The new machine age: Britain must not miss out on the robot revolution

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Stian Westlake is executive director of research at Nesta.

MORE and more people are concerned about a wave of robots stealing their jobs. But for Britain, there’s a more pressing concern: what if the robot economy doesn’t arrive here at all?

For a while now, pundits have been speculating that robots, self-driving cars and clever algorithms will take many of the jobs now done by humans, from managing warehouses and driving taxis to processing x-rays and checking insurance claims. Recent research from the University of Oxford claimed that 36 per cent of British jobs were vulnerable to automation.

But before we worry about a robot job cataclysm, it’s worth looking at a different problem. There’s growing evidence that British businesses are lagging behind in investing in these new technologies. Research by the International Federation of Robotics shows that British manufacturers employ half as many robots as American ones, and less than a third as many as the Germans. We also trail France, Sweden, Japan, Korea and even Italy.

The UK’s puzzling productivity performance since the recession seems to bear this out. Britain’s economy has been remarkably good at creating jobs, but remarkably poor at creating GDP – the net effect being that productivity, which normally picks up handily after recessions, is still close to 2009 levels. This contrasts sharply with healthy productivity growth in the US, where the first rumblings of the robot revolution were observed.

The happy side to this story is that UK unemployment is lower than it would have been had businesses invested more in automation as the economy recovered. The problem comes in the medium term. If UK plc has been hiring cheap workers while our competitors have invested in robots and algorithms, British competitiveness will fall sharply as the machines get smarter. And the one thing that the last 10 years has taught us is that technology gets better very quickly indeed.

So before we start to worry about the effect of automation on jobs, we need to address the UK’s status as a robot laggard. The key to this is improving the climate for businesses to invest in new technologies and equipment.

The most obvious element is a tax regime that rewards business investment. We might look to Singapore, whose R&D tax credit extends to businesses that deploy innovative plant and machinery. Encouraging entrepreneurship is also important, since upstart firms thrive on the disruption that new production methods bring with them. A smart state can help too: it’s good to see that the government will this week announce a robotics strategy that has been developed with strong industry involvement.

Getting this right will help create a climate where British businesses are willing to invest in robots, algorithms, and the other wonders of the new machine age. Only then will the UK need to worry about the much-talked-about downsides of the robot revolution. These are, of course, not to be sniffed at.

If robots do replace lots of jobs quickly, the effects on people’s livelihoods will be serious and long term, as the examples of America’s Rust Belt or the Welsh Valleys show all too clearly. And if, at the same time, automation increases productivity, business owners could find themselves getting richer just as many of their workers are being laid off.

If and when this comes to pass, there are a number of things we can do.

The most extreme measure that has been proposed is a universal basic income – a salary paid by the government to everyone, whether they work or not. Although this idea has some unlikely defenders, ranging from Milton Friedman to Bertrand Russell, there are more moderate steps that may do the trick just as well.

The first is vigorous and determined action against monopolies. If competition flourishes, then the gains from automation will accrue to consumers, not just to business owners.

The second is to help create new jobs. In a world where robots do more and more routine work, opportunities should abound in fields machines find tough, like caring or creativity. A flexible, entrepreneurial economy will be more likely to create new jobs in these fields than a rigid and demarcated one. Since many of these jobs – for example in social care – are currently government-funded, we will need an adaptable public sector too.

The third is education. If machines will be everywhere, and creativity and humanity at a premium, our school system needs to teach children how to work creatively with technology, and to build character, drive and empathy.

If we can do these three things, the age of the robots need not fill us with fear. But first of all, Britain must invest to get there: because the only thing scarier than the robot revolution is missing the robot revolution entirely.

Stian Westlake is executive director of policy and research at Nesta, and editor of Our Work Here is Done: Visions of a Robot Economy, which can be read online at www.nesta.org.uk

City A.M.'s Opinion pages are a place for thought-provoking opinions and views. These are not necessarily shared by City A.M.

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