Global Economy Watch

Each month PwC's Macroeconomics team presents the Global Economy Watch, a short publication that looks at the trends and issues that are affecting the global economy and details our latest economic projections for the leading economies of the world.

Rise of the robots - good news or bad for businesses and society?

Waves of innovation have always shaped the way households, businesses and society operate and interact. Technological progress has also been the key driver of rising standards of living, particularly since the Industrial Revolution.

However, recently the debate has focused on the impact that technological change will have on the labour market. We have previously argued that technology can actually create jobs and we believe in some sectors, for example, where human contact is important, there is currently less scope for robots to replace people.

It is however likely that future technological change will eventually displace some workers, though these is some debate as to exactly how many jobs are at risk. This would obviously impact workers who could face lower job prospects, but there would also be knock-on implications for society and on the level of income inequality.

Linked to this, we examine how policymakers can combat rising inequality by looking at a range of large and small rich economies who have managed to contain income inequality, and have identified a common set of stylised

policies they follow. These are to:

  • Provide equal educational opportunities;
  • Support low income workers; and
  • Maintain a fair and transparent tax and public spending system.

We also assess whether it is sufficient to look at GDP when assessing the extent to which Western economies have recovered from the financial crisis. Our analysis shows that household spending growth per person has not kept pace with real GDP growth in most advanced economies. In the UK, for example, real household spending per person is still lower than its pre-crisis level.

We also continue to monitor developments on Brexit as post-referendum statistics are gradually being published in the UK. Taking these changes into account we are still expecting GDP growth to slow next year, but are now projecting UK growth of around 0.9% in 2017 (up from 0.7% previously). At the same time, a falling pound could push inflation back above its 2% target by 2018. We will have more to say on this in our next UK Economic Outlook report, which will be published in mid-November.

Rise of the robots - good news or bad for businesses and society?

loading-player

PwC's Barret Kupelian discusses the impact that technological change could have on the labour market.

Related content

UK economic outlook

How secure is the recovery?

Brexit global insights

The UK's decision to leave the European Union has far reaching implications for business and governments around the world.

The EU referendum

The UK public have voted to leave the EU which will have significant implications for businesses.

Contact us

Barret Kupelian
Economist
Tel: +44 (0)20 7213 1579
Email

Conor Lambe
Economist
Tel: +44 (0)20 7212 8783
Email

Follow us