AI adoption could see £31bn boost to UK economy

The UK economy could receive a £31bn boost from the adoption of generative AI, with some sectors seeing more of an impact than others, according to research by KPMG

Max Austin, Reporter, Accountancy Daily

According to the Big Four firm, generative AI has the potential to increase productivity by 1.2%, the equivalent of an additional output of £31bn a year in the UK economy.

The report also showed that around four in 10 jobs can expect some impact from AI technology, however, just 10% will face a ‘significant impact’ – with over 5% of their work affected.

Creative occupations are expected to be amongst the most affected, with text-based algorithms applicable to 42% of the tasks associated with authors, writers and translators.

For those in audit and accounting, only 7% of tasks were recognised as susceptible to generative AI technologies – with the drafting of technical reports playing the most significant role.

Yael Selfin, chief economist at KPMG UK, said: ‘It will take time for the new technology to be adopted across the economy. Changes to working practices, skills, and significant levels of digital investments are required to unlock productivity benefits.

‘While we do not anticipate many job losses as a result, changes to work practices of some occupations could still lead to short-term skill mismatches, as the labour market adjusts to the new technology. Additional support will be needed to facilitate the transition of affected workers to new occupations.’

Occupations expected to experience minimal impact from generative AI include those industries such as retail, customer services, hospitality, construction and manufacturing.

Of the 412 occupational categories surveyed, around 60% are expected to see almost no impact.

Paul Henninger, head of connected technology at KPMG UK, said: ‘The benefits of generative AI will be huge if we keep people at the centre of our thinking about it. Used in a responsible way, it will accelerate our work, saving people and businesses time and money by removing repetitive tasks and bringing data and insights seamlessly into how we make decisions.

‘While there are concerns about the impact of generative AI on jobs, it will likely be used as an enabler of our strategies and processes. Roles will change to work with the technology.’

The report recognises the need for a ‘high degree of caution’ from regulators and policymakers due to the potential for ‘highly uncertain’ wider social and economic implications involved with AI technology.

This includes the economic risks, particularly on inequality, with previous waves of automation and offshoring leading to increases in wage disparities, with both the US and UK economies having seen wage erosion in routine jobs affected by automation.