UK: Transformers - How Machines Are Changing Every Sector Of The UK Economy

Last Updated: 24 February 2016
Article by Angus Knowles-Cutler

Most Read Contributor in UK, August 2017


Welcome to our new report about the future of business in the UK, which continues our study of the impact of automation and robotics on work and employment. Our research this time shifts the focus from the future of occupations to the outlook for industry sectors.

Using a similar approach and model to our previous research, we have identified those sectors of the economy that are most exposed to the risk of automation and its potential to replace human labour. Our analysis looks at all areas of employment in the UK. The sectors that may be highly vulnerable to rapid advances in technology include some which are big employers today. Our research suggests that the Wholesale and Retail industry has the largest number of jobs at high risk – 2.1 million. This is followed by Transportation and Storage with just under 1.5 million jobs at high risk, and Health and Social Care with 1.3 million.

It is important to understand the limitations of our approach. The model we are using considers what is likely to be technologically possible in the next two decades. It does not consider other key factors: the difficulty of implementing technology in the workplace; social and political resistance; and the relative cost of human labour versus the expense of implementing and maintaining technology. These will act as brakes on the full potential of technology, at least for the time being.

Our work on the automation of tasks and occupations is also just one aspect of the situation. The history of technology in the UK is unequivocally positive, with more jobs being created than destroyed, and new jobs are typically better paid and more highly skilled. However the country cannot rest on its laurels: if the UK is to remain a world leader in technology, strengthening its economy and building vibrant, successful businesses for the future, business leaders, policy makers and educators need to understand the likely impact of automation on the workforce.

We hope that you find this report useful and look forward to your views.


All industries will be affected by automation, but in different ways, by different technologies and to different extents. Some of these technologies are mature, and have been in use for many years, whereas others are still experimental and not yet widely adopted, but nevertheless have huge potential for disruption. These technologies are likely to have an impact on many jobs, changing the tasks that people perform and the roles that they fulfil.

Deloitte's previous research has shown that, over more than a century, the tasks that tend to be automated are typically dangerous, repetitive or routine, and this has freed up people to focus on the less routine and value-adding elements of their jobs. Tasks and roles that involve perception, creativity, human interaction, caring for others or other forms of social or emotional intelligence are, for the time being at least, much less likely to be automated.

In November 2014, Deloitte collaborated with Carl Benedikt Frey and Michael Osborne of Oxford University on "Agiletown: The relentless march of technology and London's response". In that report, we suggested that 35 per cent of today's jobs in the UK are at high risk of automation in the next 10 to 20 years. Then in autumn 2015 we conducted a new in-depth study of the UK's labour force to understand how these hypothetical models compared with actual changes in the last fifteen years.

That study painted a positive picture: while technology has potentially contributed to the loss of 800,000 lower-skilled jobs, there is equally strong evidence to suggest that it has helped create nearly 3.5 million new higher- skilled jobs in their place. Each one of these new jobs pays on average nearly £10,000 more per annum than the ones lost. We estimate that this technology-driven change has added £140 billion to the UK's economy in extra pay.

This report takes Deloitte's previous work and extends the analysis by investigating changes wrought by automation at industry sector level. This means that, for the first time, policy makers, educators and business leaders can begin to understand the impact of automation on their sector and make informed investment decisions based on what the future is likely to hold.

Key points from this new research

  • All industry sectors have roles that are at high risk of automation and also new roles that are likely to be created as a result of automation.
  • The Transportation and Storage, Health and Social Care, and Wholesale and Retail sectors have the highest proportion of existing jobs at high risk of automation.
  • The greatest increases in new jobs in the last 15 years have been in the Human Health and Social Work, Education, and Professional, Scientific and Technical sectors. The greatest fall in job numbers has been in Manufacturing.
  • The new jobs created in the Professional, Scientific and Technical sector pay significantly more than the new jobs created in Human Health and Social Work or Education.
  • While technology is on the whole likely to create more (and generally better-paid) jobs than it destroys, some industries are likely to lose more jobs to machines than the new technologies will create.
  • The UK's continued economic and technological success will rest on the ability of political, business, education and public sector leaders to anticipate correctly the future skills requirements and to provide the right education and training for developing them.

Transformers - How Machines Are Changing Every Sector Of The UK Economy

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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