Scottish economy ‘must change’ to off-set job losses through automation

9 Jan 19

An overhaul of Scottish economic and social policy will be needed in the face of global automation, which threatens a third of jobs by 2030, a leading think-tank has claimed.

The pro-independence Common Weal group has called for an investment-led growth model, driven by the new Scottish National Investment Bank, coupled with an effective innovation strategy, to ensure the Scottish economy is inclusive and sustainable.

The think-tank warned that three distinct waves of automation will affect jobs in sectors such as finance, data, construction and transport at different times. Overall, at least 30% of current Scottish jobs are at risk of automation over the next decade, it said.

Automation risked increasing inequality in Scotland by widening the gap between rich and poor, with the most profound effect being felt by the lowest paid workers and those from outside the UK.

The SNIB, initial funding for which was included in December’s draft budget, would be an important tool for investment in the economy in order to spur job growth, the report said.

However, the bank should have a demand-led capitalisation, which could fund long-term infrastructure investments over a period of at least 30 years, as well as investment on the part of small and medium sized enterprises.

A new innovation strategy would see the creation of national companies responsible for identifying the investment needs of different industries and devising business plans to source the necessary investment from the SNIB.

Among the proposals included in the report were the creation of national pharmaceutical company and a Scottish space agency, as well as reform of employee ownership trusts to increase employee ownership in the private sector.

In order to mitigate job losses, lessons could also be learned from Nordic countries, which were at the lowest risk of automation despite the loss of many manufacturing jobs in recent years, it added.

Report author Craig Berry said the Scottish economy was now approaching a “tipping point”, and the priority was how to reorganise the economy so new technology worked for, rather than against, the population.

“We need to ensure that there are structural changes to our economic system so that we can be prepared to live in a world of high levels of automation,” he said.

“To do this, we need to reimagine how we can use the state to its full effectiveness and redesign our society.

“The wealth in the world of automation is increasingly becoming concentrated, as jobs begin to fall.

“What we need to ensure is that we can redistribute this increasingly concentrated wealth so that inequality in our society doesn’t spiral out of control.”

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