After the Covid-19 pandemic, how will the Fourth Industrial Revolution impact the Liverpool City Region?
Carl Hughes

Carl Hughes

Carl Hughes, at the University of Liverpool, is a PhD student researching into the impact of the Fourth Industrial Revolution on the relationship between capital and labour.

After the Covid-19 pandemic, how will the Fourth Industrial Revolution impact the Liverpool City Region?
The recent Supreme Court ruling that Uber drivers should have the same rights as regular employees reminds us that workers must prepare for the threat that new technologies will be harnessed to attack our conditions.

Here, Carl Hughes from the University of Liverpool, looks at the possible impact of the Fourth Industrial Revolution and how we may address it.

The Fourth Industrial Revolution is a phrase that has become common over the past few years, a catch-all term for the latest wave of technological development.

The First Industrial Revolution was marked by the arrival of the steam engine and the mass migration of agricultural labour into industrial factories and towns.

The Second Industrial Revolution saw the introduction of electricity, chemical production and the internal combustion engine. The Third Industrial Revolution was driven by the development of microprocessors and computing.

Although exact definitions may vary, some key components of the Fourth Industrial Revolution are the integration of physical and digital systems (e.g. smart devices), huge advances in manufacturing (e.g. 3-D printing, robotics) and advances in Artificial Intelligence (AI) and machine learning (e.g. self-driving vehicles).

Coal, electricity and oil were the fuel that fired the earlier industrial revolutions, but the Fourth is driven by something much less tangible – data. One of the remarkable things about the Fourth Industrial Revolution is the speed with which technological development is taking place, however the huge potential benefits that this can bring also come fraught with danger.

The speed of technological change has facilitated the growth of monolithic global corporations such as Amazon, Google and Facebook in a relatively short period of time. This raises questions of how accountable such companies are to democratic institutions and in whose interest technology is being implemented.

Even before the onset of the Covid-19 pandemic, the Fourth Industrial Revolution promised to transform the world of work everywhere – and the Liverpool City Region is no exception.

But how are these impacts likely to be felt across the city region? A 2017 estimate from the Office for National Statistics (ONS) show that the Liverpool City Region as a whole had a mid-ranking probability of automation, with an average of 47.3%, varying between 44% in the City of Liverpool (comparatively low) and 52% in St Helens (comparatively high). 

Automation poses a significant potential risk for the workers of Liverpool City Region, if it is not managed effectively.

One of the observable impacts of the pandemic has been to speed up automation in many sectors, in order to minimise social contact. One example of where this has happened, that has strong relevance for the Liverpool City Region is in the hospitality industry.

App-based ordering had already begun to appear in large chains such as Wetherspoons before the pandemic hit, but in the periods where hospitality businesses have been allowed to reopen, app-based and online ordering and payment systems have become a common sight, including in many smaller chains and independents.

This trend would have become more prevalent even without the pandemic, but perhaps at a much slower pace.

All of this is likely to lead to a permanent shift towards automated ordering and payment systems. As restrictions are lifted, the greater exposure of customers to such technology and the greater convenience that it offers, will coincide with the huge pressure there will be on debt burdened, lockdown weary businesses to cut costs.

Demand for staff is likely to fall, with redeployment an option as staff will be needed to deliver food and drink to tables and collect used items.

Overall, automation will mean that hospitality businesses will be able to do this with less staff than before. In a region with a previously strong hospitality sector (that provided 45,000 jobs in the City Region in 2019, 6.9% of the total), this could be a real problem.

It is not only in the hospitality sector where jobs are threatened. A 2018 report on automation by Pricewaterhouse Cooper (PwC) estimates that over three waves of automation between 2018 and the mid 2030s, that Transportation and Storage is the sector with most jobs at risk, with manufacturing close behind.

Imagine the effect of this in a place like Knowsley given the importance of Knowsley Industrial Estate where many jobs fall into these sectors. A 2017 report estimated that of 66,000 jobs in Knowsley, 12,000 were in manufacturing, with a further 4,000 in transport and storage.

Administrative and support services and public service and defence are sectors that are also listed as having over 30% of jobs at high risk of automation.

This is a further area of concern for the Liverpool City Region, given the administrative public sector jobs in government departments such as the Home Office, Passport Office and HMRC. Bootle has already suffered a significant blow from the upcoming relocation of HMRC staff from its office in the Triad building to a central office in Liverpool City Centre.

Given the potential for automation combined with likelihood of further cuts and privatisation of the public sector under the Tory government, there is a possibility that many of these jobs will disappear from the region completely in the coming years.

Automation also means parts of a job can be automated, rather than the whole job, and it is likely to be the case that many jobs change rather than disappear.

There are also various technical and economic factors that will act to slow down automation and there will be new types of jobs created as technology develops, meaning that the net effect on jobs will be less than the headline figures suggest, although still potentially significant.

After the pandemic, there is likely to be significant turmoil as workplaces readjust. In the ‘build back better’ plans capital will seize upon the opportunity to use this as an attempt to drive down the wages and conditions of workers.

We have already seen this in the shameful ‘fire and rehire’ attempts by companies such as British Airways, British Gas and Go North West.

With the right strategy and investment, the Fourth Industrial Revolution could provide the Liverpool City Region with the opportunity to pivot towards a more productive, higher-skilled economy.

The development of strong municipal and co-operative sectors could alleviate many of the health, social and economic issues prevalent in our communities by drawing on the technologies.

We should reject the way companies such as Amazon and Uber use technology to further exploit workers and drive corporate profits up. Instead, we need to embrace the opportunity to use technology to automate as much dangerous and unfulfilling work as possible, sharing the benefits fairly, allowing for a reduction in the working week and the distribution of more secure and fulfilling work.

Part of building back differently for the Liverpool City Region is how we articulate that vision. We should consider automation alongside the steps outlined elsewhere by Beacon to democratise local governance, democratise ownership structures and demand greater powers of devolution.

This is not just ‘something for the future’, a can to be kicked down the road indefinitely, in much the same way as vague commitments around climate change, a ‘green transition’ or a net-zero carbon economy have been.

With important elections just around the corner, now is the time for the leaders in our city region to stand up and lead the fight for the autonomy and powers that we need.

Continued inertia in the face of brutal government cuts and a complicit national Labour Party leadership is simply not good enough.

The political leaders in the City Region must be prepared to not only embrace a vision that would lead to such tangible improvements on health, economy and well-being for all citizens, but to actively lead the charge to see it through.


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