Chief economist Andy Haldane warns of ‘fundamental reorientation’ in the nature of employment

Jobs of the future will have to be focused on cognition and creativity, rather than production and perception, if humans are to have an “edge” over automation, Andy Haldane, chief economist at the Bank of England (BoE) said in a speech at the TUC last week.

According to BoE analysis, up to 15 million jobs in the UK could be automated, with administrative, clerical and production occupations most at risk. Haldane said “new-age machines” will “span a much wider part of the skill distribution than ever previously,” which means the “hollowing out” of mid-skilled workers and the widening wage gap across the economy, will come “ever-faster, ever-wider and ever-deeper” than the UK is prepared for.

Three areas employers and policy makers need to be aware of, according to Haldane:

1. The lowest paid jobs will be most at risk

In one area of analysis, the BoE ranked job-types by their median wage rate and plotted this against their probability of automation.

“Those most at risk from automation tend, on average, to have the lowest wage,” Haldane said. “In other words, technology could act like a regressive income tax on the unskilled. It could further widen income disparities.”

Haldane said workers would need to keep one step ahead of the machine, by “skilling up,” which could mean a whole wave of new-skilled roles being created in future.

He said: “Humans will adapt their skills to the tasks where they continue to have a comparative advantage over machines.”

2. EQ will ‘trump’ IQ

There is one area in particular where humans will always outshine their robotic counterparts: emotional intelligence, and Haldane predicts the importance and “skill premium” of non-cognitive skills will determine the most sought after occupations in future.

“Humans are known to possess an equally-important class of non-cognitive skills – self-confidence, self-esteem, relationship-building, negotiation skills, empathy,” he said. “The high skill, high pay jobs of the future may involve skills better measured by EQs than IQs, by jobs creating social as much as financial value.”

3. The ‘leisure class’ will rise

Drawing on research from economist John Maynard Keynes, Haldane said a longer-term solution to countering the impact of automation, would be to embrace “a world of progressively shorter working weeks, where mini-breaks become maxi-breaks.”

“Relax, retrain and redistribute,” Haldane recommended.

“Maybe attitudes will change as we grow accustomed to life in leisure class. Maybe “zero hours contracts” will take on a whole new aspirational meaning,” he said.

In line with the Monetary Policy Committee’s (MPC) forecasts that wages are expected to outpace productivity in the next few years, “retraining workers in line with their comparative advantage might be the answer,” Haldane added.