The automation of tasks and jobs by new technologies is one of the most significant forces shaping the global economy, in ways comparable to the Industrial Revolution. Yet, despite considerable research on technological transformation, little is known about how technology, and particularly automation, is disrupting UK labour markets and what the impacts of this are on people and society.

This knowledge gap is largely a product of a lack of quality and systematically collected data on technology use and adoption by UK businesses, meaning that there is no record of the amount of automation that has occurred at a sufficiently granular level to be useful for policy makers and economic strategists.

The Pissarides Review will enable a better understanding of the nature and trajectory of technological disruption on the UK labour market and aims to look forward to how to ensure the transition of the labour market serves to build a future of better work across the country.

Labour market frictions

Framing this Review is Pissarides’ theory of labour market frictions. Building on this seminal work, we have designed a new, multi-disciplinary approach to understanding how and why workers are exposed to ‘frictions’ associated with technological disruption.

Frictions are manifested along three dimensions:

1. Skills friction, caused when skills requirements rapidly change

2. Information friction, resulting from uncertainty about who will be affected and how

3. Geographic friction, as local jobs are shed, and new work is located elsewhere.

Each friction has associated economic and health consequences for affected groups. We hypothesise that the extent of each friction will be unequally distributed between demographic groups and regions.

The period of technological change we are currently living through is largely defined by a growing rate of adoption of automation technologies across both manual and non-manual occupations, in services and manufacturing, and in operational and administrative functions.

This is simultaneously reducing the demand for labour in tasks that can be done by programmable equipment, while also creating new tasks which are complementary to machines, and augment human work.

This transformation, driven by technology but ultimately depending on how business leaders and workers are responding to it, will have an impact on how much work is created and what it is like.

Existing evidence also shows that the adoption of technology associated with automation has accelerated through the pandemic and that impacts of technological disruption are unevenly distributed.

Many businesses and institutions are at a critical juncture in terms of response to these multidimensional policy challenges. However less is known about how different management philosophies and practices with respect to the management of employees may impact the decision to adopt technologies, the implementation process, and associated outcomes for workers.

The Pissarides Review will provide new insight into the factors that influence investment into automating technologies at the firm level, and how management and human resource philosophies impact outcomes for workers and firms through the process of technology adoption.

An individual’s and employer’s choice about work are constrained or enabled by place. By the standards of OECD countries, the UK enters the current period of rapid change with very high regional inequalities. As such, addressing regional inequality is of increasing importance across the political spectrum. However, granular research and proposals to guide this ambition are often lacking.

As significant efforts are made to encourage ‘reshoring’ back to the UK, and supply chains are reconfigured to reduce risks, some traditional occupations will become obsolete. New tasks and roles in both the public and private sectors are likely to be created in different industries and regions, resulting in pronounced geographic challenges as individuals may be expected or required to relocate to seek work.

There is a risk that wealthier areas of the country will benefit more from the new technologies, widening the gap with the poorer regions. New opportunities and demands will certainly not be experienced uniformly and are likely to highlight old and new barriers to relocation, which is difficult and expensive.

Through local area surveys, worker interviews and place-based institutional analyses, the Review aims to highlight the groups and communities across the country that are most vulnerable to the effects of technological transformation, and to consider the way public policy choices are realised and embedded in place.

There is a well-established relationship between work and health and wellbeing. Good work promotes health, providing a good standard of living, sense of dignity and autonomy, the opportunity to grow and flourish, along with social networks and support. Bad work can do the opposite, locking people into working poverty and reducing their sense of security, purpose, and control.

Regional and demographic inequalities of income and job security in the UK have trickled through to become inequalities in health and wellbeing, as recently exposed by the pandemic.

The Pissarides Review will explore the relationship between labour market change and work, health, and wellbeing outcomes, with regard to differential impacts on demographic groups across local labour markets.

Public institutions such as government offices, universities and schools are organisational forms structured by ideas, social norms, and laws and regulations.

Many institutions are at a critical juncture in terms of their response to the multidimensional policy challenges currently facing them, and the recent pandemic has brought new uncertainties concerning the nature and pace of technology adoption; who will be affected; how, where, and when.

Education and retraining offers, welfare support and social services provide resources which individuals can harness within the context of this transition, though these are not consistently available across the country. The Review will identify the institutions which impact individual capabilities at work and will design new policies and strategies to address disadvantages and alleviate the risks of automation.

The impacts of technological transformations are unevenly spread and can create or entrench inequalities, not only for individuals, but between demographic groups, communities, and regions.

Following the pandemic, unemployment has rocketed to record levels, particularly amongst younger people, Black, Asian and minority ethnic workers and the low paid. Many of those still in work have lost pay and hours, especially in sectors involving high levels of human contact. Overall, the pandemic has exposed and hastened many of the same vulnerabilities that are associated with technological transformation. The Review aims to understand how technological disruption in work, overlaid by the pandemic, is affecting inequalities.

Within the context of technological transition, there are many factors beyond an individual’s control which determine their ability to be and do what they desire. Our choices and opportunities are often subject to the choices of institutions and policies around us, which can differ significantly across the country.

The Review will explore the following in relation to the worker themselves:

1. Choice and opportunity: whether a particular policy, or socioeconomic context, constrains or enables people to live the kind of life they want to live, as opposed to whether the intervention led to some outcome determined by the researcher or policy maker.

2. Identity: the implications of automation technologies on the identities of workers and how this is changing due to the current transition.

3. Skills, education, and training: as skills requirements change, workers are required to learn new and higher-level skills. Skills need to be learned at work, but as many workers are now facing higher risk of unemployment, the impact of the skills friction is exacerbated. Education and retraining offers, welfare support, and social services provide resources which individuals can harness and turn into functionings. Decisions made by local institutions and policymakers will shape these opportunities.