Professor Sir Christopher Pissarides opened the Royal Economic Society Annual Conference 2026 by examining how artificial intelligence is affecting jobs, skills and workplaces, and what governments and employers should do next.
Artificial intelligence has prompted sharply different predictions about the future of work. Some expect large productivity gains and widespread automation. Others warn of job losses or more serious risks.
In his Presidential Address, AI Disruptions in the Labour Market, Professor Sir Christopher Pissarides argued that the current evidence supports a more cautious view.
Professor Pissarides, who was awarded the 2010 Nobel Prize in Economics with Peter Diamond and Dale Mortensen, drew on research conducted through the Institute for the Future of Work. His lecture examined how businesses are using AI, where its effects are already visible and how the UK can prepare for further change.
What do we know about AI and jobs?
Professor Pissarides began by highlighting the uncertainty surrounding AI.
Predictions about its effects on employment and productivity vary considerably, including among economists and those developing the technology. His assessment was that significant productivity growth is unlikely in the immediate future.
Current business use also remains relatively limited. Many employers report using AI, but this often involves simple applications such as search tools or large language models. The clearest change so far has been to workflows and the tasks performed by workers and managers.
Professor Pissarides said there was currently little evidence of widespread job destruction or appreciable productivity gains resulting from AI. Workers are using it as a tool, while businesses are still deciding where and how it can be applied.
“The question is, who is right and who is wrong? And the answer is, we don’t know.”
Professor Sir Christopher Pissarides
Where are jobs beginning to change?
The lecture identified some areas where the effects are becoming clearer.
Professional services may be among the first to experience changes in recruitment. Professor Pissarides gave the example of law firms, where senior lawyers can use large language models to complete some of the work previously given to paralegals and junior staff.
This presents a longer-term problem for professions that have traditionally relied on junior roles as an entry point and a route to more senior positions.
At the same time, AI is increasing demand in other areas. Professor Pissarides pointed to data centre construction, cybersecurity, IT maintenance, programming and data analysis as examples of work supported by greater investment in digital technologies.
Many of the transitions taking place are within organisations. Workers are changing roles or taking on different tasks rather than leaving their employer altogether.
The lecture also challenged the assumption that every job will be transformed by AI. Professor Pissarides estimated that around a third to 40% of jobs may remain largely unaffected, particularly work involving personal care, hospitality, communication and empathy. These jobs face a different challenge: improving pay when there may be limited scope for productivity gains.
The UK’s regional divide
Professor Pissarides also presented research examining technological adoption and readiness across England.
The study found that activity was heavily concentrated in London, Oxford and Cambridge. These areas benefit from strong universities, infrastructure, skilled workers and access to venture capital.
London accounted for around 60% of venture capital investment included in the research. Cambridge and Oxford also performed strongly, particularly in medical research, deep technology and university spinouts.
Other cities, including Manchester, Birmingham and Bristol, showed strengths, but large differences remained between regions. Professor Pissarides argued that the UK needs to do more to support the application of new technologies outside London and the wider South East.
The regional gap was driven less by general education or infrastructure and more by where investment was directed. This leaves parts of the country with the skills to adopt new technologies but fewer opportunities to do so.
Which skills will workers need?
Analysis of online job advertisements showed continued demand for communication, management and customer service skills, reflecting the importance of services to the UK economy.
Demand for technical skills is also increasing. Data analysis appeared in 8% of the advertisements studied in 2016, rising to 12% in 2024. Employers are also seeking people who can use digital tools to solve problems rather than simply apply a narrow technical skill.
Professor Pissarides warned against excessive specialisation. As tools change, workers will need a broad base of knowledge and the ability to continue learning throughout their careers.
“The best skill that you could possibly have nowadays is learning how to learn in the future.”
Professor Sir Christopher Pissarides
The role of employers
The way AI is introduced into workplaces will affect whether workers support or resist it.
Research discussed in the lecture found that businesses with stronger employment practices found it easier to introduce new technologies. Workers valued autonomy, flexible working, opportunities to develop their ideas and clear communication from management.
They were more concerned about workplace surveillance, uncertainty over which skills would remain valuable and being left with repetitive tasks that technology could not perform.
Professor Pissarides argued that employers should involve workers in decisions, set agreed limits on surveillance and test AI systems for bias. Investment in worker wellbeing and training could make it easier for businesses to adopt new tools successfully.
Preparing for further change
Professor Pissarides concluded that governments should develop regulation before more advanced forms of AI become widely available.
He supported regulation based on different levels of risk, while warning that unclear or excessive requirements could hold back investment and business growth. He also argued that the UK and Europe should focus on areas where they already have strengths, including finance and life sciences.
His final recommendations focused on four areas: supporting workers as they move into new roles, widening investment beyond the South East, developing regulation and paying closer attention to the quality of work.
Watch the full Presidential Address
This article covers some of the main points from Professor Sir Christopher Pissarides’ Presidential Address, including findings from the Institute for the Future of Work and his recommendations for employers and policymakers.
The full lecture and audience Q&A are available to Royal Economic Society members through the RES Members’ Portal.
Please log in to watch the recording or become a RES member to access this and other selected keynote lectures from the Annual Conference 2026.