AI adoption could add £31 billion to UK economy

Widespread adoption of generative AI by UK businesses could add £31 billion of GDP to the economy, according to a report from Big 4 accountancy firm, KPMG.

The Generative AI and the UK labour market report identifies a 1.2% gain in overall productivity in the UK economy, equivalent to £31 billion in terms of 2022 output. The adoption of generative AI would also affect around 40% of jobs, but only 10% would see more than 5% of their tasks affected by the technology.

Overall KPMG found the effect of AI on people’s day-to-day work would be relatively small, with around 2.5% of tasks given over to the technology, with workers able to redeployed to other activities. The most affected occupations are those where text-based AI algorithms could be deployed, such as translation and writing-focused jobs.

The firm’s report warned, however, that there is a great deal of uncertainty over what impacts generative AI could have on the economy and in wider society, and urged a caution be deployed by policymakers and regulators in future decision-making around the technology.

Yael Selfin, Chief Economist at KPMG UK, commented on the report:

“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 the 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.”

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.”