The UK economy is at a pivotal moment. Two years on from Covid, and it remains the only country in the developed world where people have continued to drop out of the labour market in greater numbers beyond the pandemic.

Rates of economic inactivity have risen and vacancies in the hospitality, health and technology sectors are proving hard to fill. At the same time, automation and the acceleration of artificial intelligence (AI) technology risk spreading fear and anxiety among workers. The UK is experiencing new forms of polarisation between good and poor-quality work.

How the government responds to the challenges the current jobs market presents is crucial. Yet we still do not have a cross-department council, strategy or minister to coordinate and drive the “future of work” agenda.

A new report from the Business, Energy & Industrial Strategy select committee highlights the obstacles the UK faces in seeking to deliver sustainable, inclusive growth. It also highlights a remarkable range of labour market challenges, even though unemployment levels remain close to a record low. But what is missing from the report, and indeed from the government’s vision, is a focus on the importance of “good work”.

This is work that is more than just employment, it is work that promotes dignity, autonomy and equality; work that has fair pay and conditions. The government often focuses on unemployment figures as a metric for whether the economy is doing well. But the data that we have shows that increasing the number of professional jobs in a local area can no longer be seen as a vehicle for reducing the amount of mundane, low-quality work in that area.

The government appears to be putting huge store in technology and automation to drive growth and create “better jobs and better opportunities”. The problem with this is that new technologies do not automatically create better jobs.

Without a focus on human values and agency, automation can seriously detract from people’s experience of work. The BEIS report cites the adoption of AI by firms such as Amazon and Royal Mail as creating “anxiety, stress, unhappiness and overwork”. Surveillance systems are “leading to distrust, micromanagement and, in some cases, disciplinary action”. This is not about “robots taking jobs” – this is about automated systems eroding conditions for workers and diminishing job quality when people are not at the heart of it.

It need not be this way: automation can build good work. Tools such as ChatGPT can speed up mundane tasks, freeing up workers to focus on more complex and creative tasks. Well used, an AI system in education could do the heavy lifting on analysing pupil data, for instance, allowing teachers to focus on spending more time teaching students.

While more research is needed into the impacts of automation on work and people, we do know that, to get the best results from automation, much higher levels of investment in human capabilities are needed alongside investment in hardware and software. In short: we need to invest in people, not just tools. Investment in this context is not about the amount spent on software or training to use a system, it is about an orientation towards human agency, about people feeling they are being invested in.

We can be ambitious for the future of work and have an optimistic, forward-looking approach to the responsible design, use and governance of advanced workplace technologies. But to deliver this we need an overarching, proactive and systematic framework of regulation to be developed that requires pre-emptive evaluation of how these tools might affect access to work, conditions of work, and the quality of jobs.

Better-quality jobs protect people and communities against health, social and economic shocks, and focusing on good work as technologies are introduced – as we have modelled here – would not simply offer protections against job losses, but actively seek to build a better labour market, one that shares the benefits of automation as widely as possible.

• Anna Thomas is co-founder of the Institute for the Future of Work, an independent research body exploring the impacts of technology on working lives. She established the UK’s future of work commission, the all-party parliamentary group on the future of work and the Pissarides Review into Work and Wellbeing