Closing the AI skills gap is an £80 billion opportunity
Smart use of AI could add £80bn in productivity gains to the British economy by 2035, but too few businesses have the workforce to deploy it effectively, says Steve Rigby
The daily AI discourse moves between a few regular topics: eye-watering investment in frontier models, soaring compute costs, crippling cyberattacks and the unknowable impact of superintelligence.
These are the big subjects global figures are addressing – in the past week alone, King Charles, President Donald Trump, and President Xi Jinping have weighed in on AI and the future. It is the dominant theme of party conference season and is leading news bulletins worldwide.
Amid the catastrophising, we hear far less about the opportunities AI presents for British businesses. In fact, a new report by the think tank Learning & Work Institute and the Rigby Foundation (of which I am the Chair) estimates that smart use of AI could add £80bn in productivity gains to the British economy by 2035. Needless to say, we should be paying more attention to this transformative opportunity.
However, one major obstacle stands in our way: skills. We must close the growing AI skills gap before the opportunity slips away.
Time is of the essence
We are witnessing the largest expansion of infrastructure in human history. At 3.5 per cent of global GDP, AI investment is running at levels 50 per cent above the peak of the railway-building era, 4 times higher than during the canal-building boom, and 3.5 times greater than the peak of telecommunications investment.
Yet British companies risk falling behind as the opportunities enabled by this vast investment grow. While there is a widespread willingness to engage with AI – 85 per cent of businesses are currently using the technology in some capacity – there exists a clear lack of effective deployment. Only 18 per cent of UK employers use AI extensively, and adoption varies drastically by business scale: large firms (25 per cent) are more than twice as likely to deploy AI extensively as small businesses (13 per cent).
Ultimately, this comes down to skills, and here, the need for action is urgent. The UK workforce does not yet have the ability to adopt and scale AI technologies successfully. I see this reality every day in my work with businesses across the country.
I also see a solution: rapid technological upskilling. That is how we unlock billions of unrealised capital to fuel the British economy over the next decade – and, as a happy side effect, begin to address the NEET (Not in Education, Employment, or Training) crisis facing 16-24-year-olds.
A service economy
The UK is home to a remarkable wealth of knowledge, and as a service-based economy, our knowledge-intensive sectors like professional services, finance, and creative industries have historically led the way. However, without fast workforce upskilling, these cornerstone industries risk losing their advantage to global competitors.
There are isolated examples of British companies or industries overperforming. Just look at law. The sector is well ahead of the AI adoption curve and has seen higher profitability and fewer hours spent on administrative tasks. To emulate the success of many of our City law firms, a wider issue requires urgent redress. Systemic flaws in our skills infrastructure inhibit the economy. Over the past two decades, employer funding for individual workforce training has dropped by over a third, while the bureaucracy behind updating technical education standards continues to drag on.
Organisations and their leaders are ultimately responsible for their own development, and they are better placed than the State to decide the best course of AI implementation. However, the government does have a significant role in enabling that activity by setting the right conditions for growth. A collaborative effort is crucial to effect change.
Realising this £80bn economic prize requires immediate action: businesses must modernise their internal capability, while the government must urgently reform technical education and incentivise skills investment.
How we get there
By equipping young people, employees, business leaders and the wider population with the confidence and capabilities to use AI effectively, we give everyone a genuine opportunity to share in the benefits of this technological revolution.
If we are serious about driving ‘good growth in every postcode’, we must quickly meet our productivity challenges with decisive action across businesses, government and education.
Steve Rigby is CEO of Rigby Group and Chair of the Rigby Foundation