Tech always provides new jobs. Why should this time be any different?

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Tech always provides new jobs. Why should this time be any different?

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Are all our jobs really going to be taken by artificial intelligence and robotics? Throughout history, technological change has always brought new job opportunities. Why should this time be any different?

By Mark Richards

We ended last week by looking back on a confusing few days for the British economy – a puzzling mixture of good and bad news – and asking what it meant for all our job prospects.

Well, if you work in retail, or you own a shop, then the news this morning could not be worse. According to the British Retail Consortium (BRC), March and April saw an “unprecedented” decline in footfall – the number of people visiting the nations’ shops. Over the two months, footfall was down by 4.8%.

The town centre vacancy rate – the number of empty shops – rose to 9.2% with every area of the UK (except Central London) reporting an increase. A spokesman for the BRC said,

“Not since the depths of the recession in 2009 has footfall over March and April declined to such a degree. Even then the drop was less severe at 3.8%.”

But in 2009 online shopping was still in its infancy. What did I do over the May Day weekend? Looked at the BBQ I forgot to clean at the end of last summer, decided it was simply too disgusting, went inside and ordered a new one. In 2009 a new BBQ would have meant sitting in the Bank Holiday traffic and queueing to get into B&Q: I would have got on and cleaned it.

So maybe what we are seeing is not the death of retail, but simply change. In 1879 Edison invented the long-lasting electric bulb. A few years later the British Candlemakers’ Consortium would undoubtedly have been complaining about an “unprecedented” drop in demand.

‘But,’ say the prophets of doom, ‘This time it definitely is different. Artificial intelligence, robotics, there has never been change like this before…’

Is that really the case? Are all our jobs really going to be wiped out? It is Monday morning so let us start the week optimistically. As Lance-Corporal Jones from Dad’s Army would have calmly put it, “Don’t panic, don’t panic.”

An apology

You probably do not want a large dose of economic theory to start the week: I am sorry, but bear with me. It is necessary to understand the worries about AI, robotics and ‘fintech’ (financial technology). I promise I will deal with it in less than 50 words.

The theory in question is the ‘Lump of Labour’ theory: there is a finite amount of labour (the ‘lump’) that needs doing. If new machines are invented that do some of that labour, then jobs are necessarily lost.

That’s the theory. But as we have seen throughout history, new inventions and new technology creates new jobs. Yes, the motor car did serious damage to the ‘horse economy’ – blacksmiths, saddle makers and dung collectors (yes, really): but it created panel beaters, paint sprayers and mechanics.

Similarly – as we have written previously – artificial intelligence and financial technology (aided by blockchain) are going to spell the end of the high street bank. “Working in a bank, sir,” will no longer be an acceptable answer to your careers master. But, according to the latest forecasts, fintech will create 100,000 new jobs by the end of the next decade – and the panic over artificial intelligence has been significantly overstated.

Tech always provides new jobs. Why should this time be any different?

AI: it will not be the crisis that has been predicted

There has been widespread concern about the impact of AI and robotics – the so-called Robocalypse – leading to calls for everything from a tax on robots to a universal basic income.

The worst claims – from two American economists – suggest that 47% of all jobs could disappear. Using the same methodology the Organisation for Economic Co-operation and Development (OECD) puts the figure at closer to 10%.

That is still a massive figure – in round numbers, there are 32m people employed in the UK. The social and economic consequences of 3.2m people becoming unemployed do not bear thinking about

But history suggests that new technologies will always bring new jobs. Go right back to 1841 and the first census showed that 20% of the UK’s population was engaged in agriculture, and another 20% were in domestic service. Today we have more people employed than ever before and the numbers involved in health, caring for the elderly – even fitness trainers and hairdressers – are increasing all the time. And none of those is a job that is likely to be replaced by AI or a robot any time soon.

Fintech to create 100,000 jobs by 2030

Inevitably any predictions for the year 2030 need to be taken with a pinch of salt – but in 12 years’ time we will all be banking, saving and investing on our mobile devices – and financial technology will be driving it all.

Research by Innovative Finance and WPI Economics has suggested that fintech is set to grow to more than 100,000 employees by 2030 with the number of companies in the sector increasing to 3,300.

The jobs will be highly skilled – emphasising the point we made last week that the best way to give yourself job security is to never stop learning. The report also makes the point that the sector will be dependant on a flexible immigration policy, allowing British companies to attract the best talent from all over the world as the ‘war for talent’ is fought ever more fiercely.

Change is undoubtedly happening at a faster pace than ever before, but change does not necessarily equal bad news. The old cliché about the Chinese word for ‘danger’ also meaning ‘opportunity’ may not (sadly for business trainers up and down the land) be true, but the coming technological changes will offer a lot of new businesses tremendous opportunities. By 2030 there will not only be new jobs in fintech, there will be new jobs in several other sectors as well: no-one of my generation left school wanting to be a web designer, software engineer or even a content writer…

By | 2018-05-30T10:09:30+00:00 May 14th, 2018|Business, Personal Finance, Technology|0 Comments

About the Author:

A previous financial services business owner, Mark is an experienced Journalist Speaker, Speechwriter and Coach. He has written for a number of websites related to the financial sector and won numerous awards. Mark has also published a number of books.

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