According to a new study conducted by Morgan Stanley, an investment bank based in the U.S., the UK is facing the brunt of job losses due to artificial intelligence in comparison to other developed economies like Australia, the U.S., Germany and Japan.
Firms in Britain revealed that about 8% of the jobs in the country had been lost to AI over the last year. This magnitude of job losses is far higher than the number of jobs being lost to AI in other large economies. This percentage of job losses reflects the net balance after jobs created by AI are subtracted from the total number of jobs lost due to the adoption of the technology.
The companies surveyed during this research were in the consumer staples and retail, transport, automotive, real estate and health care equipment industries. The enterprises surveyed had used artificial intelligence for at least one year. These firms reported an average of 11.5% productivity gains as a result of deploying the technology. These gains mirrored what firms in the U.S. also reported as the benefits of using AI.
However, the difference is that the technology helped to create more jobs than it replaced in the United States while the UK saw more jobs being lost than being created. For the UK, the job market was further pressured by the tax regime and higher costs of operation.
In the UK, unemployment is currently at its highest level in 4 years. Increases in employer contributions to national insurance plans and hikes to the minimum wage have made employers wary of taking on more workers.
The firms that participated in the Morgan Stanley study revealed that entry-level jobs, such as those requiring 2-5 years of experience, were the ones most likely to be downsized and replaced by AI. This reality means that younger workers, such as those who are freshly out of school, face the highest risk of AI-linked unemployment over the coming years.
Sadiq Khan, London’s mayor, echoed these concerns earlier this month and warned that the city faces mass unemployment as AI adoption deepens. Khan bases his grim prediction on the fact that the city’s job landscape is dominated by white collar positions in marketing, consulting, law and accounting as well as in the creative industry and finance. These jobs are the easiest to be replaced by AI since they are knowledge-based.
While concerns may be growing about the possible loss of many jobs due to AI, the findings from the U.S. show that this technology can create a lot more jobs than it displaces. Tech firms like Apple Inc. (NASDAQ: AAPL) can therefore be seen as creating a lot more value overall instead of focus being centered around the employees whose positions are at risk of being taken over by AI.
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