AI might increase UK GDP by £550 billion by 2035, analysis exhibits

May 16, 2024 | blog

The UK might make greater than half a trillion kilos within the subsequent decade by embracing AI and cloud know-how, in response to a new report commissioned by Microsoft. AI represents a £550 billion alternative for the UK over the following 10 years, as revealed in a brand new report commissioned by Microsoft.

Independent consultancy Public First used complete data-modelling methods and intensive surveys of greater than 1,000 senior enterprise choice makers to create the report, Unlocking the UK’s AI Potential.

The findings predict a number of ways in which AI might increase the UK economic system, if the nation steps up its AI journey. The report additionally estimates that immediate funding in digital applied sciences and expertise might have a mean societal Return on Investment (ROI) of greater than 5:1 within the subsequent decade – that means that for each additional £1 spent by firms, the economic system might develop by £5.

With essentially the most superior tech sector in Europe – second globally solely to the US – the UK is properly arrange for AI management. In 2021, the UK Government launched the National AI Strategy, a 10-year motion plan to make the UK an ‘AI superpower’. Digital know-how is already one of many greatest drivers of UK development and the nation has attracted greater than £20 billion in personal funding in AI since 2016.

But the report means that delaying AI roll-out over the following half decade might price the UK £150 billion by 2035.

Hugh Milward, Vice President for Corporate, External and Legal Affairs at Microsoft, says: “The UK risks foregoing significant economic gain if we let progress slip over the next five years.

“Planning, power, and permitting are critical to unlocking the sector’s ability to invest quicker and make the most of the opportunity for the UK.”

To preserve momentum on AI adoption, the UK might want to take motion on key bottlenecks.

Bottleneck 1: Infrastructure

The UK’s digital know-how infrastructure is much less superior than many different international locations. As of 2022, the UK had simply 1.3% of world computing capability. Staying on the forefront of the fast-changing AI market would require substantial sources and capabilities, together with ample datacentre infrastructure and a reliable provide of highly effective GPU laptop chips.

The report finds that nearly a 3rd (31%) of SMEs (small and medium sized enterprises) are but to undertake the cloud and virtually half (47%) don’t presently use AI instruments, functions, AI robotics or equipment. To harness AI’s potential, companies might want to turn into extra conversant in digital know-how.

Bottleneck 2: Commercial consciousness

The report finds that nearly a 3rd (31%) of SMEs are but to undertake the cloud and virtually half (47%) don’t presently use AI instruments, functions, AI robotics or equipment. To harness AI’s potential, companies might want to turn into extra conversant in digital know-how.

Bottleneck 3: Skills scarcity

Two-fifths of companies wrestle to search out employees with good digital expertise, in response to the analysis, with shortages in conventional digital roles resembling knowledge analytics or IT.

In addition, the necessity for employees with new AI-specific expertise, resembling immediate engineering, is prone to rise. It shall be important to supply retraining and upskilling alternatives in AI-related fields over the following decade, the report finds.

How can we guarantee these bottlenecks are addressed to harness the total potential of AI?

Securing the UK’s AI future

Microsoft introduced a £2.5 billion ($3.2bn) funding in AI expertise, safety and datacentre infrastructure in 2023, aiming to obtain greater than 20,000 of essentially the most superior GPUs [Graphics Processing Units] by 2026. By greater than doubling its datacentre infrastructure throughout the UK, with the most important funding in its 40-year historical past within the nation, Microsoft will assist to assist UK momentum within the AI period.

The Government concurrently invested £1.5bn in computing capability and dedicated to constructing three new supercomputers by 2025.

Setting new requirements for the general public sector

While the discourse round AI typically hinges on personal enterprise, financial positive aspects and digital innovation may have real, constructive results on actual lives, the report says. This will maybe be most important within the public sector, which presently faces enormous pressures on sources.

The report reveals that strategic use of AI might save the UK’s public sector £17 billion by 2035 – sufficient to pay the salaries of greater than 330,000 nurses.  What’s extra, the projected enhancement advantages of AI on public sector occupations are solely round 15% lower than for roles within the personal sector.

AI is already serving to to assist earlier most cancers and illness detection within the NHS. Not solely might this save the NHS a further £500 million by 2030, however it could remodel outcomes for sufferers and households.

Levelling up the workforce with AI expertise

While headlines are typically dominated by fears that AI will steal or negatively alter jobs, the report argues that AI is unlikely to create unemployment within the short-to-medium time period. Instead, AI couldn’t solely assist make particular person employees extra productive, but in addition supply many individuals an upskilling or new employment alternative.

It is probably going there shall be job alternatives round new AI services, in addition to in burgeoning AI-related fields, resembling knowledge and immediate engineering. Even between 2020 and 2023, demand for AI roles grew by twice as a lot as the common labour demand.

Contrary to frequent issues that AI may have a disproportionately adverse affect on lower-income employees, the report suggests that truly AI might assist workers on the backside or center finish of the wage distribution desk to meet up with larger earners.

To assist improve the workforce, Microsoft UK has made a multi-million-pound funding to coach a million folks with the talents they should work with AI.

There are key employment areas the place the UK is particularly well-suited to utilizing AI, notably in monetary providers, skilled providers, well being, biotech and science.

Supporting AI advances in such fields couldn’t solely raise the UK economic system but in addition profit society. In one current instance, Microsoft and analysis laboratory PNNL used a mix of AI and high-powered computing to find a brand new sort of battery materials in simply weeks, quite than the expected years.

Empowering the UK to fulfil its AI potential

The affect of generative AI has been in comparison with the Industrial Revolution, however at a a lot sooner tempo and at a lot larger scale. The UK should act assertively or threat being left behind, the report concludes.

Microsoft is dedicated to serving to the nation realise its ambitions and turn into an AI superpower, probably unlocking transformative advantages for the economic system, public providers and society at massive.

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