By David Brown, Head of government and public sector for PwC in Scotland

ARTIFICIAL Intelligence may have first been discussed in 1950, but the reality of what it truly means for workers and industry is only now becoming apparent.

In Scotland, the use of robotics, drones, driverless vehicles and other digital innovations aimed at “smart automation” looks set to give the labour market its biggest shake-up since the demise of heavy industry in the 1980s.

The advent of artificial intelligence (AI) may have led to headlines about driverless cars being tested on our streets or drones making deliveries above them, but there remains an undercurrent of concern about what it means for the workers of today, and of tomorrow.

Just as the agricultural, industrial and computer revolutions transformed the labour market, so too will this key aspect of the fourth industrial revolution. In the mid-19th century, most UK workers were employed in agriculture and manufacturing. Today it is only around 10 per cent. And whether it is the impact of a combine harvester or lines of computer code, the principle remains the same.

Research published by PwC projects that AI could create as many jobs as it displaces, with Scotland set to see 558,000 new roles created by 2037, and 544,000 displaced. These numbers are significant, and there is a wider question on what happens to those whose jobs are displaced. Finding the right answer and acting decisively on it ensures that emerging technology becomes a positive story, consigning “the robots are coming” headlines to the recycling bin.

As AI processes become more cost-effective than human workers, jobs will inevitably be lost, but productivity will increase, leading to lower prices as firms become more competitive. Lower prices boost real income and spending levels, which in turn creates the demand for new jobs to produce the additional products and services.

PwC predicts winners and losers as AI becomes ubiquitous. Health, education and professional, scientific and technical services are all set to see increases in jobs over the next 20 years, but others such as manufacturing, transport and storage and public administration, may well see human headcounts fall.

Adaptation to this new world will require investment and political will.

As co-chair of the Growing Value Scotland (GVS) Legacy Programme at the National Centre for Universities & Business, which focuses on AI and innovation, I see first-hand how vital it is that government invests in university research centres and science parks.There must be a particular focus on the Stem skills of science, technology, engineering, and maths, as well as increased investment in art and design. It is also critical that government carefully manages adoption of AI. The PwC report warns that it is possible future roles will favour those who already have digital skills, which could increase income and wealth inequality.

In its 2017 digital strategy, the Scottish Government outlined a number of actions to support digital transformation, and this will help mitigate that risk. And in his Budget speech, Finance Secretary Derek Mackay predicted that Scotland would be “at the forefront of the digital revolution”.

This is clear commitment, and it is already being backed by results: the digital strategy helped fund the Codebase innovation hub, with which PwC now has a strong alliance. Initiatives such as Codebase help feed this revolution – and AI will play a major part in that.

Unlike the visions of artificial intelligence presented in science fiction, we should not be wary of the advance of this technology; we should embrace it, nurture it and allow it to flourish.