AI, green jobs and the inequality dilemma – Prospect Magazine

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The Industrial Revolution transformed the UK into a global economic powerhouse by creating a dense network of thriving industry. This transition drove technological innovation, urbanisation and prosperity in every corner of the nation. The UK’s power and wealth rose above that of other countries as a result. 

But such transitions have winners and losers. History and theory show that the costs and benefits are not shared equally. The costs of Britain’s industrialisation have become clear in recent years. The move to a post-industrial economy since the 1970s and 1980s—aided by policies that allowed deindustrialisation at breakneck pace—left many communities struggling to adapt. After nearly half a century, many of the areas in the UK most affected by deindustrialisation have struggled to recover. 

Britain’s experience shows us that a poorly managed industrial transition—particularly one that leads to widespread unemployment—can be devastating. The loss of industry can represent the loss of a way of life: community cohesion erodes, tensions rise and confidence—particularly in politics and politicians—breaks down. 

It did not have to be this way. Many countries, such as the Scandinavian states and the Netherlands, managed their transition away from traditional industry more successfully. And even in British history there are further recent examples of successful navigation of huge industrial change. Take, for instance, the computer age of the late 20th and early 21st centuries. Digital technology has already revolutionised communication, expanded global connectivity and driven both the destruction of old industries and the emergence of new ones. This transition was revolutionary, but more subtle and gradual—and it was accomplished without resulting in significant structural unemployment.  

Today, policymakers are at the precipice of a further two great industrial transitions: the move to a low-carbon economy and the rise of artificial intelligence. Either transition could fundamentally restructure our economy, reshaping production, the demand for skills and pressures on infrastructure. And we will have to face the two transitions at once. Managed badly, the unemployment risk could be even bigger than in previous industrial shifts.  

Before we can develop a serious plan in response, we need to understand the potential impacts of these transitions. That was the focus of much of my research last year. I uncovered striking geographical differences in how disruptive each transition might be. 

Advocates herald the move to a green economy as the opportunity to promote local growth in the areas that suffered most from loss of industry. As Keir Starmer put it in a speech in June 2023, before he became prime minister: “We can use the opportunity of clean energy to create jobs to deliver security and bring back hope to communities that got ripped apart by deindustrialisation in the 1980s.”  

But my work suggests that this optimism may often be misplaced. Workers who have the right skills—whose current or former jobs are most similar to the new jobs we might call “green”—overwhelmingly live in richer parts of the country, including London and the wealthier parts of the Home Counties. There are some post-industrial areas with a skilled workforce (such as coastal Cumbria and Teesside), and others (Nottingham and Luton) where workers with the right skills might earn a good pay rise by switching into low-carbon industries. But many towns in the north and the Midlands will not see automatic employment benefits from the growth of the green economy. Indeed, they may lose out as “brown” industrial plants close and more sustainable sectors develop elsewhere. 

Therefore, government needs to be more discriminating, driving investment in green industries in poorer areas that show potential, while investing in broader economic resilience elsewhere. Policymakers should be clear that the extent to which the green transition can be a silver bullet to revitalise our post-industrial communities is limited. 

We have a similar tale of two countries when it comes to AI. Wealthy urban areas and the greater southeast—where knowledge work is already most concentrated—are at the forefront of AI’s opportunities and challenges. These areas have a big concentration of workers in “high exposure” roles—those where a large amount of a worker’s time is spent on tasks that AI performs well at. Given that these areas are wealthier to begin with, they are well placed to absorb disruption and reap the rewards. They can make productivity gains as jobs transform. 

Britain’s experience shows us that a poorly managed industrial transition can be devastating

In contrast, many poorer areas (for example, Eastbourne, Stoke-on-Trent and Wolverhampton) have economies that are less exposed to AI and may struggle to harness its benefits. Other regions still, including parts of Wales and rural England, face a different challenge: here, AI’s impacts are likely to be widespread, but not transformative. For instance, in sectors such as agriculture, AI might optimise machinery use or crop monitoring without significantly reshaping job markets. Similarly, public services such as education might see incremental improvements through use of AI tools in administration and learning support, but these changes are unlikely to overhaul the sector. This creates a need for widespread but moderate help for workers as they adjust and retrain on the job. 

The green transition and AI will be transformative—but the question is whether their benefits will be distributed equitably. My analysis suggests that both transitions could exacerbate existing inequalities rather than reduce them. Local UK economies that are already strong will be able to capitalise on these changes, but poorer parts of the country could lose out further. 

Without intentional, proactive policymaking, we risk repeating the mistakes of deindustrialisation and leaving more communities behind. That means place-by-place policy interventions, rather than acting as if one size fits all. It means targeting investment at places that need it. And it means ensuring workers displaced from struggling industries are reskilled. 

Ultimately, the success of these transitions hinges on a willingness to make tough choices—deciding where and how to direct resources, which workers to prioritise for reskilling, and how to balance local needs with national ambitions. By learning from the past and acting boldly, there is a huge opportunity to build a future economy that is not only greener and smarter, but also fairer for everyone.