AI brings not a threat but an opportunity

Should we fear the march of the machines? Andy Haldane, the Bank of England chief economist, thinks we should be wary at the very least. He told the BBC that the rapid growth of artificial intelligence (AI) will make many jobs obsolete with far-reaching social and cultural consequences. He predicted a “Fourth Industrial Revolution” on a scale greater than anything seen before. “Each of those [previous industrial revolutions] had a wrenching and lengthy impact on the jobs market, on the lives and livelihoods of large swathes of society,” Mr Haldane said.

There is a distinction to be drawn between the short and long-term impacts of such upheavals. The western world has become immeasurably wealthier since farming techniques drove millions off the land and labour-saving automation took hold at the end of the 18th century. The increased prosperity that followed cannot be gainsaid though economic historians argue over when real living standards really began to rise for the majority. The period of transition was marked by social unrest and repression both here and on the continent.

But it remains the case that significant technological advances, whether they be the coming of the railways or the arrival of the silicon chip, have been accompanied by economic growth and higher per capita GDP.

Arguably, we have been too slow to adapt to automation in the UK, with too many jobs that could be mechanised still being carried out manually. This is one reason behind the UK’S poor productivity and sluggish wage growth, which have been the hallmarks of the economy in recent years. Stopping automation or taxing it as Labour threatens to do would stifle investment and worsen the country’s competitive position.

Mr Haldane is right to say we cannot be sure whether the new machine age will destroy jobs or create new ones and on what scale; but seeking to stop it, as history shows, would be foolish and futile. Although AI will have a significant impact on manual work, many of the jobs likely to go will be middle-income posts in service industries – but these will be people who can adapt to new challenges. Rather than stand in the way of progress, governments should ensure that their policies are geared towards encouraging the uptake of new skills and retraining. Automation should not be considered a threat but an opportunity.