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Why companies should allow intelligent machines to do simple low margin work

Manufacturing businesses are being urged to look beyond doom-laden warnings about the impact of Artificial Intelligence on millions of factory jobs and embrace new technology.
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Dr Andy Levers, technical director for the University of Liverpool’s Virtual Engineering Centre (VEC), told Real Business that the greater use of Artificial Intelligence (AI) and autonomy in the UK was a cause for optimism.

“AI in manufacturing is augmenting human intelligence rather than replacing it, allowing workers to be more productive both on the shop floor and in the office,” he said.

“While many headline-grabbing reports have warned of the risk of job displacement, the VEC is seeing the opposite affect with SMEs we are working with. Greater use of AI and autonomous systems is allowing companies to do more, faster and with greater opportunities for customisation.”

Levers was responding to a new report from PwC looking at the impact of AI on UK economic growth.

It revealed that AI and related technologies are projected to create as many jobs as they displace in the UK over the next 20 years. It said around 7 million existing jobs could be displaced, but around 7.2 million could be created, giving the UK a small net jobs boost of around 0.2 million.

The health, professional, scientific and technical services and education are expected to experience the largest net increase in jobs in the long run. PwC said job numbers in the health and social work sector could increase by nearly 1 million.

This will be helped, according to a recent report from Smith & Williamson, by innovations such as intuitive surgery using 3D imaging.

However, PwC added that manufacturing, transport and storage and public administration are estimated to see the largest net long-term decrease in jobs due to AI.

Indeed, it was estimated that the number of jobs in the manufacturing sector could be reduced by around 25%, representing a net loss of nearly 700,000 jobs.

“Major new technologies, from steam engines to computers, displace some existing jobs but also generate large productivity gains. This reduces prices and increases real income and spending levels, which in turn creates demand for additional workers,” said John Hawksworth, chief economist at PwC.

“Our analysis suggests the same will be true of AI, robots and related technologies, but the distribution of jobs across sectors will shift considerably in the process. Healthcare is likely to see rising employment as it will be increasingly in demand as society becomes richer and the UK population ages.

“On the other hand, as driverless vehicles roll out across the economy and factories and warehouses become increasingly automated, the manufacturing and transportation and storage sectors could see a reduction.”

PwC called on the government to invest more in “STEAM” skills which incorporates the STEM subjects but also explores how art and design (the A in STEAM) could feature more. It should also encourage workers to continually update and adapt their skills so as to complement what machines can do.

Levers of the VEC said manufacturing SMEs were already recruiting more digital engineers and graduates at the same time as freeing up highly skilled workers with traditional skills to focus more on complex high value, high margin projects.

“AI will be a boom industry for the next generation, but the real opportunity is allowing the machines to do the simple low margin work while the human workforce add the creativity and ingenious solutions that break the mould,” he said.

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