The economics firm highlighted that people who are replaced by automation could find that similar roles in the services sector will also be affected by automation. However, it added that the increase of robots will have a positive effect on employment and economic growth.
The firm called for action to prevent a damaging rise in income inequality and explained that each new robot will eliminate 1.6 manufacturing jobs – with the least-skilled regions being severely impacted.
Oxford Economics also stated that weaker economic regions, where people have lower skills and higher unemployment rates, will be at far greater risk of widespread job losses in years to come. Employees who leave manufacturing generally seek new jobs in transport, construction, maintenance, and office and administration work. These sectors are also vulnerable to automation, analysis shows.
According to the firm, every additional robot installed in those lower-skilled regions could result in nearly double the number of redundancies compared to those in higher-skilled regions of the same country; which could exacerbate growing economic inequality and political polarisation.
However, the report stresses that productivity benefits from automation should boost growth, meaning that while job losses are expected, new opportunities will likely arise in alternative fields.
Although robots are predicted to move out of factories and into service industries, the manufacturing sector is expected to be hit hardest by automation. This could have a significant effect in China, the report suggests, where manufacturing is still a key industry.
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It appears that transport and construction jobs, rather than roles in the legal or media sectors, will be under threat – along with lower-skilled people who may have moved from manufacturing. Oxford Economics also emphasised that a repetitive job has a greater risk of being wiped out.
However, roles which require more compassion, creativity or social intelligence will continue to be carried out by humans “for decades to come”, it said. The primary challenge for governments will be to amplify the positive aspects of automation and ensure that this does not create social divides.
In anticipation of this, the firm called on policymakers, business leaders, workers, and teachers to consider a greater focus on digital skills development to enable citizens to adapt.
Nearly two million manufacturing jobs have already been replaced by robots since 2000, including 400,000 in Europe, 260,000 in the US, and 550,000 in China. Oxford Economics predicts that China will undergo widespread changes in the manufacturing sector, with automation expected to boost industrial robot numbers by around 14 million by 2030.
Meanwhile, in the UK, several hundreds of thousands of jobs could potentially be lost to robots. However, the report stated that if there was a 30% increase in robot installations worldwide, this would result in the creation of $5 trillion in additional global GDP.
On a global scale, jobs will be created at the rate they are destroyed, the report said.