New report suggests fundamental change in employment prospects by 2035

By 2035, higher skilled jobs and healthcare roles set to offset the millions of jobs displaced by automation and artificial intelligence 

New research suggests a fundamental change in employment prospects as higher skilled, education and healthcare roles offset the millions of jobs likely to be lost due to the application of new technologies by 2035.

The projections are made in a paperanalysing structural changes taking place in the UK economy. The study lays out implications for the labour market and the occupational structure of employment over the period to 2035. The projections focus on long-term structural trends such as demographics, economic change and automation, rather than short-term impacts on the labour market and future skills needs.

The research, carried out by the University of Warwick’s Institute for Employment Research, working in collaboration with Cambridge Econometrics, is part of a wider research programme led by the National Foundation for Educational Research (NFER).

The paper can be accessed here: https://www.nfer.ac.uk/media/5076/the_skills_imperative_2035_working_paper_2_headline_report.pdf 

It also projects that:

• There will be 2.6 million new jobs by 2035, the majority of which will be taken by females.
• Employment in the health sector is expected to increase the fastest, with around 369,000 new jobs by 2035.
• Almost all of the new jobs created by 2035 will be in professional and associate professional occupations.
• The UK economy will see a substantial recovery in Gross Value Added (GVA) output by 2035, following the sharp decline in the pandemic. The Construction (+2.4 per cent pa) and Trade, accommodation and transport (+2.1 per cent pa) sectors are expected to lead the way.
• The jobs most vulnerable to automation are currently mainly held by men.
• The sectors with the largest employment declines will be in manufacturing: metal products (-41,000) and other transport equipment (-22,000).
• Job losses will be concentrated among blue collar manual occupations, especially in areas where automation is possible, as well as among less skilled white-collar non manual occupations. 
• Current trends that see young people acquiring more and higher level qualifications (replacing those generally less qualified people who are leaving the labour market), will continue.

The paper recommends that:

• Given the cross-cutting nature of the challenges presented by these projected labour market changes, a similarly cross-cutting body should be established, reporting directly to the Cabinet Office. This body would be responsible for working effectively across Government departments, with employers and others in order to ensure that appropriate strategies are developed to (i) understand the implications of these changes in more detail and (ii) set out how the Government, employers, training providers and the education system should respond, drawing on views and expertise from across and outside Government. 
• Industry leaders and representative bodies, working with regional and local partners including Mayoral Combined Authorities and local authorities, assess what these projections mean for employment and output growth in their sectors / industries and / or for the business-critical occupations they will need in future and start planning what actions they need to take.

Jude Hillary, the Principal Investigator for the research programme and the Co-Head of UK Policy and Practice at NFER said:

“The impact of adoption of new technologies, coupled with major demographic and environmental change and other factors, are predicted to disrupt the labour market in the coming decades. This will impact both on the jobs which will be available, and the skills workers will need to do those jobs.

“This research offers critical insights into how the economy and labour market is changing. The next paper in this project will focus more specifically on the essential employment skills which will be needed in the future.

“If we as a country are to prosper, it is vital we heed these warnings and begin preparations to ensure we provide our workforce with the right skills, to do the right jobs at the right time.”

Josh Hillman, Director of Education at The Nuffield Foundation said:

“Understanding the future trajectories of labour market demands is critical for young people, educators and employers. This latest working paper challenges common assumptions about the decline in job supply and provides a more nuanced perspective, considering outcomes by gender and sector.

“In the next stage of the project, these labour market projections will be used to identify the changing demand for essential employment skills in different sectors of the economy.”

The paper is the second in a series of reports from a five-year research programme which will project the essential skills needs of employers and their likely supply by 2035, identify where the skills gaps are likely to be, and establish what the implications are for the education system (including how to target support at the groups most vulnerable to the impact of the transformation of the labour market).

The Skills Imperative 2035: Essential skills for tomorrow’s workforce,funded by the Nuffield Foundation, sees NFER and its co-investigators working with employers, policy makers, and education leaders to address these pressing issues about education, skills and work.

Jude Hillary is working with Professor Andy Dickerson and Professor Steven McIntosh from the University of Sheffield, Professor Rob Wilson from the Institute for Employment Research at Warwick University, Professor Bryony Hoskins from the University of Roehampton, Shyamoli Patel and Ha Bui from Cambridge Econometrics, Kantar Public, and Naomi Phillips at Learning and Work Institute.