Research from the McKinsey Global Institute shows that UK companies could lose 20% of their cash flow if they are too slow to invest in and adopt Artificial Intelligence (AI) tools.
Could Miss Out
Even though the report highlighted the UK’s higher than average AI-readiness, the country could miss out on a potential 22% boost to the economy and a 120% growth for individual businesses if organisations do not start investing now in AI tools that could help them gain considerable competitive advantages.
The research noted that the UK currently only has pockets of innovation for AI e.g. Google’s DeepMind AI division, and that in order to replicate this kind of innovation for growth, businesses need to be in a position where they can offer AI at scale, invest in the necessary talent and find ways to use the findings of the latest research to help achieve commercial success.
IT Skills Shortage
The UK already has an IT skills shortage and is experiencing a “brain drain” from UK university talent to US companies, a further brain drain pressure caused by Brexit fears, and the pull of attractive higher salaries and advanced tech sector careers in tech firms overseas.
Oxford University – Massive Donation For AI
One way of combatting an AI brain-drain and helping to grow UK AI talent, which could help UK businesses with AI, is to have an AI centre in the UK. Oxford University has just received the largest single donation to a UK university of £150m from US private equity billionaire and Republican political adviser Stephen Schwarzman for the purpose of building an institute to study the ethics of AI. Mr Schwarzman is reported as saying that artificial intelligence is the major issue of our age. He has also given £279m to the Massachusetts Institute of Technology (MIT) to establish a centre for computing and artificial intelligence.
What Does This Mean For Your Business?
Both this research, and some Nesta research from last year have highlighted how UK businesses may be facing added competitive challenges and missing out on revenue in the not-too-distant future due to an ongoing skills shortage that has been amplified and exacerbated by Brexit uncertainty, and by late investment in and adoption of AI.
McKinsey’s latest research builds on its research from last year where it attempted to simulate the effects of AI on the global economy. The results showed that AI could deliver additional global economic activity of around $13 trillion by 2030, or about 16 per cent higher cumulative GDP compared with today. This, of course, would be good for businesses that have invested in AI, and where many of the potential challenges are adequately tackled e.g. the UK’s IT skills shortage. It should also be accepted that the productivity growth that AI could help fuel is likely to be affected by a host of different factors in different parts of the world e.g. labour automation, innovation, the pace of adoption of AI, and the global connectedness or labour-market structure of any given country.
It is also worth noting that AI can deliver threats as well as opportunities, in the form of AI-based cyber-attacks which are a developing risk to whole nations and economies as well as individual businesses. This is certainly one area where nations such as the UK must invest in its own AI defence structures and tools.