Investment in better technology is one of the best way businesses can increase their growth and efficiency. By replacing workers with machines businesses cut their long term costs a huge amount and robots are often far quicker and more accurate than people. Of course, there will always be jobs that a robot simply cannot do, however an increasing number of jobs may fall victim to technological advancement. The Institute for Public Policy Research (IPPR) have reported that 1 in 3 UK jobs may be replaced by robots in the next 20 years.
It will come as no surprise that the majority of these jobs will be in the low skill sectors of the economy, which is unfortunately also the sector least adaptable to change. This has led to the IPPR urging the Government to invest billions of pounds to help low skilled workers build the skills they need to cope with the threat of being replaced. The IRRP also warned that automation may increase the north south divide currently present in England. Analysis showed that while in London 39% of jobs were at high potential for automation, 47% are at high risk in Yorkshire and 48% are at high risk in the north-east.
The IRRP think tank has suggested the Government introduce a retraining allowance of £2000 for those replace by machines. They also suggested that the newly introduced apprenticeship levy be turned into a £5bn a year skills levy that offers help to regions furthest away from London. The IRRP warned that if we do not retrain workers then we may end up with a society where a small number of people prosper, and many are left behind.
The think tank said that the £2000 retraining allowance should be paid to workers who lacked A-levels or their equivalent, with better workers eligible for up to £1000 for retraining provided they matched that amount with their own contribution. The cost of £164M a year could be recouped by reducing the tax-free allowance for redundancy payments the report added.
The IRRP suggested that the skills levy should be set at 0.5% of payroll for employers with more than 50 employees and 1% for employer with more than 250 employees. A quarter of the £5bn raised would be allocated to a regional skills fund. By allocating money to the regional skills fund the Government ensures that retraining will be relevant to industries in the workers area.