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Ben Dellot

Head of the RSA Future Work Centre

Seven ideas to help society survive the new machine age

Who are we supposed to believe? Almost four years ago a University of Oxford study predicted that 35 per cent of UK jobs are at risk of automation. McKinsey more recently put the figure at 5 per cent. The OECD says it’s closer to 10 per cent, while PwC reckons as many as 30 per cent of jobs are at threat.

Whichever prediction you stand by, the overriding impression is that AI and robotics will change the face of work beyond recognition. It is easy to imagine self-driving cars pushing the country’s 232,000 taxi drivers out of business, just as it is believable that self-service checkouts will dismantle the jobs of 1.1 million retail assistants.

But we shouldn’t lose hope just yet. An RSA report published in partnership with Google this week argues that new technologies are more likely to transform jobs than to eliminate them – and often for the better.

Machines can relieve manufacturing workers of hazardous jobs, algorithms can enable doctors to offer more appropriate treatments for patients, and robotic systems can help overburdened social care workers with physical tasks like carrying and lifting patients.

Undoubtedly some machines will deskill jobs, reduce worker bargaining power and depress earnings. But others equally promise to boost productivity, open the door to higher wages, phase out mundane work and let human-centric jobs prevail.

Let us not forget what the labour market looks like today. While work is plentiful, it is not particularly rewarding. Average wage growth is the slowest in 150 years with the result that 7 million people in working households live below the poverty line. Our productivity rates are also abysmal. It takes a UK worker three days to produce what it takes a German worker two days.

The problem is not that our economy is embracing AI and robotics too quickly, but rather too slowly. Our RSA/YouGov poll found just 14 per cent of UK business leaders have invested in this technology or soon plan to. Contrary to colourful newspaper headlines, most employers are not paying attention to innovations in machine learning, deep learning or advanced robotics. Economic facts belie the sensational science fiction.

The challenge therefore is to accelerate the adoption of this technology but in a way that delivers automation on our own terms. The merits of a universal basic income are already being debated. Yet we must go further, from ethical frameworks that can guide the behaviour of AI and robotic engineers, to personal learning accounts that would aid lifelong learning, to a sovereign wealth fund that could invest in technology on behalf of the public.

Here are seven ideas to get us started:

1. Establish personal training accounts to boost lifelong learning

As machines become more sophisticated, so must the UK workforce raise its game. People must be supported to retrain as occupations rise and fall in prominence. The government should pilot personal training accounts along the lines of those being deployed in France and Singapore. These would give every worker a modest annual stipend to spend on accredited training courses. Unlike the existing Apprenticeship Levy system, it would be open to the self-employed and be a better fit for gig workers that have no discernible employer. 

2. Create an ethical framework for AI and robotic engineers

The late economist Sir Anthony Atkinson used to say that “too often technology is discussed as if it has come from another planet and has just arrived on Earth”. The reality is that society can and should shape the development of machines, including by eliminating potential flaws as they are being designed. Progressive elements of the tech community should take a lead on drafting and signing up to ethical frameworks that would steer engineer behaviour, as the IEEE trade body has done in the US.

3. Encourage employers to co-create automation strategies with staff

Earlier this year, the insurance company Aviva asked 16,000 of its employees whether their job could be automated. Those who answered “yes” were offered the opportunity for retraining. We need more employers to be open with their workforce about how they plan to use AI and robotics and work with staff to redesign job roles and retrain for new positions. Not only are co-creation strategies beneficial to workers, they also mean new technologies are integrated at a faster pace with greater returns for businesses.

4. Build a new social contract around the principles of flexicurity

Against the backdrop of automation, how can we give workers a more robust safety net while retaining the flexibility that encourages employers to take on staff? Answers can be found in Denmark’s flexicurity model. Here, employers have greater freewill to hire and fire employees, but workers are entitled to up to 90 per cent of their previous salary as they search for jobs, and are supported by a generous training regime. The result is that a quarter of Danes in the private sector switch jobs every year, leading to better job matching.

5. Shift the tax burden away from labour and towards capital

If machines do become more important as a source of income in our economy, it is reasonable to shift some of the tax burden away from labour and towards capital. The government must keep the ‘employment wedge’ – the non-wage costs of taking someone on as an employee – as low as possible. The suggestion by Bill Gates of a ‘robot tax’ is impractical (is a dishwasher a robot?) and would diminish incentives to purchase technology. More sensible would be a gradual rise in taxes on immovable property or inheritances.

6. Draft a blueprint for a UK sovereign wealth fund

We need to begin a conversation about who owns the machines and how to distribute their proceeds more fairly. A publically owned sovereign wealth fund could be set up to invest in company assets and emerging technologies, which could then pay out dividends once it has reached maturity. These dividends could be in the form of a continuous payment (as is the case with the Alaskan SWF) or a one-off grant (what might be called a ‘technological inheritance’). As Yanis Varoufakis has suggested, such a fund could be initially financed by siphoning off shares from every company IPO.

7. Expand company profit sharing schemes

A more direct way to spread the ownership of machines is by expanding company profit sharing initiatives. This would be of little use to those who lose their job to technology, but it would boost the incomes of the vast majority who remain in post. Only 8 per cent of UK workplaces (with 10+ employees) are thought to operate profit sharing schemes. The government could establish a new ‘Right to Own’ rule – as the Labour Party has suggested – which would give employees of a company first refusal on purchasing shares up for sale.

Amidst the frenzied speculation of job destroying robots, it is easy to forget that automation is a good problem to have. While for most of human history our troubles have centred on material scarcity, the new machine age promises to bring about an era of unprecedented abundance – more than enough to meet everyone’s needs. The question is whether we have the political courage and conviction to share that wealth wisely.

Ben Dellott is the associate director for economy, enterprise and manufacturing at the RSA and authored its The Age of Automation report, which was published this week.