The rapid automation of millions of jobs by artificial intelligence could exacerbate economic inequality across the UK unless the government intervenes with targeted support, according to new research by the Institute for the Future of Work (IFOW).
The three-year report found that businesses and workers alike face a wide range of challenges, from rising skills gaps to concerns about job security and well-being, as AI-powered systems become more common in factories, offices and the government sector.
Christopher Pissarides, Nobel laureate in economics and lead author of the report, warned that while AI has the potential to boost productivity and growth, ministers must address its implications for the workforce. He asked how AI can promote productivity and prosperity without creating too much pressure and stress, and how it can open up new opportunities without widening existing divisions across the country.
IFOW surveyed 5,000 employees and 1,000 businesses, finding a pervasive sense of anxiety, fear, and uncertainty among employees about the impact of AI. While some large companies have developed strategies to help employees adapt, small businesses seem less equipped to navigate the coming wave of automation. The report states that, without major interventions, job losses and significant job changes may disrupt local economies and social structures.
Among its proposals, IFOW recommends the creation of scientific centers inspired by the Francis Crick Institute of London in regional cities, a move aimed at preventing London and the Oxford-Cambridge arc from dominating biotech and other fast-growing sectors. The authors also call for more decision-making powers to be transferred to local authorities and to strengthen the role of unions, including giving them digital access, information collection rights, and new e-learning roles. These measures, they say, will support workers during the AI ​​revolution.
According to James Hayton, professor of innovation at Warwick Business School and contributor to the report, the impact on jobs, skills, and quality of work comes down to how AI is used. He believes that firms and managers have an important role to play in introducing AI in ways that improve employee well-being and overall productivity, rather than viewing automation as a cost-cutting measure. The report concludes that with thoughtful governance and responsible deployment, AI can promote an inclusive labor market. However, failure to act can exacerbate social divisions, reduce productivity gains, and undermine the opportunities for small businesses and their workers.