Technical change, employment and inequality in the UK

According to the London Futures Deloitte report, 35 per cent of the current workforce in the UK is at risk of being made redundant over the next two decades as a result of the introduction of digital robots that will replace their work. For those that manage to remain employed, it is difficult to predict whether and how they will be able to adapt their skills to changing labour demand. As a result of technical change, firms dismiss medium-skilled workers, and hire either low skilled workers to perform highly routinised tasks, or very high skilled people who provide creative ideas and apply sophisticated knowledge to maximise the benefits of digital capital. This job polarisation is likely to be reflected in a similar polarisation of wages.

Isigrowth researchers Maria Savona, Tommaso Ciarli and Mariana Mazzucato are leading a project which will investigate these issues and the innovation-inequality relation in the UK by looking at three mechanisms: the Schumpeterian ‘creative destruction’ effect, employment change and the role of wages.

Click here to read more