Analysis by the Department for Education’s Unit for Future Skills to try and quantify the impact of AI on the UK jobs market found the finance and insurance sector was more exposed than any other.
The Analysis
“The impact of AI on UK jobs and training” report published online by the government highlights the results of a study that used US methodology to look at the abilities needed to perform different job roles, and the extent to which these can be aided by a selection of 10 common AI applications.
These applications are:
- Abstract Strategy Games: The ability to play abstract games involving sometimes complex strategy and reasoning ability, such as chess, go, or checkers, at a high level.
- Real-time Video Games: The ability to play a variety of real-time video games of increasing complexity at a high level.
- Image Recognition: The determination of what objects are present in a still image.
- Visual Question Answering: The recognition of events, relationships, and context from a still image.
- Image Generation: The creation of complex images.
- Reading Comprehension: The ability to answer simple reasoning questions based on an understanding of text.
- Language Modelling: The ability to model, predict, or mimic human language.
- Translation: The translation of words or text from one language into another.
- Speech Recognition: The recognition of spoken language into text.
- Instrumental Track Recognition: The recognition of instrumental musical tracks.
These AI applications were selected based on their relevance and the progress in technology from 2010 onwards, as recorded by the Electronic Frontier Foundation (EFF). They represent fundamental applications of AI that are likely to have implications for the workforce and cover the most likely and most common uses of AI.
The study also focuses on which occupations, sectors and areas within the UK labour market are expected to be most impacted by AI and large language models, and how this could impact workers in different UK geographic areas.
The Findings
The key findings of the study show that:
– Professional occupations are more exposed to AI, especially those associated with more clerical work and across finance, law, and business management roles.
– The industries least exposed to AI and to LLMs across industries are accommodation and food services, motor trades, agriculture, forestry, and fishing, transport and storage and construction.
– The finance and insurance sector is more exposed to AI than any other sector.
– The occupations most exposed to all AI applications are management consultants and business analysts.
– The occupations most exposed to large language modelling are telephone salespersons, followed by solicitors and psychologists.
– Workers in London and the South East have the highest exposure to AI (five times as exposed as the North-East of England), reflecting the greater concentration of professional occupations in those areas.
These findings led to some press reports that AI’s incursion into our working lives would most affect ‘city highflyers.’
Qualifications and Training
The study also exposes the qualifications and training routes that most commonly lead to these highly impacted jobs, concluding that:
– Employees with more advanced qualifications are typically in jobs more exposed to AI, e.g. those with a level 6 qualification (equivalent to a degree).
– Employees with qualifications in accounting and finance through Further Education or apprenticeships, and economics and mathematics through Higher Education are typically in jobs more exposed to AI.
Other Studies
Other studies highlighting levels of exposure to AI (AI taking jobs) include:
– A Pew Research Centre Study (2022) which found that 19 per cent of US workers were in jobs highly exposed to AI, where key activities might be replaced or assisted by AI.
– A Goldman Sachs Report (2023) suggesting that AI could replace the equivalent of 300 million full-time jobs globally. It indicates that about a quarter of work tasks in the US and Europe could be replaced by AI, impacting two-thirds of jobs in these regions to some degree.
IMF
A recent (October 2023) paper also highlights the dual nature of AI in advanced economies – AI’s potential as either a complement or a substitute for labour. The paper also highlights the important point that women and highly educated workers face greater occupational exposure to AI.
It’s worth noting that the Goldman Sachs Report (shown above) also highlighted this dual effect of AI, showing that AI also has the potential to create new jobs and boost productivity, potentially increasing the total annual value of goods and services produced globally by 7 per cent.
What Does This Mean For Your Business?
As highlighted in the report for this study (and as supported by the findings of other studies), 10-30 per cent of jobs are automatable with fast-evolving AI putting many of those jobs at risk. This government study confirms largely what many people may have expected – that those in more clerical work and across finance, law, and business management roles (where generative AI’s outputs are particularly effective) are most at risk from AI diminishing their value as workers. There are, of course, many other areas (some highlighted by this report) where generative AI is clearly able to replace or reproduce/copy human efforts to an acceptable degree, e.g. from customer service roles to creative work (artists). Some people may find that it’s disconcerting that jobs/professions which have taken years of study and have a specialist element and high social value (e.g. solicitors and psychologists) are shown in the report to be suddenly and significantly at risk from what are, basically, algorithms.
The report’s findings also makes what seems to be quite a logical conclusion that since there’s a greater concentration of professional occupations in London and the South East, it’s more likely to be negatively affected by AI.
The report of the study also makes the valid point about the dual nature of AI’s effects, i.e., that in addition to threatening many jobs, AI also has the potential to increase productivity and create new high value jobs in the UK economy. However, the main focus of this and other studies may appear to confirm the fears of many, that fast-advancing AI is likely to have a profound and widespread effect on the UK economy and society, and not necessarily in a good way for many peoples’ jobs, skills, and value.
As highlighted in the report, the UK education system and employers will now need to adapt to ensure that individuals in the workforce have the skills they need to make the most of the potential benefits advances in AI will bring. As individual workers, many may now want to look at the ways they can maximise their value and be in a position where they can use and orchestrate what are essentially tools more effectively than others, and in a way that adds value to themselves and their own positions, and/or in a way that creates new opportunities.