The state of AI in the UK: What we can expect from 2023 and beyond

As we begin 2023, it is worth reflecting on the progress of AI adoption and what we can anticipate for the year ahead. It is commonly stated that the UK is a global leader in AI, with a cutting-edge research and innovation sector. Nevertheless, AI remains to be at an early stage of development, although some markets, sectors and individual businesses are more advanced than others

Most sectors, including manufacturing, are yet to take full advantage of AI. A recent survey of UK businesses by Capital Economics found that AI adoption by manufacturing companies was only about 17%, and it was even lower in retail and hospitality at 12%. This compares to almost 30% in finance and legal sectors. However, the pace at which AI is evolving is exponential. As we look to the future, it is expected that global GDP will be up to 14% higher in 2030 as a result of the accelerating development and adoption of AI.

What is the UK doing to ensure that AI growth is supported?

Despite the current economic climate, AI is still a priority on the government’s agenda to drive innovation, notably in the Chancellor’s Autumn Statement 2022 and the Prime Minister has expressed a need for an “innovative economy” in his New Year speech. Furthermore, in September 2021, the government published its landmark National AI Strategy, setting out a 10-year plan to make the UK a ‘global AI superpower’ by focusing on three key pillars:

  1. Investing and planning for the long-term needs of the AI ecosystem to sustain the UK’s position as a global AI leader
  2. Supporting the diffusion of AI across the whole economy to ensure all regions, nations, businesses and sectors can benefit from AI
  3. Developing a pro-innovation regulatory and governance framework that protects the public

Nine months after the publication of the initial Strategy, the AI Action Plan was released in July 2022, outlining the activities being taken by each government department to advance the National AI Strategy and further the UK’s position as an AI pioneer.

Overall, many actions outlined in the Strategy have been shown to progress in the Action Plan, however, we encourage the government to continue fulfilling the commitments made, particularly in terms of increasing collaborative efforts across government departments; increasing skills and capabilities; and developing an effective approach to AI regulation that is conducive to innovation.

  1. Increasing collaborative cross-government AI initiatives

2022 saw the development of a number of different initiatives across government departments from funding to research. Some departments have also developed their own AI strategies, for example, the Department for Health and Social Care, Ministry of Defence and HMRC.

The National AI Strategy has a long-term aim to join up work across government to identify where using AI can provide a catalytic contribution to strategic challenges. This can be seen in one of the priorities to develop an ‘all-of-government approach to international AI activity’ and the AI Action Plan revealed that this would be included in an upcoming International Technology Strategy.

Yet, the majority of initiatives mentioned in the AI Action Plan appear to be developed in isolation of other government departments. AI has a ubiquitous presence across multiple sectors and policy domains; more cross-government work could realise greater benefits through synergies between departments.

However, the recent development of the Algorithmic Transparency Recording Standard Hub is a great example of an all-of-government approach. The Hub is a cross-government initiative that will promote transparency in the public sector’s use of algorithms and relates to commitments made in both the National AI Strategy and National Data Strategy.

  1. Developing skills and capabilities in the AI sector

techUK members have frequently mentioned specialist skills as a significant hindrance to AI adoption. Our recent Digital Economy Monitor survey also showed that the labour market is very tight in the UK. Unfortunately, the lack of AI data scientists is a global issue and this shortage shows no sign of easing as we begin 2023.

Nonetheless, the government has made a concerted effort to bolster AI skills, for example through postgraduate conversion courses, Turing AI Fellowships through the Alan Turing Institute, and the Department for Education’s Skills Bootcamps. Moving forward, it would also be helpful for the government to provide an update on the performance and outcomes of these initiatives. The original Strategy also mentions the publishing of research into AI skills needs, as well as supporting the National Centre for Computing Education in providing accessible AI programmes, although the progress of these initiatives were not mentioned in the AI Action Plan.

Furthermore, greater collaboration between industry and government would be a welcome step in accelerating AI upskilling and reducing the skills gap. For example, the government is making an effort to engage industry to provide funding for postgraduate conversion courses, particularly for those from underrepresented groups. However, this is yet to gain significant traction. techUK will soon be hosting an AI Skills Ministerial Roundtable with Paul Scully, the Parliamentary Under Secretary of State for Tech and the Digital Economy at the Department for Digital, Culture, Media and Sport. This roundtable will aid the discussion in understanding where government and industry collaboration can add value in closing the AI skills gap.

  1. Ensuring that the AI regulatory ecosystem is conducive to innovation

Finally, another important challenge that the UK must contend with to improve AI adoption is regulatory uncertainty. Last year, a lot of improvements were made in developing governance around the use of AI. The launching of the new AI Standards Hub, as well as the further work on the AI Assurance roadmap and Algorithmic Transparency Recording Standard are key examples of this. techUK have worked with the Centre for Data Ethics and Innovation (CDEI) to host an AI assurance symposium which fed into a recent report on ‘Barriers and Enablers to AI Assurance’. We are also working with the CDEI to provide industry use cases on how assurance techniques are being utilised across different sectors. This will feed into an online case study repository as part of the wider vision of the roadmap.

The government is proposing to take an iterative and flexible approach to AI regulation. We are currently awaiting the Office for Artificial Intelligence’s white paper which was originally due to be published last year. This will set out the UK’s current position on the possible risks and harms of AI and offer relevant regulatory solutions. Ahead of the white paper, the government released an interim policy paper to set out their emerging pro-innovation and risk-based approach to regulation. In line with our position paper on ‘Governance for an AI future’, techUK welcomes this proposition and encourages a tiered approach to risk which considers the entire AI lifecycle and existing regulation.

So, as we enter 2023, we look forward to working closely with government to help deliver a pro-innovation, proportionate approach to regulating AI and find solutions to other common barriers to AI adoption, such as digital skills.

For the latest updates on UK AI policy make sure to sign up to our Data Analytics and AI Group by emailing Farzana ([email protected]).  


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