Automation, artificial intelligence and globalisation are among the biggest economic issues of our age. As Lee Waters described on this blog last week, these changes will have a profound impact on the way we live and work in the coming years. This is particularly true in Wales’ three biggest cities – Cardiff, Swansea and Newport – which are home to around a third of the total population of Wales, and more than a third of all jobs.
However, if we look back over the past century, it’s clear that automation is a continuation of trends that have affected cities across Britain for more than a century. And while they will undoubtedly bring significant disruption and challenges, they will also bring significant new opportunities.
These issues are the focus of Cities Outlook 2018, the Centre for Cities’ annual health check on the country’s city economies which this year examines the impact of automation and globalisation on jobs in urban Britain.
It shows that 100 years ago, British cities were as heavily exposed to job losses from automation and globalisation, as they are now. Back then, it was occupations such as laundry workers, streetlamp lighters and domestic servants which were at risk. Today its retail cashiers, sales assistants and warehouse operators.
So whilst the latest wave of automation and globalisation is nothing new, these trends are likely to have a similarly disruptive effect on employment as they did in the past. Indeed, the report shows that around 1 in 4 existing jobs in Welsh cities are likely to be displaced by 2030 as a result of these changes, amounting to around 112,000 jobs in total.
That’s clearly a worrying figure when taken in isolation. But if we look back again at the past century of automation in British cities, we see that despite the loss of jobs in traditional occupations and sectors, overall employment in British cities increased by 60% in the past century. This amounts to a growth of 6.7 million jobs in total, thanks largely to the emergence of new sectors such as IT, creative, media and marketing offsetting the decline of traditional industries and occupations.
In all probability, automation and other changes will ultimately lead to the creation of more jobs in the coming decades than are displaced. What should be of greater concern, however, is the types of jobs that have been created in different cities in Wales over the past century, and what this means for their future prospects.
In broad terms, Cardiff has been increasingly successful at attracting high-skilled, high-paying jobs and firms in newly emerging sectors over the last century. In contrast, Swansea and Newport were both hit harder by the decline of traditional industries such as steel and mining, and have largely replaced jobs in these sectors with low-skilled, lower paying jobs.
And because Swansea and Newport are both home to relatively low shares of high skilled jobs, as well as high numbers of workers with no qualifications, they are more exposed to job losses resulting from automation and globalisation – with more than 23% of jobs under threat in both cities. Cardiff has a larger share of high skilled workers and jobs, and the risk is slightly smaller as a result, with 20% of the city’s jobs at risk.
And while all Welsh cities will see jobs growth in the coming decades, reflecting their current employment base, around a third of the jobs predicted to grow in Newport and Swansea are in low skilled roles. – more than the high skilled jobs set likely to grow in each city. Cardiff too is likely to see an upswing in low-skilled work: 27% of the jobs predicted to grow in the city are in low skilled occupations, compared to 25% in high-skilled occupations.
It’s clear then, that concerted action is needed now to ensure that the people who live and work in Welsh cities are best able to take advantage of the opportunities that automation will bring. And the Welsh government has a big role to play in this.
A crucial part of that will be to improve skills in Welsh cities, particularly among working age adults. That means more focus and investment in apprenticeships, lifelong learning and technical education, to help adults currently working to adapt to the changing labour market, and to retrain those who lose their jobs because of these changes.
It also means improving the education system. While school attainment levels in Welsh cities compare well to other parts of the UK, reform of the education system is needed to give more young people access to well-performing schools and the problem-solving and interpersonal skills they will need to thrive in the future.
Finally, the Welsh government needs to recognise that the success of the country’s economy depends on the performance of its city regions – and to step up its support for urban areas accordingly.
That means building on the city deals that Cardiff and Swansea city-regions have secured in recent years. It also means giving the city-regions a bigger role and say in national economic policy decisions as well as devolving to them more of the powers and resources they need to make the most of the challenges and opportunities they face in the coming years.
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