The City of London's prized professional services sector, responsible for generating billions in revenue each year, is staring down the barrel of an existential threat. A new report from the Organisation for Economic Co-operation and Development (OECD) has warned that workers in London face a higher risk of job displacement due to artificial intelligence than their counterparts in any other major global city. The findings paint a stark picture: nearly four out of five jobs in London are highly exposed to AI, either immediately or in the near future.
According to 2022 data cited in the OECD report, this puts London ahead of significant economic centres like Washington D.C., Zurich, Ontario, and Berlin in terms of AI exposure. The UK as a whole ranked second among countries with jobs susceptible to new technology, behind only Luxembourg. This raises pressing questions about the resilience of the UK's professional services sector and the nation's ability to adapt to an increasingly automated workforce.
The report's warning extends beyond the immediate impact on jobs. It also highlights concerns about the UK's AI talent landscape. Over the past two years, the relative growth in hiring for AI talent in the UK has trailed behind that of the EU, Canada, Australia, and the US – a trend mirrored by New Zealand. This suggests the UK may be struggling to prepare its workforce for the evolving demands of an AI-driven economy, potentially exacerbating job displacement.
Some London businesses, including Starling and several 'Big Four' consultancies, have already begun integrating AI into their operations – often with a focus on reducing headcounts. However, the full economic impact remains uncertain. The Office for Budget Responsibility (OBR) has previously suggested that AI could significantly boost productivity growth, potentially by up to 0.8 percentage points annually. But it has also warned of a scenario involving substantial labour reduction, where the wage and salary share in the UK economy could halve by 2075, leading to a dramatic fall in tax receipts.
Responding to these concerns, Mayor Sadiq Khan has introduced plans to upgrade AI training for prospective workers, while Labour's appointment of Nobel laureate Simon Johnson to lead an institute dedicated to analysing AI's effects on the UK jobs market underscores the seriousness with which this issue is being treated at a national level.