A recent
PwC report (PDF) exploring the impact of Artificial Intelligence (AI) over the next 15 years offers some interesting detail on which industries and which demographics in the UK will be most affected.
The AI revolution
The AI revolution comes in three waves:
- Algorithm wave: focused on automation of simple computational tasks and analysis of structured data in areas like finance, information and communications – this is already well underway.
- Augmentation wave: focused on automation of repeatable tasks such as filling in forms, communicating and exchanging information through dynamic technological support, and statistical analysis of unstructured data in semi-controlled environments such as aerial drones and robots in warehouses – this is also underway, but is likely to come to full maturity in the 2020s.
- Autonomy wave: focused on automation of physical labour and manual dexterity, and problem solving in dynamic real-world situations that require responsive actions, such as in manufacturing and transport (e.g. driverless vehicles) – these technologies are under development already, but may only come to full maturity on an economy-wide scale in the 2030s
For most countries in the report, including the UK, the second wave brings the greatest job disruption. This is because it hits administrative jobs particularly hard; the backbone of many industries, especially services.
Transport and storage, manufacturing, wholesale and retail trade, and financial and insurance are particularly vulnerable to AI overall, which ties in with the Centre for Cities report last month.
This is not to say that all of the ‘at risk’ workers will lose their jobs entirely – the figures don’t account for extra jobs created by the waves, or by the additional wealth in what will be a larger economy.
Which industries and roles?
Each wave affects different industries differently, and it is worth seeing the full breakdown in the report. For example, the worst-affected are machine operators and assemblers, who face a risk of over 60% to losing their jobs, but not until the third wave. These are followed closely by clerical workers, who face a 50% risk but the bulk of which occurs during the second wave.
The roles that present a lower risk are professionals, senior officials and managers (who face a risk of less than 10%).
Which demographics?
PwC also analysed the impact of the waves on different types of worker. For example, women are expected to do worse during the first two waves, but men suffer more job losses overall. Interestingly, there is little difference between age groups.
The single biggest effect lies in education. The higher your education level, the less risk you face. If you think about it, the effect is staggering. Those with fewer opportunities and flexibility have the highest risk of losing their jobs. In essence, the impact of AI could be increased inequality.
Remember that the study does not account for additional jobs created by AI. Nevertheless, this emphasises the need for solid education for young people, continued government and private-sector investment, and lifelong learning.
What about the finance industry?
AI is set to make a third of jobs at risk in finance and insurance. Again, the biggest effect is during the second wave, as algorithms overtake humans at more and more tasks.
The biggest potential is in personalised financial planning (e.g. Nutmeg or Moneybox), fraud detection (e.g. Feedzai) and anti-money laundering (e.g. Onfido), and automating processes in both back-office and customer-facing operations (e.g. Luminance).
If you would like to learn more on this subject, we recommend the 11:FS podcast on the future of personal wealth platforms.
This article was written by Nathan Dudgeon.