Financial services jobs ‘highly exposed’ in globalisation shift, report warns
The changing nature of the UK economy means it faces new challenges from the impact of globalisation, a new report argues.
Over the past few decades, the UK’s manufacturing sector has declined dramatically. Between 2000 and 2022, the share of manufacturing jobs in the economy has shrunk from 18 to nine per cent, according to the Resolution Foundation.
The fact that there are many fewer manufacturing jobs, partly as a consequence of globalisation, means there is less risk of domestic manufacturing jobs coming under threat from cheap overseas imports.
However, the UK remains exposed to global trade patterns, particularly because total trade as a share of GDP has increased from 53 per cent of GDP in 2000 to 65 per cent in 2023.
The risks are now concentrated in jobs in the UK’s dominant services sector rather than manufacturing.
The think tank said that high paid workers in the services sector are now 18 per cent more exposed to changing trade patterns than in the early 2000s. The number of sectors ‘highly exposed’ to exporting increased from 16 in 2000 to 23 in 2019.
“Globalisation is often said to pose a threat to our living standards, as jobs and industries lose out to cheaper alternatives overseas,” Sophie Hale, principal economist at the Resolution Foundation, said. “But while threat has receded in recent decades, Britain faces new and emerging exposures to trade”.
“As we have become a more open and services-based economy, it is accountants and bankers rather than factory workers whose jobs are most exposed. We need to worry less about foreign factories replacing our own, and more about foreign firms no longer wanting our services,” she continued.
The Resolution Foundation has previously argued that the UK needs to capitalise on its position as a “services superpower” to break out of its low growth trap.
Global services are expected to continue to grow as a proportion of trade from 25 per cent to 28 per cent by 2035.