or limit innovation with overly burdensome regulation.
Instead, Conservatives should act as passionate advocates for the benefits that new technology will bring to our economy. The 4IR should not be framed as people versus machines. It can – and should be – people empowered by machines.
This positive vision sets us Conservatives apart from Labour’s pessimistic message, focused on spreading fear of technology amongst voters. Banning Uber in London is just one example.
Through a relentless focus on skills, we can face up to the challenges that AI and automation will bring to the jobs market, harnessing the power of technology to create new jobs and future-proof our economy.