UK faces AI skills gap, Microsoft report reveals

The UK is facing an AI skills gap that could leave companies struggling to compete with rivals from across the world, a new Microsoft report has revealed.

The research, entitled AI Skills in the UK, also found that businesses in this country use less AI than firms overseas, and when they do it tends to be less advanced.

UK organisations are also less likely to be classed as “AI pros” compared to the global average (15% versus 23%), and the UK has a higher failure rate of AI than the global average (measured by the number of projects generating no commercial value – 29% versus 19%).

The findings raise concerns that as the world starts its recovery from the Coronavirus pandemic, companies in the UK will fall behind rivals from Europe, the Americas and Australia because of a lack of AI skills. Analysis from IDC revealed that AI and cloud technology will play a significant role in helping businesses and societies deal with the disruption created by COVID-19, while separate research by Imperial College London highlighted that businesses must ensure they can respond to change and adapt.

Previous findings from Microsoft UK showed that organisations embracing AI outperform the competition by 11.5%.

Bar chart showing how much of the UK workforce is currently AI-augmented or works with AI day-to-day

Simon Lambert, Chief Learning Officer for Microsoft UK, said: “The most successful organisations will be the ones that transform both technically and culturally, equipping their people with the skills and knowledge to become the best competitive asset they have. Human ingenuity is what will make the difference – AI technology alone will not be enough. At Microsoft, we’re on this journey just like everyone else, not least because the best learners make the best teachers. The larger point though, is not to be intimidated by the technology. Instead, get excited, develop your curiosity and let’s keep learning from one another.”

AI Skills in the UK looked at the UK-specific data from a global AI skills study led by Microsoft EMEA. That survey included the views of more than 12,000 people in 20 countries, including Germany, Italy, Spain, Australia, Brazil, South Africa, the United States and Canada. It focused on AI capabilities and adoption levels around the world to understand the progress organisations are making, and the challenges they are facing in preparing their workforce for an AI-driven world.

Thirty-five percent of UK business leaders believe there will be an AI skills gap in the next two years, while 28% believe we’re already experiencing one (above the global average of 24%).

The research also uncovered a concerning lack of AI re-skilling of the UK workforce to address this skills gap. Only 17% of UK employees say they have been part of re-skilling efforts (far less than the global figure of 38%). Additionally, only 32% of UK employees feel their workplace is doing enough to prepare them for an AI-enabled future (well below the global average of 42%), compared to 68% who do not (compared to 58% globally).

Just over half (52%) of UK employees are using AI to work faster and smarter, compared to 69% of employees globally.

A finger touches a touchscreen monitor, which lights up

Just over half (52%) of UK employees are using AI to work faster and smarter

Companies in the UK are more likely to be using AI to drive operational efficiency and free up people from basic tasks but less likely to be deriving new product innovations or happier customers from AI projects. Unfortunately, this puts the UK at a disadvantage, as businesses globally are shifting from focusing AI on driving short-term efficiencies to pursuing higher added-value benefits.

Sixty-one percent of UK managers say they’re focusing on the AI they implement, compared to 39% who say they’re focused on their people and how they work with AI.

Globally, this trend is reversed – 44% prioritise the technology, compared to 56% who focus on the people.

However, one encouraging result is that UK organisations are on par with their global peers when it comes to reported successful AI projects (68% versus 69%).

UK companies understand they need to use AI in order to remain competitive but many are not spending enough time or money to ensure their staff can use and build AI-based solutions effectively. A lack of budget (34%) was cited as the top barrier to AI reskilling in the UK, followed by unclear return on investment (28%).

Quote from Simon Lambert at Microsoft

Chris Withers, Head of AI and Advanced Analytics for UK Financial Services at EY, said: “Many companies struggle to move AI projects from proof of concept to production. To succeed, firms must put sufficient resource and expertise into educating employees, and help them to embrace new innovations, thereby creating champions for AI-enabled change.”

The use of AI is critical for businesses as they attempt to weather the economic storm created by COVID-19. The EY Item Club has predicted that the UK economy may not return to its pre-lockdown size until 2024, with the economy shrinking 11.5% this year.

Lord Clement Jones, former Chairman of the House of Lords Select Committee on Artificial Intelligence, added: “The recent pandemic is significantly accelerating the demand for digital skills. Meeting this demand cannot just be a top-down process pushed by business leaders, it requires an enormous bottom-up effort from individuals at all levels who are self-motivated to improve their digital and AI-augmented skills.

“As leaders rethink their business operations, there will be much more focus on staff learning and adaption, to take an ongoing agile approach to this new world of work.”

To learn more about how to implement AI technology and drive lasting business impact, read Microsoft’s AI skills in the UK report here and visit Microsoft’s online AI Business School, which offers six industry-specific learning paths to help you unlock the potential of AI.