A recent City AM column by economist Paul Ormerod draws a striking parallel between the societal impact of artificial intelligence today and the Industrial Revolution of the late 18th and early 19th centuries, urging policymakers to heed history’s lessons as automation accelerates across industries. Ormerod revisits how mechanisation in the textile sector — particularly the shift from handlooms to power looms — not only revolutionised productivity but also displaced skilled workers and sparked major unrest, including events such as the Peterloo Massacre in Manchester. His point is that technology alone doesn’t guarantee smooth economic transitions and that leadership must proactively plan for job disruption ahead.
The article notes that early technological breakthroughs often increase overall output and reduce costs, which benefits consumers and the broader economy. However, these gains can come at a steep human cost in the short and medium term. During the Industrial Revolution, improvements in cotton spinning vastly increased production, but the later introduction of power looms destroyed jobs for handloom weavers, pushing many workers into poverty and contributing to widespread social upheaval. Ormerod warns that AI’s rapid advance could trigger a similar pattern of displacement if governments and businesses fail to prepare measures to support affected workers.
Today’s AI tools — from automating legal document review to driving efficiency in sectors like finance and services — are already reshaping labour markets, leading some firms to cut support staff even as productivity increases. Ormerod’s historical lens suggests that while new technologies may create new roles over time, the immediate effect is likely to be disruptive to existing jobs, underscoring the need for strategic planning, retraining programs, and safety nets.
This perspective resonates with broader contemporary concerns in the UK and beyond about AI’s impact on employment. For example, policymakers and economic leaders have warned that AI could displace workers on a scale comparable to past industrial upheavals, especially in entry-level and routine roles, unless there’s a coordinated effort to equip the workforce with new skills and opportunities.
