How can we stop robots making the economic divide even greater?

When it comes to robots, science fiction is rapidly becoming science fact. The debates foreshadowed by the novels of Isaac Asimov and other similarly thoughtful writers are becoming increasingly pressing as an economic revolution picks up speed. 

Oxford Economics joins the party this morning with a sobering look at the economic impact of robotisation. Each new industrial model, it says, will eliminate an average of 1.6 jobs. As many as 20 million could be lost globally by 2030. 

It isn’t just manufacturing, where the presence of robots has been evident for some time, that will take a hit. Advances in machine learning, artificial intelligence and engineering, fuelled by the vast sums being invested by big tech, is hastening their entry into the service sector. 

That matters because the jobs robots look set to replace – in transport, construction and maintenance, office and administration work – are roles usually taken by workers displaced from manufacturing.

The Oxford Economics report notes, as other commentators have, that the rise of robots will boost growth and productivity, perhaps substantially. A 30 per cent rise in installations by 2030 would, it says, generate $5tn (£3.9tn) in additional GDP that year.

The trouble with this “robotic dividend” is that it won’t be evenly shared. It risks exacerbating the already stark economic divides that are causing widespread problems and leading to malign political outcomes in countries such as Britain and the US. 

The poorest areas will be hit disproportionally by the cost of the robots’ rise, says the report. The benefits of the financial and employment dividend will, by contrast, be skewed towards more prosperous regions. 

There are those who have reacted to this by calling for policymakers to apply the brakes. But attempts to quell the robotic tide may prove about as successful as King Canute’s command to the tide of the sea.

Even if it were possible, it would probably ultimately prove to be self-defeating, an exercise in cutting off one’s nose to spite one’s face (admittedly something Britain and America are proving themselves to be rather good at). 

A country that sought to rein in robotics while others steam ahead would still experience a swathe of job losses in poorer areas through saddling their industries with an overwhelming competitive disadvantage. And there would be none of the benefits that could be used to mitigate the impact.

So policymakers should assist the regions poised to bear the brunt of the approaching storm by ensuring the divided is better shared. 

In the UK, many of the worst-affected regions are still suffering the last wave of deindustrialisation under Margaret Thatcher. The west midlands, south Wales and east Yorkshire are coloured deep red (most at risk) in Oxford’s at-risk map. 

Some of Thatcher’s heirs have woken up to the fact that a laissez-faire approach to boosting their prospects hasn’t worked too well – in fact playing a role in the instability the UK is suffering. 

So now you have the Northern Powerhouse, and infrastructure projects such as high-speed rail. Infrastructure investment is one of the ideas Oxford Economics puts forward for the regions most negatively affected by robots’ rise, as well as investing money in the development of the skills workers will need to adapt to the new economy – developing science parks, and making use of the tax system (not least because the owners of capital will benefit most handsomely from this brave new world). 

But if you’re going to spend money on infrastructure, you really want it to be good infrastructure. It’s not altogether clear that high-speed rail is an example of that. 

Nevertheless, it will require an aggressive approach on the part of policymakers if this revolution is to avoid some of the malign consequences envisaged by science-fiction writers who have mined this rich seam for their work.

A secretary of state for robots? It’s not the worst of ideas, although it might be more sensible to make the role part of a beefed-up business department working alongside the Treasury, which has sometimes played spoiler when it comes to initiatives if it feels they could threaten its economic primacy. 

To make a success of the appointment would require a smart and thoughtful politician, and there aren’t too many of those around in Britain. 

Tom Watson, Labour’s tech-savvy deputy leader and a man far more in touch with these challenges than most of his colleagues from any of the major parties, is one who would be ideally suited to it. Of course, he may have his eyes on a bigger job. But a tech head at the top wouldn’t be such a bad idea given what we’ve got coming.