Britain could earn more than half a trillion pounds over the next decade by embracing AI and cloud technology, according to a new report commissioned by Microsoft. AI represents a £550 billion opportunity for Britain over the next decade, according to a new report commissioned by Microsoft.
Independent consultancy firm Public first used extensive data modeling techniques and extensive surveys of more than 1,000 senior business decision makers to create the report, Unlocking the UK's AI potential.
The findings predict several ways in which AI could boost the UK economy as the country ramps up its AI journey. The report also estimates that rapid investment in digital technologies and skills could deliver an average social return on investment (ROI) of more than 5:1 over the next decade. £5.
With the most advanced technology sector in Europe – second globally after the US – Britain is well prepared for AI leadership. In 2021, the UK government launched the National AI Strategy, a ten-year action plan to make Britain an 'AI superpower'. Digital technology is already one of the biggest drivers of UK growth and the country has attracted more than £20 billion of private investment in AI since 2016.
But the report suggests that delaying the rollout of AI over the next five years could cost the UK £150 billion by 2035.
Hugh Milward, vice president of corporate, external and legal affairs at Microsoft, said: “The UK risks missing out on significant economic gains if we miss progress over the next five years.
“Planning, power and licensing are vital to unlocking the sector's ability to invest faster and maximize the opportunity for Britain.”
To maintain the momentum for AI adoption, Britain will need to take action on key bottlenecks.
Bottleneck 1: Infrastructure
The UK's digital technology infrastructure is less advanced than that of many other countries. In 2022, Britain had just 1.3% of the world's computing capacity. Staying at the forefront of the rapidly changing AI market requires significant resources and capabilities, including adequate data center infrastructure and a reliable supply of high-performance GPU computing chips.
The report shows that almost a third (31%) of SMEs (small and medium enterprises) have yet to embrace the cloud and almost half (47%) currently do not have any AI tools, applications, AI robotics or machines used. To realize the potential of AI, companies will need to become more comfortable with digital technology.
Bottleneck 2: Commercial awareness
The report shows that almost a third (31%) of SMEs have yet to embrace the cloud and almost half (47%) are not currently using AI tools, applications, AI robotics or machines. To realize the potential of AI, companies will need to become more comfortable with digital technology.
Bottleneck 3: skills shortage
According to the research, two-fifths of companies are struggling to find staff with good digital skills, with shortages in traditional digital functions such as data analytics or IT.
Additionally, the need for workers with new AI-specific skills, such as rapid engineering, is likely to increase. The report finds that providing reskilling and upskilling opportunities in AI-related areas will be essential over the next decade.
How can we ensure that these bottlenecks are addressed to realize AI's full potential?
Securing the UK's AI future
Microsoft announced a £2.5 billion ($3.2 billion) investment in AI skills, security and data center infrastructure in 2023, with the aim of purchasing more than 20,000 of the most advanced GPUs [Graphics Processing Units] by 2026. By more than doubling the UK's data center infrastructure, with the largest investment in the country in its 40-year history, Microsoft will help support the UK's momentum in the AI era.
The government simultaneously invested £1.5 billion in computing capacity and pledged to build three new supercomputers by 2025.
Setting new standards for the public sector
While the discourse around AI often depends on private industry, economic profits and digital innovation will have real, positive impacts on real life, the report said. This will perhaps be most significant in the public sector, which is currently facing enormous pressure on resources.
The report shows that strategic use of AI could save the UK public sector £17 billion by 2035 – enough to pay the salaries of more than 330,000 nurses. Furthermore, the expected benefits of AI for public sector occupations are only about 15% less than for private sector roles.
AI is already helping to support earlier detection of cancer and disease in the NHS. Not only could this save the NHS a further £500 million by 2030, but it would also change outcomes for patients and families.
Taking the workforce to the next level with AI skills
While headlines are sometimes dominated by fears that AI will steal or negatively change jobs, the report states that AI is unlikely to lead to unemployment in the short to medium term. Instead, AI could not only make individual workers more productive, but also offer many people an opportunity for upskilling or new employment.
It is likely that employment will emerge around new AI products and services, as well as in fast-growing AI-related areas such as data and rapid engineering. Even between 2020 and 2023, the demand for AI roles grew twice as much as the average demand for labor.
Contrary to widespread concerns that AI will have a disproportionately negative impact on lower-income workers, the report suggests that AI could help workers at the bottom or middle of the wage distribution table catch up with higher earners.
To help improve its workforce, Microsoft UK has made a multi-million pound investment to train a million people with the skills they need to work with AI.
There are key employment areas where Britain is particularly suited to the use of AI, particularly in financial services, professional services, healthcare, biotechnology and science.
Supporting AI progress in such areas could not only boost the UK economy but also benefit society. In a recent example, Microsoft and research lab PNNL used a combination of AI and powerful computers to discover a new type of battery material in just weeks, instead of the years predicted.
Enabling the UK to realize its AI potential
The impact of generative AI has been compared to the industrial revolution, but at a much faster pace and on a much larger scale. The UK must act assertively or risk being left behind, the report concludes.
Microsoft aims to help the country realize its ambitions and become an AI superpower, unlocking potentially transformative benefits for the economy, public services and society as a whole.
