Wednesday 18 September 2019 12:45 am

UK must adapt to automation or firms will suffer, MPs warn

MPs have warned that British businesses could lose out to foreign competitors if the country fails to quickly adopt new technologies such as automation, and have called on the government to take action.

Read more: Robot rollout: Number of businesses using automation doubles in 2019

Parliament’s Business, Energy and Industrial Strategy (BEIS) Committee said the government should launch a robot and artificial intelligence (AI) strategy by the end of 2020 and introduce a new tax incentive to encourage investment in new technology.

In a report on automation and the future of work, the committee said the UK’s slow pace in moving to automation – the UK ranks 22nd worldwide in number of robots per person – “has allowed other countries to steal a march” in what they call a new “industrial revolution”.

The report said that a failure to quickly take up new technologies has contributed to Britain’s crisis in productivity, which has flatlined since the financial crisis and risks making UK firms less attractive than foreign rivals.

The report recognised that jobs are at risk from automation: one widely-cited report has said that 47 per cent of jobs in the US could be automated. Yet it said technology could help people work less and warned if the UK fails to adapt then “businesses, investment and jobs will move overseas”.

Committee chair and Labour MP Rachel Reeves said a “UK robot and AI strategy” must “help to provide the support needed for British businesses, universities and research centres to succeed”.

“The government should work with universities and businesses to provide the advice, networking, and access to finance necessary for the UK to reap the benefits of domestic tech success stories.”

She said that “too often” these businesses “get snapped up by overseas investors”. The report cited the example of Cambridge-based semiconductor firm Arm Holdings, which was bought by Japanese investor Softbank.

One of the report’s main suggestions was “a new tax incentive designed to encourage investment in new technology, such as automation and robotics”. It argued that this would help small and medium-sized businesses adapt, pushing up productivity.

Read more: Workers waste millions of hours a year because of poor technology

The MPs also called for the government to launch a fully-funded UK-wide advice and information scheme to better inform businesses about new technology such as robots that could help their businesses. It criticised the decision to close the manufacturing advice service in 2015.

The Department for Business, Energy and Industrial Strategy (BEIS) has been approached for comment.