Artificial intelligence (AI) and employment

DOI: https://doi.org/10.58248/PN757

Artificial intelligence (AI) has developed greatly in recent years and can now perform tasks ranging from writing documents to controlling advanced robotics. These developments mean AI could significantly affect the UK workforce.

What are the recent developments in AI?

Recent progress in the AI field has included more powerful computing hardware and large language models (LLMs) capable of handling complex tasks. However, AI systems face limitations such as bias, difficulty managing unfamiliar situations, and opaque decision-making processes, which can undermine reliability and trust.

How widely is AI used in the UK workforce?

While AI is being increasingly adopted in the UK, the overall level of AI use remains uncertain. Larger firms and sectors like finance and technology show higher uptake, while smaller businesses and industries such as healthcare and hospitality show lower uptake. Potential productivity gains and cost savings have driven uptake in some areas, but challenges including limited expertise, high costs and regulatory uncertainty have held it back in others.

Current AI uses span a broad range of tasks in both the public and private sectors. These include writing computer code, language translation, road repairs, fraud detection, forecasting orders and monitoring machines for wear or breakage.

How is AI affecting work and the workplace?

Economists have predicted that mid-to-high income roles, such as software engineers, are more likely to be exposed to AI than lower income roles, such as construction labourers. Whether exposure to AI leads to employment loss or growth, and rises or suppression of wages, depends on how AI affects the expertise required for a job role. Jobs are also more likely to be partially automated rather than entirely replaced.

Employees can be affected by AI use outside their own job roles. For example, employees could be affected by managers using AI tools for workplace supervision.

Evidence of widespread job loss due to AI is limited, although specific losses have occurred for some roles. Some studies suggest that early career roles may be particularly affected by AI. However, these studies have also suggested that AI is not necessarily the sole cause of declines in early career employment.

While AI may cause job losses, it could also create new roles, particularly in technology and data-related fields. The extent to which a region is prepared for AI, such as through the availability of AI skills and training, could influence the number of jobs created.

While AI can improve productivity for specific tasks, such as aspects of computer programming, it is unclear whether AI is creating broad economic gains. Some organisations report limited returns on investments in AI, and poor implementation may hinder improved productivity. Other evidence indicates that AI could also increase the amount of low-quality work that requires correction.

Working conditions are also changing. AI can undertake routine or repetitive tasks and improve safety, but it may increase work stress and reduce employee autonomy. AI-driven management tools used to monitor and evaluate workers have led to concerns about fairness and transparency.

Will AI increase inequalities?

AI may exacerbate inequalities. For example, wealth inequality could rise if benefits from greater productivity are distributed unevenly. Bias in AI systems can also lead to discriminatory outcomes based on characteristics such as gender, race, age and disability.

What is the government’s response to AI?

The UK Government’s response to AI has focused on building infrastructure, boosting investment, and developing skills. Its AI Opportunities Action Plan includes expanding public AI hardware capacity twentyfold by 2030, alongside encouraging private investment through initiatives like the US–UK Tech Prosperity Deal (£30 billion committed by major tech firms). To address skills gaps, the government has announced a £187 million investment in digital and AI education.

The UK does not have any AI-specific legislation, and AI governance takes place through existing regulators, non-statutory principles and targeted legislation. However, the UK Government has previously said it intends to introduce legislation on AI.