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Businesses face being left behind by transition to new technologies

18 September 2019

Unless the Government steps up efforts to manage the transition to automation, entire regions of the UK face being left behind and British businesses could find themselves being uncompetitive, says the Business, Energy and Industrial Strategy (BEIS) Committee in a report published today.

The Automation and the future of work report finds the UK's slow place in moving to automation – the UK lags behind its G7 competitors in its adoption of robots – has allowed other countries to steal a march in leading the Fourth Industrial Revolution and seizing upon the opportunities for economic growth and jobs.

To ramp up the leadership and co-ordination needed to enable the UK to capitalise on these new technologies, the report urges the Government to come forward with a UK Robot and AI Strategy by the end of 2020. The report outlines a series of measures which could be introduced as part of this strategy, to help support businesses, industries, and universities and boost the adoption of automation.

Chair's comments

Rachel Reeves, Chair of the Business, Energy and Industrial Strategy (BEIS) Committee said:

“The switch to automation brings challenges for businesses and for workers, with fears for livelihoods or disruption to job roles coming to the fore. The real danger for the UK economy and for future jobs growth is, however, not that we have too many robots in the workplace but that we have too few. For all the potential of the UK, and despite our excellent tech and research base, the fact is that we are lagging behind our international competitors in our adoption of robot and automation technologies. Productivity, economic growth, and ultimately job-creation and higher earnings, will flow to those countries that capitalise on these technologies.

“The Government has failed to provide the leadership needed to help drive investment in automation and robot technologies. If we are to reap the potential benefits in the future of improved living standards, more fulfilling work, and the 4-day working week, the Government needs to do more to support British businesses and universities to collaborate and innovate.

“The Government should come forward with a UK Robot and AI Strategy to support businesses and workers as they manage the transition to a more automated world of work. This new Strategy must seek to get the right support in place, on issues such as skills, investment and training, to ensure that all parts of the UK share in the jobs and growth benefits offered by automation.

“A new UK Robot Strategy must also help to provide the support needed for British businesses, universities and research centres to succeed. The Government should work with universities and businesses to provide the advice, networking, and access to finance necessary for the UK to reap the benefits of domestic tech success stories rather than too often seeing these businesses get snapped up by overseas investors.”

The report finds against a ‘robot tax', believing that such a tax would discourage take up of automation and that it would not be in the interest of businesses or workers in the UK. Given the potential boost to productivity, especially among SMEs, the report recommends the Government brings forward proposals in the next budget for a new tax incentive designed to encourage investment in new technology, such as automation and robotics. On the potential for a move to a four-day working week, the report agrees with the CIPD that a four-day week is feasible, but not currently practical.

A lack of awareness and understanding of automation is harming business productivity, especially for SMEs, the report finds. The report is critical of the Government's decision to close the Manufacturing Advice Service in 2015, describing it as “a mistake” which “has contributed to making it more difficult for businesses to find help and advice”. The report recommends that the Government funds an impartial source of advice for businesses that want to invest in automation. The report also calls for the Government to come forward with a plans for a fully-funded UK-wide advice and information scheme based on the “Made Smarter” North-West pilot.

The report recognises the narrowing of the school curriculum in recent years, notes the demand for STEM subjects, and outlines the need for a flexible and relevant school and university curriculum. The report also calls for the large-scale expansion of lifelong learning and reskilling and says these are essential to ensure opportunities “don't just fall to those with the ‘right' degrees and skillsets” and to enable the UK to improve on the only 17 per cent female workforce in the technology sector.

The report says the transition to a more automated workplace and society risks reducing the quality of work, widening existing inequalities and increasing regional disparities. The report finds the lack of planning and action in this area “worrying” given the role that the Government has in schools and education policy, as well as regional and business policy. The report recommends that the Government supports those most affected and provides local areas with the support and incentives needed to enable the transition.

Further information

Image: Franck V. on Unsplash