Artificial intelligence, automation and other technological changes are among the biggest economic issues of our age. They featured in the opening remarks of the Chancellor’s 2017 Autumn Budget speech and are identified as one of the ‘Grand Challenges’ in the Government’s Industrial Strategy. Politically, the continued fallout from the 2016 EU referendum and ever-increasing globalisation continue to dominate and divide urban Britain.
As well as providing the definitive economic health check of the 63 largest urban areas in the UK, this year’s Cities Outlook 2018 gives a picture of urban Britain today – exploring the economic and political divides across the country and how they relate. It then looks at what the future holds in store for cities, by discussing the potential impact that automation could bring on city economies – and whether or not these divides will be compounded.
By looking at the types of jobs currently available in cities and at those occupations predicted to grow as developed in Nesta’s recent report ‘The future of skills: employment in 2030‘, Cities Outlook 2018 maps out which cities are most at risk of losing jobs to automation, and which cities are less vulnerable to these changes. It finds that it is those cities with relatively weak economies in the North that are vulnerable to job losses, with cities in the South at relatively less risk. Significantly, it also finds that it is the same cities which are most at risk which also voted to leave the EU and are more dependent on welfare.
Yet, despite scare stories and the likelihood of job losses, the report finds that all cities are likely to see an increase in jobs across both the public and private sectors – thus replacing any jobs lost to new technology. Similarly, it finds that such changes are not new and cities have been exposed to automation and globalisation for over a century and almost all of them have seen jobs growth since 1911.
- Generally, those jobs that are made up of routine tasks are at a greater risk of decline, whereas those occupations requiring interpersonal and cognitive skills are well placed to grow.
- Overall, one in five jobs in cities across Great Britain is in an occupation that is very likely to shrink. This amounts to approximately 3.6 million jobs, or 20.2 per cent of the current workforce in cities.
- In places like Mansfield, Sunderland, Wakefield and Stoke almost 30 per cent of the current workforce is in an occupation very likely to shrink by 2030. This contrasts with cities such as Cambridge and Oxford where less than 15 per cent of jobs are at risk.
- While big cities are relatively less exposed to occupations likely to shrink, they are likely to see a great deal of disruption. For example, London and Worthing have a similar share of jobs likely to see a decrease in demand (16.1 per cent in London, 16.0 per cent in Worthing), but this translates to around 908,000 jobs in London – 25 per cent of all jobs at risk in cities across Great Britain – and only 8,400 jobs in Worthing, which is just 0.2 per cent of all jobs at risk in cities.
- All cities are likely to see jobs growth by 2030 and around half of this will be in publicly funded occupations. Yet, looking at the private sector, there is more variation – some cities (mainly in the South) will see many more high skilled private sector jobs growth, whereas others (mainly outside of the South) will see a growth in lower skilled private sector work.
Implications for policy
This year Cities Outlook finds that the economic divides that currently exist between cities in the Greater South East and those outside of that region are likely to become more stark in the years to come as more jobs are at risk of being lost outside the South, and lower-wage, relatively less productive lower skilled jobs will likely continue to dominate in these cities. It finds:
- Policy did not adequately support those cities that have suffered significant job losses to previous waves of automation – seeing job gain in relatively lower skilled, low wage occupations
- For struggling cities in particular, policy needs to create the conditions that support the development of knowledge, and the use and exchange of it. A key element of this will be to provide their residents with the skills they need to be successful in a labour market that is likely to be ever more dominated by non-routine work.
- Policymakers should also prepare the workforce of the future by giving younger generations entering the labour market the right set of skills and knowledge to succeed in the jobs of the future.
- The current workforce should be given adequate resources to adjust to changes in the labour market.
- Those least able to adapt need to be given adequate compensation for their job loss but should also be given retraining.
For a summary of the findings, take a look through this SlideShare: