Press Release

Skills shortages from Brexit could speed up automation in London

A new report investigating the impact that automation, migration and pay pressures could have on London’s workforce, has found that almost a third of London jobs have high potential for automation over the next 20 years.

The report, by the capital’s dedicated think tank Centre for London, also found that the business case for automation may be accelerated by wage pressures and labour shortages, should immigration policy tighten after Brexit.

Human Capital – disruption, opportunity and resilience in London’s workforcewas supported by and produced in partnership with EY.

The report found that:

  • Almost a third of London’s jobs have high potential for automation, around one in five (19 per cent) have medium potential and just under half (48 per cent) have low potential.
  • The impact is likely to be highest for low- and medium-skilled workers, particularly in sectors such as wholesale and retail, transportation and storage, and accommodation and food – which together employ around one million people.
  • These are also some of the sectors which are most dependent on workers from other EU countries: these make up 32 per cent of construction workers and 35 per cent of accommodation and food service workers.

These sectors also offer relatively low pay and often have comparatively informal recruitment processes: consequently, they may find it more difficult to adapt to any new work permit regimes post-Brexit which require minimum pay levels and applications in advance of arrival in the UK. This in turn may strengthen the business case for deployment of automation.

However, the report also argues that London’s economy and its workers are well placed to adapt to the changing nature of work, compared to the rest of the UK. High skill levels, strong specialist sectors, and the likely creation of new jobs stand the capital in good stead:

  • London’s workers are better qualified than the UK average, suggesting greater capacity to adapt to change: more than half (53 per cent) have a degree compared to 31 per cent in the rest of the UK.
  • New jobs are likely to be created in London’s finance, IT, education, manufacturing and health sectors.
  • Services such as retail and food are often more specialised than in the rest of the UK, with more focus on personal service meaning they are less  likely to be automated.
  • London’s specialist sectors – including IT, finance and creative industries which employ 1.8 million people are relatively resilient to automation owing to the creative and social intelligence skills required.

Despite these strengths, the report argues that action – from school age to lifelong learning – is needed to ensure that Londoners have the creative, social and learning skills that will be needed to adapt in a period of rapid change.

Richard Brown, Research Director at Centre for London said:

“London has an extraordinary history of economic resilience and is well placed to ride the wave of disruption that rapid technological change and Brexit might unleash.

“But there could be losers as well as winners; lower skilled workers undertaking routine tasks could see their jobs disappear, and some may struggle to develop the skills needed for new roles.

“Government, schools, colleges and employers need to work together to ensure that skills, regulatory and welfare policies work together to strengthen London’s human capital and enhance both fairness and prosperity.”

Caroline Artis, Senior London Partner at EY, comments:

“The next decade will see an acceleration in the pace of technological change like no other and all businesses should be prepared.

“Employers need to consider how they remain agile for the ‘new normal’ and this means learning about new technologies, modernising the workplace and challenging traditional thinking and ways of doing things.

“Technology and automation will enable businesses to grow more efficiently and could boost economic growth by creating new types of jobs. But we will be augmented by machines, not replaced by machines.”

Jasmine Whitbread, Chief Executive of business group, London First, said:

“Workplaces are changing with many businesses expecting to see the impact of automation within the next seven years, so when today’s school kids are starting their careers.

“The good news is employers are stepping up, re-skilling the people they have, investing in training, apprenticeships and the forthcoming T-Levels.

“But, as we countdown to Brexit, government must help close the skills gaps currently holding UK businesses back.”

Notes to editors:

About Centre for London

  •        Centre for London is the capital’s dedicated think tank.  Our mission is to develop new solutions to London’s critical challenges and advocate for a fair and prosperous global city.
  •        We are a politically independent charity. We help national and London policymakers think beyond the next election and plan for the future.
  •        We have ideas with impact. Through research, analysis and events we generate bold and creative solutions that improve the city we share.
  •       We believe in the power of collaboration. We bring together people from different parts of the city – with a range of experience and expertise – to develop new ideas and implement them.
  •     As a charity we rely on the support of our funders. Our work is funded by a mixture of organisations and individuals who share our vision for a better London.
  •        Find out more at 

About EY

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Research methodology

This report adapts work undertaken by Karl Frey and Michael Osborne, recoding US occupational classifications to their UK equivalent, and then applying these to London’s workforce, using bespoke ONS data on employment by occupation (SOC 2010) and by industry (SIC 2007).