Increasing use of robotics could mean the end of up to 15 million jobs in the UK, according to a speech by Mark Carney, governor of the Bank of England, on Monday.
He told an audience at Liverpool University that the world is "in the midst of a technological revolution that is once again changing the nature of work" and warned that some entire professions could be eliminated.
Carney painted a daunting picture of the challenges that the UK is facing in his lecture entitled “The spectre of monetarism”. “We meet today during the first lost decade since the 1860s,” he pointed out. “In the wake of a global financial crisis. And in the midst of a technological revolution that is once again changing the nature of work. Substitute Northern Rock for Overend Gurney; Uber and machine learning for the Spinning Jenny and the steam engine; and Twitter for the telegraph; and you have dynamics that echo those of 150 years ago.”
He considered the factors behind today’s low income growth and growing inequality in the developed world and the anxiety and distrust caused by the financial crisis of 2008.
“Globally, since 1960, real per capita GDP has risen more than two-and-a-half times, average incomes have begun to converge, and life expectancy has increased by nearly two decades,” he said. “Despite such immense progress, many citizens in advanced economies are facing heightened uncertainty, lamenting a loss of control and losing trust in the system. To them, measures of aggregate progress bear little relation to their own experience. Rather than a new golden era, globalisation is associated with low wages, insecure employment, stateless corporations and striking inequalities.”
He went on to admit that “trade and technology do not raise all boats” – saying there is “a disconnect between economists and workers”. As in the 19th century, new technology does, and will, threaten jobs. “The combination of open markets and technology means that returns in a globalised world amplify the rewards of the superstar and the lucky. Now may be the time of the famous or fortunate, but what of the frustrated and frightened?” he asked.
However, although the rise of robotics is a trend that should be on the risk radar for individuals, organisations and governments, the accountancy profession has been quick to deny that it will mean the end of accountants – although it may well change the look of finance departments and teams fundamentally.
“Mr Carney is absolutely correct in noting the huge impact that automation will have on the accounting profession. However, I wholly disagree with the notion that the ‘rise of the robots’ signals the end of accounting,” said John Williams, head of ACCA UK. “And if artificial intelligence did signal the end of accountants, it would also signal the end of central bankers,” he added.
However, Williams did agree that many processes that are currently manual, time-consuming and prone to human error should be automated in future, leading to more scope for accountants to focus on things that robots cannot do, such as forming relationships and generating ideas.
Similar concerns will affect internal auditors. While increased automation will create new challenges for internal audit, in finance and elsewhere in the business, it will also create opportunities. Many routine checks will be increasingly automated, removing some time-consuming work for internal audit and allowing them to focus on more complex areas. Robots could also generate new forms of assurance and reduce risks such as human error and fraud.
Not surprisingly, Andy Bottrill, regional vice-president at BlackLine, focused on the positive side of robotics. He argued that increasing use of robots would be essential to robust growth: “Based on our 2016 research conducted with UK business decision-makers at medium and large enterprises, we found that even in a growing economy more than three in five (63 per cent) of respondents noted that sound financial and accounting processes and systems are the most important elements of well-managed growth,” he said.
Carney emphasised the role of the Bank in trying to generate more inclusive growth – but added that this ultimately depends on business. His speech carried a clear message for internal audit about the need to hold organisations to account and to help to restore public trust in private enterprise and capitalism.
“Speaking hard truths is part of how central banks can reinforce the foundations of more inclusive growth. The paradox is that one of our jobs is to reduce uncertainty by identifying risks. This requires coming straight with the public as the Bank of England did around the EU referendum. And it requires being clear about what we cannot do. Long-run prosperity is not in the gift of central bankers. It depends on a much wider set of initiatives of our elected representatives, and ultimately, on the actions of the private sector.