AI driven automation could widen inequality in the UK, study warns

Report finds widespread anxiety and uncertainty among workers

Thinktank research highlights the need for government action to assist businesses and workers through AI-driven transitions.

A new report on the future of work warns that the automation of millions of jobs through AI could exacerbate inequality in the UK unless the government steps in to support smaller businesses and employees navigating these changes.

The Institute for the Future of Work (IFOW) calls for urgent action from policymakers to help those at risk of losing their jobs or facing significant changes to their roles. The report stresses that without intervention, employers may face skill shortages, and workers could suffer declines in job satisfaction and wellbeing.

According to the IFOW, AI is set to become a key tool across industries, including manufacturing, office work, and public services, necessitating new skill sets. However, a survey of 5,000 UK workers revealed widespread anxiety and uncertainty about how AI adoption will affect their jobs.

Christopher Pissarides, a professor at the London School of Economics and the lead author of the report, urged the government to explore ways AI can enhance productivity and create new opportunities without increasing stress and widening regional divides. "How can AI deliver prosperity without exacerbating pressures on individuals?" he asked.

The three-year study, which also involved 1,000 businesses, found that while larger companies had started implementing strategies to mitigate the impacts of AI, many smaller enterprises struggled to adapt. These challenges include understanding how to transform their workplaces and identifying the skills and training needed for the future.

The report recommends establishing regional science centres, similar to London’s Crick Institute, to decentralise innovation in biotechnology and ensure high-paying jobs are distributed beyond the Oxford-Cambridge-London triangle.

Pissarides also suggested devolving decision-making to regional authorities and granting unions enhanced digital access, collective rights to information, and Treasury-backed e-learning initiatives. These measures would recognise the critical role unions play in fostering partnerships that benefit both employers and employees.

The report comes weeks after research from the World Economic Forum found that 41% of global companies planned to cut their workforces due to automation by 2030.