Take a moment and read that again. With the influx of information available there’s a requirement to harvest, train and apply data to unlock opportunities and solve society’s important problems. Technology is advancing and disrupting; the possibilities of AI are set to boost all sectors, industries, national and global economies [Rao et al. 2018]. But it can also pose challenges to existing patterns of work and the skills required to fulfil those demands. The ‘Future of Work’ is becoming the ‘Not So Distant Future’ and the skills requirements of the ‘Now’.
In order to grow, decision makers need to have a strategic AI approach and a framework to enable forward thinking, and proactively adopt innovative AI technologies, calculate the Return on Investment (ROI) and identify early and mitigate associated development risks. Insights from the most recent PwC Global Annual CEO survey confirm that executives are aware of these opportunities: 85% of CEOs ‘agree’ that AI will significantly change the way they do business in the next five years.
But with the increase of AI adoption and maturity in understanding the benefits and risks of AI, the global economic and competitive landscape will be transformed. With that, the workforce skills required will change radically.
Our analysis suggests that the net impact that AI will have on the total UK employment may be broadly neutral in the long run, with job displacement broadly balanced by new job creation over the next two decades. But, as with past industrial revolutions, the transition could be disruptive for many workers and businesses. And the outcome is not predetermined: it will depend on how individuals, businesses and the government engage with these new technologies.
Government, in particular, can play an important role in steering the economy towards a more optimistic scenario by mitigating the costs of job displacement while maximising the positive effects on growth and new job creation. Last year, for example, the UK government announced its AI Sector Deal, aimed at realising all the social and economic benefits that AI can bring. The recognition of this means a path has been carved towards growing the UK economy of tomorrow.
As part of the set of actions to deliver the AI Sector Deal, the government announced earlier this year a new joint government-industry package to drive upskilling in the AI sector: a new industry-funded AI Masters, and 16 dedicated centres at universities across the UK with the mission to train the next generation of AI experts. The programme is designed for different stages of higher education and available at a variety of levels. It could be a major contributor to building advanced AI skills and training employees to make the most of an acceleration of AI adoption across the UK. As part of the new programme, PwC has partnered with The University of Bath's new Centre for Doctoral Training in Accountable, Responsible and Transparent AI, in a joint effort to train the next generation of Responsible AI experts and add value back to the UK economy.
A wider approach to the AI economic impact should also consider policies addressing economic security, new job creation and healthy competition. For example:
Governments should strengthen the safety net for those who find it hard to adjust to technological changes. Our analysis suggests that AI could favour those who already have strong digital skills (and higher education levels more generally) and so tend to further increase income and wealth inequality. If this is the case, then governments need to consider how to redistribute some of the significant GDP gains from AI more widely across society.
A place-based industrial strategy should target job creation. Central and local government bodies need to support sectors that can generate new jobs, for example through place-based strategies focused on university research centres, incubators, science and technology parks and other enablers of business growth.
Promoting effective competition: Productivity gains from AI should be passed through in large part to consumers through lower (quality-adjusted) prices. This requires competitive pressure to be maintained both in the technology sector producing the AI, and in the sectors using it. An effective competition policy will be important as it balances the need for a reasonable return to innovation while providing long term benefits to consumers.
Business leaders also continue to ponder the effect AI has on jobs: our latest global CEO survey finds that 49% of CEOs believe that AI will displace more jobs than it creates in the long run, while 41% disagree. However, executives in our AI Predictions global survey agree AI isn’t taking away jobs in their organisations just yet. In fact, in the USA those that said AI will generate an increased headcount (38%) were twice as numerous as those who said AI will lead to job cuts (19%) for their companies. This highlights the need for a new workforce strategy.
A successful strategy for AI adoption in an enterprise should also include a systematic and pragmatic approach in identifying new job skills and roles and how to fill them. There should be an organisation-wide upskilling programme for technical skills and new digital ways of working, coupled with revised performance and compensation frameworks. And while many employees will undoubtedly upskill, some won’t be able to make the transition.
And while some organisations have made upskilling a top priority of their workforce strategy as we predicted last year, recruiting for new AI talent has become a crucial part of it as well. With the demand for highly trained programmers and data scientists surging, companies should set up partnerships with universities and consider new forms of apprenticeships. One example of such an initiative is the new data science Graduate Apprenticeship with Edinburgh and St Andrews Universities, which is a partnership between PwC and Skills Development Scotland to train new technologists for the changing workforce.
In the context of high competition for AI skills, workplace culture has become a critical factor for attracting and retaining top talent - in some cases, even more so than compensation. AI specialists value and choose workplaces with the culture and individual empowerment that will enable them to do meaningful and purposeful work in collaboration with other talented people. Organisations that develop and use AI for the good of society and the planet list high among preferences for the perfect workplace.
John Hawksworth, Chief Economist
Where can AI unlock the greatest return on investment for you?