AI and Automation Are Redefining Work. But the UK Can Still Shape a Fairer Future
Research by economists Daron Acemoglu and Pascual Restrepo offers key insights into this transformation. Their studies show that while automation can raise productivity and drive economic growth, it also risks displacing workers by substituting human labour. At the same time, new technologies create novel tasks and jobs. This dual dynamic—displacement and creation—means the overall effect of innovation on employment and wages is far from straightforward. Technological change, they argue, has triggered a race between man and machine, influencing factor shares and widening income inequality.
Evidence from the US labour market illustrates these trends. Between 1990 and 2007, rising robot density was linked to a 0.2 percentage point drop in the employment-to-population ratio and a 0.42% decline in wages. These effects were most pronounced in areas with high robot adoption, with no pre-existing trends suggesting other causes. Such findings suggest that industrial robots exert a distinct impact on jobs and wages, separate from other forms of capital investment.
More recent analysis of job postings since 2010 points to a rise in AI-related roles, coupled with a decline in hiring for non-AI positions. This pattern signals a growing substitution of human labour in certain tasks. However, these shifts have yet to reshape aggregate employment figures, suggesting that AI’s broader impact on the labour market remains in an early phase.
While these developments pose challenges, they also present opportunities. When managed effectively, digital transformation can drive firm growth, innovation and productivity. AI is increasingly being used to support environmental, social and governance (ESG) goals—improving resource allocation, enabling green innovation and promoting sustainable business practices.
For the UK, the priority is to encourage innovation while supporting workers through transition. Investment in reskilling and upskilling is essential, as is the responsible deployment of AI in ways that integrate ESG principles. By aligning digital strategy with inclusive economic planning, the UK can position itself as a global leader in responsible AI.
The evidence is clear: automation and AI are changing the world of work. But their consequences are not fixed. Through thoughtful policy and strategic leadership, the UK can manage the risks, harness the benefits and steer towards a future where technological progress goes hand in hand with equitable growth.
Created by Amplify: AI-augmented, human-curated content.
