UK could use AI to increase its GDP by £550 billion by 2035
47% of small and medium enterprises don't use AI
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Microsoft commissioned Public First to research how AI could improve the UK’s economic growth. The consultancy used a mix of comprehensive economic data modeling and surveyed over a thousand senior business decision-makers to gather results. In addition, Public First analyzed digital technology opportunities, necessary investments, and current barriers to AI adoption.
How will AI affect the UK GDP?
According to the report, the GDP of the United Kingdom could increase by £550 billion ($679,1 bn) by 2035. For that, the UK should adapt to AI and cloud technologies. Also, the predictions estimate that for every £1 spent by companies, the economy could rise by £5. Thus, the estimated Return on Investment (ROI) could get higher than 5:1 in the next decade.
In addition, the United Kingdom has the most advanced tech sector in Europe. On top of that, in 2021, the UK government launched the National AI Strategy, a 10-year action plan. Also, since 2016, more than £20 ($25,3 bn) billion has been invested privately into the country’s AI companies. However, according to the report, if there are AI advancement delays, the economy could lose £150 billion ($190 bn) by 2035.
What could delay the AI advancements of the United Kingdom?
The UK faces a few challenges that could slow down AI advancements. The first bottleneck is the country’s infrastructure. The United Kingdom covered 1.3% of global computing capacity in 2022. On top of that, AI development requires adequate data centers, an advanced digital technology infrastructure, a supply of powerful hardware, and experienced AI users.
The second issue is that 47% of small and medium UK enterprises don’t use AI, and 31% don’t use cloud services. Thus, there aren’t many experienced AI users. The country should help small and medium businesses harness the power of AI and digital technology to fix the issue.
The last challenge is fixing the digital skill shortage. According to the research, two-fifths of businesses barely find people with IT and data analytics knowledge. On top of that, it is harder to find employees with specific AI-related skills like prompt engineering.
The UK could also use AI to improve its public sector. In doing so, the country could save £17 billion ($21,5 bn) by 2035. However, that’s just enough to cover the salaries of 330,000 nurses, according to the report. Also, the National Health Service (NHS) uses AI tools to support early cancer and disease detection.
Will AI create jobs?
Contrary to some beliefs, AI will not lead to job losses, especially in the short-to-medium term. After all, there is an increase in AI job demands. Additionally, employees could use it to develop new skills and to work more efficiently. For example, people could learn data and prompt engineering.
Microsoft UK made a huge investment to train one million people to use AI. After all, AI can help in financial services, professional services, health, biotech, and science. In addition, Microsoft invested £2.5 billion ($3,1 bn) in AI skills, security, and the infrastructure of its UK data centers in 2023. Also, the company helps the UK to advance AI development. Also, the government invested £1.5 billion ($1,9 bn) in computing capacity.
Ultimately, the UK needs to make a few improvements to keep its AI growth rate. In addition, the government must find ways to help small and medium enterprises adopt AI faster. Besides, Microsoft will continue supporting the United Kingdom’s goal to become an AI superpower.
Will the UK continue being the most advanced tech sector in Europe? Let us know in the comments.
