Andrew Bailey, the Governor of the Bank of England, harbored concerns about the effects of large-scale Artificial Intelligence (AI) use. He says it will mostly just displace jobs, as the Industrial Revolution was found to do. In a speech given just last month, Bailey pointed to these historic fears by calling attention to technology’s impact on employment. He recognized that technology is the key to economic growth.
Bailey added that fears about new technologies eliminating jobs have a long history. His plan made even Queen Elizabeth I nervous about what this knitting machine would do to her citizens. This apprehension colored her legacy with uncertainty for all future technical innovations. This brief historical context serves to remind today’s innovators that the future is indeed dotted with fears of technology taking our jobs.
As AI is weaving itself more deeply into the fabric of our daily lives, it’s being taken up more and more by the private and public sector. Bailey described AI as the “most likely source of the next leg up” for the UK’s future economic growth. At the same time, he recognized the destruction it will soon bring to the workforce.
In the most recent three month period up to October, the unemployment level in the UK rose sharply to 5.1%. This increase is particularly alarming for younger employees. During the course of this period, an additional 85,000 young adults between the ages of 18-24 became unemployed. This spike represents the biggest jump since November of last year.
“We want to hire, but I don’t know if it’s going to be the same level of people that we hire – it will be a different set of people.” – Mohamed Kande
Bailey was clear that the UK needs to equip its workforce for this upcoming revolution, and quickly. Still, he focused on a very real need for training, education, and skills. These are critical to ensuring that workers can move into jobs that adopt AI technologies. He waved away this concern, pointing out that even if there is no mass unemployment due to AI, it will displace jobs.
Bailey argued that AI’s disruptive potential could rival, or surpass that, of the Industrial Revolution. He maintained that rather than throw everyone out of work, it changed the nature of jobs. He remarked, “My guess would be that it’s most likely that AI may well have a similar effect.”
The Bank of England is already working to understand how best to use AI across the organisation. Yet, Bailey admitted the practice is in an experimental phase for the institution, with these technologies. Finally, he suggested that policymakers need to be constantly aware of how AI will change what jobs are worth and the pathways into those jobs.
“To get it into sort of mainstream, everyday use will take some time, but it’s critically important that we obviously focus on getting the pre-conditions and all the conditions in place for that to happen.” – Andrew Bailey
His concerns ring like a clarion call of doom that others in the financial sector have taken up. Jamie Dimon, the head of JP Morgan, recently freaked out about a coming market correction due to technological disruption. He went so far as to declare himself “far more concerned than most” about the economic headwinds facing us.
Bailey’s remarks should underscore the increasing recognition that AI has the potential to significantly increase productivity. Simultaneously, he cautions that it poses real, complicated challenges to traditional labor markets. He made sure to turn the conversation towards thinking about AI’s role in both attracting people to the workforce and retaining them. This is an incredibly important piece to look at.
“We do have to think about, what is it doing to the pipeline of people? Is it changing it or not?” – Andrew Bailey
As discussions surrounding AI’s integration into various sectors continue, Bailey’s insights serve as a reminder of the delicate balance between innovation and its implications for society. The future landscape of work will be determined in large part by how well actors—from regulators to business—meet these new challenges and opportunities.