Institution of Mechanical Engineers’ response to Parliamentary inquiry into “Automation and the Future of Work”

The House of Commons Business, Energy and Industrial Strategy Committee launched an inquiry in May on automation and the future of work, looking at its likely impact on UK businesses and the potential it has for productivity, growth and re-industrialisation.

The inquiry is also considering the impact of automation on workers, and the potential benefits and choices for consumers. The automation inquiry is also set to examine the advice and financial support available for businesses seeking to automate, and for those whose jobs are affected by changes in how we work.

Below is the response submitted by Dr Jenifer Baxter, Head of Engineering, Institution of Mechanical Engineers on 9 August 2018.

The response is a collation of replies following a survey of our members asking for their views on the questions the inquiry posed.

The responses will be identified by the questions posed by the Committee and where appropriate broken down further to cover, manufacturing, biomedical engineering, automotive engineering, rail and construction.

What impact has automation had on business productivity to-date?

1. Automation has generally improved productivity across industry, but the implementation of automation needs to be handled sensitively. The impacts seen can be variable with considerable impact in areas like media, advanced manufacturing and warehousing for logistics to low impact in traditional manufacturing, retail, health care, construction and hospitality.
2. There are some examples in manufacturing with the addition of AI with automation where the manufacturing processes have greatly improved and more generally many products would not be economically viable to produce without automation in manufacturing. Concerns have also been raised that in some instances where automation has been significantly increased the quality of goods has reduced.
3. In specific industries, like Rail very large efficiencies in back room activities have been made, for example in ticketing and signalling, providing cost savings and a better service.

Could automation lead to reindustrialisation as processes and products become cheaper?

4. Automation could reduce cost for products and services, but the key question then becomes is there value added in replacing the human efforts with automation. and where is the ownership of the IP for the automation of the future?
5. Automation linked to lasers, optics and digital systems (intelligent automation) is vital for UK reindustrialisation.  This is because the UK has lower adoption of automation systems and we have lower legacy investment than other industrialised countries. Intelligent automation could/should enable the UK to leapfrog international competitors. This would give rise to increased productivity and cheaper products with higher levels of customisation that has been possible previously.
6. In the case of the construction industry, there is the potential through the rise of modular buildings to take advantage of automation to increase productivity and reduce costs. Factories are able to produce pre-fabricated panels that are taken by freight to the construction site, these are then assembled as a building. Additionally, 3D printers are now able to "print" an entire house in 24 hours, production of such high end 3D printers could represent an opportunity for reindustrialisation and leadership in the field for the UK.
7. The main disadvantages that the UK will have to overcome include high land costs, high labour costs and the challenges of maintaining employment. There could be a significant cost advantage for SME manufacturing, but the upfront capital costs have been a barrier to introducing greater automation.

Which sectors are most likely to be affected by a growth in automation?

8. It is likely that we will see an increase in automation in all industries. In the automotive sector, automation is well advanced in R&D and manufacturing, but the use of automation in vehicles and in services provided to consumers is a major growth area where the role of automation and autonomous activities will become linked to the Internet of Things.
9. For high value products where the quality and repeatability of the product is paramount, automation will continue to be used for precision. Medical devices manufacturing, transport, logistics, finance and construction will also see increases in the use of automation and very likely autonomy.
   Sectors that are currently the most labour intensive are the prime targets of automation, but this comes at a human cost. Sectors like arable farming, and industries relying on low skilled staff are largely untouched by automation.
   Construction will continue to be changed dramatically by automation through the use of technologies, such as, drones being able to lift objects, robots doing precise tasks and offsite manufacturing of buildings.

What sort of tasks are most and least likely to be replaced by automation?

10. Most likely
    •  Repetitive tasks in high-volume production would be the most likely to be replaced.
    •  Assembly steps, functional testing, quality control. Repetitive tasks, hazardous tasks - environment, health, safety, any task that can be process controlled
    •  Manual operations in construction and traditional manufacturing and logistics as well as white collar tasks in finance, telecommunications and ICT.
    •  Tasks defined by a set of unambiguous set of rules and those requiring high accuracy. However, with emergence of AI, tasks are likely to become more complex and less deterministic.
11. Least likely
    •  Low-volume production tasks and those requiring high levels of creativity or dexterity.
    •  High volume processes that already benefit from high levels of automation, made to order highly custom products. These can be in any sector.
    •  Any tasks that benefits from human interaction - e.g. high-value sales/relationship management.

Is there enough advice and support available for businesses who want to automate?

12. There is advice from automation vendors and consultants and occasionally from Universities available to those who seek it out, but the coverage of business needs is sporadic. The quality of advice given is highly variable and there are concerns over impartiality.
13. Commercially there is a lot of expertise available, however with the emergence of AI and autonomy, much of the technology and expertise is still under development or even in research stage. Hence technology developers, whether in Universities or commercial organisations, need to be encouraged to develop support and application capabilities.
14. The High Value Manufacturing Catapult has a fund to reach out to SMEs that want to automate but the funding available is inadequate (£14m p.a. for all SME support). It is difficult to support more than a few hundred companies each year especially considering the variability of sectors undergoing automation changes.

Does the Government’s Industrial Strategy offer the right support to businesses for automation?

15. It is not clear what the Government’s role is in providing advice on the role of automation in industry. There does not appear to be the capability or resource within BEIS to provide the required level of support and funding is certainly inadequate to support the needs of UK plc to become a leader in automation industrialisation.
16. There is a level of general level of support via the Growth Hubs operating in the LEPs, but the quality and consistency of support offered is highly variable as mentioned previously.

What opportunities are there for British tech businesses from a rise in automation? How can these opportunities best be exploited for the benefit of British industry?

17. There are a number of different opportunities that fall into three main categories. The application of all of these will lead to the UK having the option to export higher quality bespoke items that are not available from other countries as well as creating smarter infrastructure that is fit for the 21^st century:
18. Software and interface applications: This is in the development of new technologies that support automation integration activities. Integration and interfaces that make the new automation system user friendly.
19. Thought leadership and research: Continued support of research and development activities at centre’s Like the Manufacturing Technology Centre (MTC) that develops and tests innovative manufacturing technologies in a low risk environment.
20. Teaching and learning: Expansion of programming education and training to include control theory and interface technology.

Are there specific demographic groups most at risk?

21. It is likely that both skilled and unskilled workers in different sectors will be at risk from greater automation. For skilled workers, those working in engineering, medicine, finance, telecoms and ICT are at some level of risk. For unskilled workers those in manufacturing, logistics, agri-tech and transport are at early risk. When VW automated their body shop they reduced workers in body shop from 4000 to approx. 100. But because of improved quality and lower cost total workforce, they increased the pay of those in employment.
22. The over 50s demographic may be less adaptable to a fast changing automated environment and are particularly at risk.

How far can these be mitigated by new roles in these industries?

23. There is always going to be a displacement of opportunities, but a detailed analysis is needed concerning the rate of value adding from such displacement.
24. There needs to be a variety of retraining opportunities, not just learning to work with automation and this needs to be delivered in a non-ageist way. It is incumbent on industry and Government to provide the necessary funding and opportunity to retrain (upskill) displaced employees enabling them to be re-employed in higher skilled, higher paid, higher value jobs.
25. Providing a sustained education and re-skilling process should form the basis of ensuring the future of work for current and future generations. A major concern is that the current education system is not equipping young people with the skills to enter an automated world - in both numbers of technicians and graduates and in the skills they are learning. This is probably the single biggest risk the UK faces and needs sustained action by Government. The Institution of Mechanical Engineers has a number of reports identifying how better education programmes for engineering can be achieved.
26. A further thought beyond the boundaries of the existing system is that automation brings more wealth that means a different employment paradigm could be envisaged whereby individual’s time is fulfilled in different ways.

What are businesses doing to offer training to staff, either as a result of or in support of automation?

27. The response across industries is variable. There is growing awareness of IoT and Industry 4.0 activities and technologies and businesses are seeking ways of dealing with these issues. However as mentioned in the previous section, the burden cannot just fall on industry. The education system needs to step up to produce students with the right skills to be fast starters in the new world of automation. This becomes particularly important when new starters as technicians need to use and understand assistive equipment and there is an urgent need for control / automation hi-tech apprenticeships to fill spaces already beginning to appear.
28. The apprentice levy can and should be used to upskill displaced employees. Organisations like the Manufacturing technology Centre have been delivering automation solutions to UK manufacturing companies since 2011. In every case displaced employees have been retrained (up-skilled) and no jobs have been lost. The processes used by MTC can be applied to other industries ensuring they maintain a skilled and up-to-date modern workforce. The challenge really begins now as much is unknown due to the multitude of technologies on the cusp of becoming widely available and this makes it difficult to know what to prepare for. Many workers in construction are contract staff and will not receive additional training to bring their skills up-to-date and this creates a poverty of knowledge for staff on short term rather than long term contracts.

Should Government have a role in retraining workers affected by automation?

29. Yes as described above through the education system, apprenticeships and retraining programmes.

What other actions should the Government be taking to support those affected by automation, such as a ‘robot tax’?

30. The Institution of Mechanical Engineers does not support the idea of a ‘robot tax’, although we fully understand the idea that this could support the welfare state. It is believed that this would reduce the UK’s competitiveness and be damaging to businesses.
31. There needs to be a clear and sustained vision from the UK Government on the role of automation and work. Options include:
    •   An education system that is intrinsically linked to an automated and connected future at all levels.
    •   For every job lost to automation there must be at least one, higher value adding job created in the economy, for automation to be an economically viable solution for the economy.
    •   Reduce the number of hours in a working week. Britain works longer hours than any other major European rivals. As we have seen with innovations like the internet, rather than reducing workloads it has created a continuously connected working life making it hard for people to gain a good work-life balance and a future of greater automation must look at expectations of productivity within the hours we work.

What are the potential benefits and disadvantages for consumers of businesses increasing automation?

32. As consumers very few disadvantages. However consumers are also, generally, employees, who will need to adapt to retain employment.
33. For businesses, advantages are consistency and cost. Eliminating the spending power of consumers by rendering them unemployed will, however, need to be duly considered.
34. Cheaper and faster products for consumers. Employees have more free time, greater productivity, guaranteed consistency of products.
35. Disadvantages: Less of a personal touch, mass unemployment, new Luddite uprising i.e. social backlash to automation, higher utility bills.
36. There are many aspects of this to be considered, particularly with the speed of integration of new technologies into incumbent systems. There is no simple answer to delivering a complex connected system for the 21^st, but it is a certainty that automation will creep into all industries and aspects of our lives.

Contributors:

Railway Division
Mechatronics, Informatics and Control Group
Automobile Division
Biomedical Engineering Division
Construction and Building Services Division
Manufacturing Industries Division