Artificial intelligence to create more jobs in Scotland than it replaces, PwC research suggests

Robots on a production line - Image credit: Steve Parsons/PA

Artificial intelligence will create more jobs than it replaces, research by PwC has predicted.

According to PwC’s ‘UK Economic Outlook’ report, digital innovations and smart devices such as robots, drones and driverless vehicles will lead to the creation of 558,000 jobs and the loss of 544,000 others by 2037, a net gain of 14,000.

The report forecasts that Scottish growth will lag behind the rest of the UK for the next few years, predicting it will one per cent to the UK’s 1.3 per cent this year and 1.3 per cent compared to 1.6 per cent for the UK as a whole next year.

However, it suggests that over the next 10 to 20 years artificial intelligence could bring about increased productivity growth, with a positive knock-on effect on employment.

PwC suggests that new technology will allow companies to produce existing products at less cost, leading to lower prices and households being able to buy more as a result, which will bring about more jobs as firms respond to the increased demand.

In addition, it suggests that technologies will enable new products to be brought to market, which also create a need for more workers.

The analysis calculates that 46 per cent of long-term UK output growth – or around 0.9 per cent of annual UK GDP growth – will come from AI.

Scotland is third top in the list of 12 UK nations and regions to benefit from developments in technology, behind London and the south-east of England, with an expected 0.5 per cent increase on current job numbers.

The sectors that are expected to benefit the most include health; professional, scientific and technical services; and education; while manufacturing; transport and storage; and public administration are expected to suffer the largest long-term decreases.

In order to mitigate the effects of job displacement and make the most of the opportunities, PwC makes several recommendations for government actions.

These include focusing on STEAM (science, technology, engineering, art and medical) skills and encouraging workers to update their skills, place-based growth strategies centred on university research centres and science parks, and promoting effective competition to ensure consumers benefit from lower prices, as well as full implementation of the UK Government’s AI strategy.

Euan Cameron, UK AI leader at PwC, said: “People are understandably worried about the impact of AI on jobs, and businesses and the government need to address these concerns head on.

“Our research highlights where the biggest impacts will be and which areas are most vulnerable, so that businesses and government can plan how best to help people develop the skills that will prepare them for the future.

“As our analysis shows, there will be winners and losers.

“It’s likely that the fourth industrial revolution will favour those with strong digital skills, as well as capabilities like creativity and teamwork which machines find it harder to replicate.

“Historically, rapid technology change has often been associated with increases in wealth and income inequality, so it’s vital that government and business works together to make sure everyone benefits from the positive benefits that AI can bring.

“These include increased productivity and consumer choice, as well as improved outcomes in those areas that matter most to people such as education to healthcare.”