Gearing up to realise AI’s productivity gains
Artificial intelligence once more grabbed the headlines in November when the UK government hosted the first international AI Safety Summit. Attracting political and business leaders from across the globe, it generated warnings aplenty about threats to security, privacy, employment and even the continued existence of humanity itself, reports David Sapsted.
A
way from the conference, though, the focus on AI’s future in the UK tended to be more prosaic. True, Prime Minister Rishi Sunak announced the creation of an AI safety
institute, but he also unveiled a £100 million fund to finance research into how the technology could foster new medical treatments. In the Autumn Statement in late November, Chancellor of the Exchequer Jeremy Hunt pledged an extra £500 million in AI funding – on top of the £1.5 billion already promised – to “help make us an AI powerhouse”. He told MPs: “When it comes to tech, we know that AI will be at the heart of any future growth. I want to make sure our universities, scientists and start- ups can access the compute power they need.” For businesses large and small in all sectors, the focus
is increasingly turning to how AI might solve one of the UK’s most perplexing and most persistent problems: the so-called ‘productivity puzzle’ which, for years, has dogged the nation’s economic fortunes. Although the UK remains the world’s eighth largest
manufacturing nation, it is often quoted that a French worker can produce as much in four days as a British one can in five. Certainly, international comparisons show that per hour worked the USA and Germany produce about a sixth more than the UK. Since the onset of the pandemic, productivity in
manufacturing has essentially flatlined. Even before Covid’s unwelcome arrival, the Resolution Foundation think-tank calculates that, between the 2008-9 financial crisis and 2020, productivity across the whole economy grew by just 0.4 per cent annually – less than half the rate achieved across OECD nations.
SECTORAL RESPONSES TO THE AI REVOLUTION But manufacturers are beginning to make up for lost time. Their trade organisation, Make UK, published a survey recently showing that more than half of manufacturers are now investing in AI, machine learning and augmented reality. Almost 40% are also planning to adopt generative AI, referring to the use of artificial intelligence to create new content such as text, images, music, audio and videos. The survey further found that of the companies
that had already invested in AI, two-thirds were seeing improved productivity. Verity Davidge, Make UK’s policy director, commented: “The adoption of AI, automation and other game-changing technologies by manufacturers is rapidly accelerating and will provide vital pieces in solving the productivity puzzle.” But, she added: “There is still more to be done to
match our competitors, especially among SMEs who face far greater hurdles in adopting digital technology. As well as tackling the digital skills barrier, which remains the biggest hurdle, government should roll out the Made Smarter scheme (a programme to build a digital innovation ecosystem among small and medium-sized manufacturers) across the UK. This has proven success in delivering step-change for SMEs on their automation journey.” One government initiative in the autumn was the
launch of a £32 million scheme for the transport, construction, agriculture and creative industries to improve productivity through the use of AI. The scheme, which offered grants of between £700,000 and £1.2 million, has now closed.
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GLOBAL LEADERSHIP
AI PRODUCTIVITY
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