UK Jobs in Peril from AI, Warns Think Tank

Without action, the Institute for Public Policy Research (IPPR) has warned that artificial intelligence (AI) could replace up to 8 million jobs in the UK. The think tank's first-of-its kind analysis on the impact of generative AI on the labor market indicates a pivotal moment for the country, with possibilities for significant job disruption or substantial GDP gains depending upon government policy.

Generative AI can both read and create text, software code, and data. It presents two key stages of adoption: an initial wave, which is currently underway, and a second wave, where companies will further integrate existing AI technologies into their processes.

IPPR's analysis, which encompasses all job types in the economy, reveals that 11% of worker tasks are already part of this initial wave. These tasks include 'routine cognitive' activities such as database management as well as 'organizational and strategic' responsibilities like scheduling or inventory management.

However, exposure to AI could increase to encompass 59% of all tasks during the second wave. This would also affect non-routine cognitive tasks such as creating and maintaining databases and increasingly higher-earning roles.

The study suggests that back-office roles, along with entry-level and part-time positions, are most vulnerable during this first phase, including secretarial work, customer service agents, and administrative staff. Women who tend to occupy these types of jobs may bear more brunt from this shift, leading them to be among those most affected, according to report findings.

Young individuals face high risks too, as firms hire fewer people for entry-level positions instead opting for AI technologies. In addition, those earning medium or low wages stand at greater risk from replacement by AI technology.

The IPPR modeled three potential outcomes based on varying policy choices:

1) Worst-case scenario: full displacement: All jobs at risk get replaced, resulting in approximately 7.9 million job losses without any GDP gain.
 
2) Central scenario: Around 4.4 million jobs disappear, but with an economic gain of 6.3% of GDP (£144 billion per year).
 
3) Best-case scenario: full augmentation: All at-risk jobs get augmented to adapt to AI, leading to zero job losses and boosting the economy by 13%, or £306 billion per annum.

While AI deployment could lead to significant wage gains for workers in some cases, it might also result in no increases whatsoever. However, it does present an opportunity for labor reallocation towards filling gaps related to neglected social needs like mental health services or social care, which are currently under-resourced.

The IPPR highlights that there is no single predetermined path as far as the implementation of AI in the labor market goes and urges intervention so that economic benefits can be widely spread instead of being concentrated among a select few.

Without government action and if companies are left unchecked, the worst-case scenario becomes a very real possibility, warns IPPR. The think tank advises that the government develop a job-centric industrial strategy encouraging transitions into new roles while ensuring wide dissemination of automation benefits across all sectors of the economy.

Senior economist at IPPR Carsten Jung stated: "Generative AI has potential either to cause major disruption on labor markets or significantly boost economic growth; either way, it will be transformative for millions."

He added, "It's less about whether AI can be useful now but more about how quickly employers will adopt this technology and in what manner they will use it."

"But technology isn't destiny," he insisted, adding that governments and unions have crucial design decisions ahead to manage this new technological shift well; otherwise, it might already be too late."