微软：解锁英国的AI潜力 Unlocking the UKs AI Potential Harnessing AI for Economic Growth

UnlockingtheUK’sAIPotential:

HarnessingAIforEconomicGrowth

UnlockingtheUK’sAIPotential:

HarnessingAIforEconomicGrowth

PublicFirstisanindependentconsultancythatworkstohelpcompaniesandorganizationsdevelopnewpolicyproposals,betterunderstandpublicopinion,and

modeltheireconomicandsocialimpact.PublicFirstisamemberoftheMarketResearchSociety.

T:+44(0)2036872761

E:info@publicfirst.co.uk

www.publicfirst.co.uk

Contents

5

ExecutiveSummary

9

Introduction

13

TheUK’sDigitalAdvantage

17

Infrastructure&Compute

21

DigitalSkills

25

TheReturnsfromDigitalInvestment

27

ReducingBarrierstoDigitalAdoption

31

UnlockingValueinthePublicSector

33

Methodology

ExecutiveSummary

5

CANADA

GERMANY

U.K.

S.KOREA

£550Bn

Overthenextdecade,digitaltechnologiessuchasAI

andcloudhavethepotentialtocreateahalfatrillion

opportunityfortheUKeconomy,increasingGDPbyover

£550billionby2035.AIcouldhelpmakeindividualworkersmoreproductive,levelupskillsacrosstheworkforce,reducewaste,speedupscientificinnovationandenableentirely

newtypesofproductsandservices.

TheUKhasthemostadvancedtechsectorinEuropeandissecondbehindonlytheUSinitsabilitytotakeadvantageofAI-however,thisleadisrelativelyslightoverotherleadingeconomiessuchasGermany,CanadaorSouthKorea.

U.S.A.

6

7

TheUKcouldbeheldbackfromachievingitsfull

potentialbythreecorebottlenecks:

Manycompanies

arestillunaware

ofthepotential

benefitstotheir

businessfrom

greateruseof

moredigital

technology.

Inourbusiness

TheUKdoesless

wellatproviding

thebasic

infrastructure

neededtoenable

thebuildof

datacentres.

Thisisonly

likelytobecomemoreimportant

asdemand

foradditional

computeanddata

fromlargerAI

modelscontinues

togrow.

Ashortageof

digitalskills

continuestobe

abottleneck

forcompanies

lookingtoadopt

andapplyAIand

otherdigitaltools

intotheirown

workflows.

polling,wesaw

thataroundhalf

ofbusinesses

wereunawareof

compellinguse

cases.

Innewbusiness

polling,wefound

thatdigitalskills

wereseenas

thetypeofskills

businessesthought

wouldbehelpful

tohavemoreof,

withthisbeing

particularlytruefor

largerenterprises.

8

Thenextfiveyearscouldbeparticularlycrucialonesfor

puttinginplacetherightenablerstoensuretheUKcantakefulladvantageofAI.Addinganadditional5yearstothetimeittakesforAItofullyrolloutwouldreducethesizeofthe

economicimpactin2035byover£150billion.

Investingmoreininfrastructure,cloud,AIanddigital

skillscouldhelpovercometheseobstacles.Intotal,

weestimatethatinvestmentindigitaltechnologies

andskillscouldhaveanaveragesocietalReturnon

Investment(ROI)ofover5:1inthenextdecade.

Microsoft,whocommissionedthisreport,hascommittedto

investing£2.5billionoverthenextthreeyearsintheUK,morethandoublingitsdatacentrefootprintandtrainingmorethanonemillionpeoplefortheAIeconomy.

Alongsideitsimpactintheprivateeconomy,digital technologycouldplayanequallypowerfulroleinthepublicsector.Inourmodelling,wefoundthattheaverageaugmentationpotentialforpublicsectoroccupationswasonly15%lessthanthatintheprivatesector.

Introduction

9

10

ThepromiseoftechnologieslikeAIarecomingintosharperfocusforbusinesses,citizens,and

publicservices.TheUKGovernment’sNationalAIstrategy

setsouta10-yearplan

toensureall

partsofthecountrycanreapthebenefitsofthistechnologicalopportunity.

Inthisshortreport,MicrosoftcommissionedindependentconsultancyPublicFirsttoexplore:

TheopportunitiescreatedbydigitaltechnologyfortheUK

Thesupportinginvestmentsthatwillbeneededininfrastructure,skillsandbusinesssupport

Thecurrentbarrierstoadoption,leadingtounequaltakeup

Aspartofourresearch,werananewextensivesurveyofover1,000seniorbusinessdecisionmakersintheUK,andcreatednewmodellingofthepotentialreturnsfromAI,cloud,datacentresanddigitalskills.

DigitaltechnologyisalreadyoneofthemostimportantdriversofgrowthintheUK.Inourpolling,amajorityofbusinessestoldusthattheywereusingdigitaltechnologyinmostoftheircoreprocesses,fromcommunicatingwithcustomerstomonitoringkeybusinessmetrics.Intotal,weestimatethatintheeraofthePC,digitaltechnologyhascreatedover£400billionfortheUKeconomy.1

Mybusinessusesdigitaltechnologyforthis

1PublicFirstmodellingbasedontheConferenceBoard’sTotalEconomyDatabase,lookingattheaggregatedimpactofICTcapitalsince1990.

11

Lookingforward,AIandthecloudcouldhaveanevenlargerimpactongrowth.Inourpolling,59%ofseniordecisionmakersexpecteddigitaltechnologytohaveagreaterimpactontheirbusinessinthenextfiveyearsthanithadinthelastfive-comparedtojust2%whothoughtitwouldbelower.

Intotal,weestimatethatcloudandAIcouldcreateahalfatrillion-poundopportunityfortheUK,increasingGDPbyover£550billionby2035.That’stheequivalentofraisingannualgrowthratesby2%ayear.

However,asthisreportreveals,theUKrisksforegoingthisopportunity.ThenextfiveyearsarelikelytobethemostimportantforputtinginplacetherightenablerstoensuretheUKcantakefulladvantageofAI.Already,theUKsuffersfromrelativelylowlevelsofcomputecapacity,significantdelaysinbuildingnewinfrastructure,alongtailofSMBswhohavenotyetfullyadoptedkeybackgroundtechnologiessuchascloudandgrowingdemandforbothbasicandadvanceddigitalskills.

Intherestofthisreport,welookathowtheUKcanensureitdoesn’tmissoutonthisgrowthopportunityandexploressomeoftheinvestmentthatwillbeneededtobringitabout.

12

HowAIwillsupporttheeconomy

Aspartoftheresearchforthisreport,weproducednewmodellingofthepotentialfromAI,usingGPT-4toclassifytowhatextentAIcansupportworkersindifferenttasksacrosstheeconomy.

WhilesignificantuncertaintyremainsoverthepaceofpotentialfutureAIadoption-andtowhatextentthetechnologywillcontinuetodevelop-wethinkaplausiblecentralestimateisthatwiththerightenablersinplace,AIhasthepotentialtoincreasethesizeoftheUK’sGDPby£550billionby2035.

AIwillimpacttheeconomyinmultipleways,including:

Savingtimeforindividualworkers.

Formanytasks,AIwillhelpworkersgetmoredonemorequickly,withearlystudiesshowingitcanoftenproduceproductivityimprovementsofaround20-30%.

Levellinguptheskillsofindividualworkers.

AItoolsseemtobeparticularlyimpactfulforworkersatthebottomormiddleofthewagedistribution:helpingthemcatchuptheirskillsandexpertisewiththe

leadersintheirfield.

Reducingwasteandincreasingefficiency.

AIcanhelporganisationsinboththeprivateandpublicsectortriagetheir

resources:identifyingemergingproblemsearlier,andusingbotheconomicandenvironmentalresourcesmoreefficiently.

Enablingentirelynewtypesofproductsandservices.

JustasthePCenabledthespreadsheetandtheInternetthesearchengine,theriseofAIislikelytocreateentirelynewtypesoftoolsandentertainmentthatwould

nothavebeenpossiblebefore.

Speedingupthedevelopmentofnewscienceandtechnology.

AIbasedsimulationsarealreadyspeedingupthetimeittakestodevelopor

understandnewbiologicalandchemicalmaterials.Forexample,recentworkbyMicrosoftandscientistsatPNNLusedacombinationofAIandhigh-poweredcomputingtohelpdiscoveranewtypeofbatterymaterialinjustweeks,ratherthanyears.

WhilemanypeoplehaveexpressedconcernaboutthepotentialimpactofAIonunemployment,ourmodellingfindsthatthisisoverstated.Thevastmajorityofoccupationsaremadeupofacombinationoftasks:somewhichAIcanhelpwith,andotherswhereitcan’t.Inourmodelling,lessthan4%oftheoccupationswelookedatsawamajorityoftheirtasksabletobeautomated.

ThepotentialgainsfromAIwillnothappenautomatically,however-andasloweradoptioncurvewouldsignificantlyreducethepotential.Addinganadditional5yearstothetimeittakesforAItofullyrolloutwouldreducethesizeoftheeconomicimpactbyover£150billion.

TheUK’sDigital

Advantage

13

14

TheUKhasthemostadvancedtechsectorinEurope,withthehighestlevelofprivateinvestment,themostmatureconsumerdigitalmarketandgloballyleadingcompaniessuchasWise,SageandBuilder.AI.Since2016,theUKhasalreadyattractedover£20billionofprivateinvestmentinAI,including£2.5billionofinvestmentannouncedbyMicrosoftinNovember2023.2Intotal,theUK’sdigitaleconomyandonlineretailsectordirectlycontributes£227bninGVAandsupportsover2.6millionjobsintheUK.3

Beyonditstechsector,theUKhasotherstructuraladvantagesinresearch,cultureandskillsthatmakeitwellplacedtotakeadvantageofAIanddata.Inourbusinesspoll,seniordecisionmakersfromcompaniesthatoperatedinternationallypointedtotheUK’sscientificresearch,regulationsystemandentrepreneurialcultureasparticularadvantages.

Comparedtootheradvancedeconomies(egtheUS,Canada,EU,Japan),howwould

yousaythattheUKcompares?(internationallyoperatingcompaniesonly)

2

.uk/media/641d71e732a8e0000cfa9389/artifical_intelligence_sector_study.pdf

3PublicFirstmodellingfortheCCIA,

/research/reports/uk-digital-economy/

15

Moresystematically,wecompiledanewindexlookingattheUK’srelativestrengthsandweaknessesinunderlyingeconomiccompetitiveness;research;skillsbase;infrastructure;commercialecosystemandregulation.4WefindtheUKissecondbehindonlytheUSinitsabilitytotakeadvantageofAI-however,thisleadisrelativelyslightoverotherleadingeconomiessuchasGermany,CanadaorSouthKorea.

PublicFirstAIIndex

WithcountriessuchasFrance,IsraelandGermanyamongstothersallmakingsignificantinvestmentsinAI,theUKwillneedtokeepitsfootonthepedaltonotfallbehind.

4PublicFirstAIindexdrawingondatafromtheWorldBank’sGlobalCompetitiveness;HeritageFoundation’sIndexofEconomicFreedom;TonyBlairInstitute;Statista;Stanford’sAIIndexReport;Tortoise’sGlobalAIIndex

‘TheUKhasthemostadvancedtechsector inEurope,withthehighestlevelofprivateinvestment,themostmatureconsumerdigitalmarketandgloballyleadingcompanies’

16

Infrastructure&

Compute

17

18

Overthepast13years,theamountofcomputingpowerusedtotrainAImodelshasincreasedbyafactorof350million.5Moore’slawhasbeenbeaten–withtheamountofcomputingpowerdevotedtoAIdoublingsomewherebetweenevery3-6months.ThemorewescaleupourAImodels,themorepowerfultheybecome-andthistrendisexpectedtocontinuetodriveincreaseddemandforcomputepowerforatleastthenextdecade.

HavingaccesstoamplecomputewithintheUKcanbecrucialtoenablinglowlatencyapplications,scientificresearch,maintainingconfidenceindatasecurityandallowingnewstart-upstoexperiment.Inourbusinesspoll,overtwo-thirds(68%)ofseniorbusinessdecisionmakers-andfour-fifths(79%)ofcloudinfrastructureusers-toldusthattheythoughtitwasimportanttohavetheoptiontochoosedatacentreslocatedwithintheUK.Themostimportantreasonstheygaveforthiswerelegalorcompliance(81%),trustingtheUK’sdataprivacylaws(80%)andensuringlowlatencyorfastaccesstotheirdata(78%).

However,in2022theUKhadonly1.3%ofglobalcomputecapacity,6andonoursub-indexforinfrastructuretheUKcameonly11th.LondonandtheSoutheastcontinuetodominatethemarketwithapproximately70%ofdatacentresclusteredintheregion.

5

ernance.ai/post/computing-power-and-the-governance-of-ai

6

.uk/government/publications/future-of-compute-review/the-future-of-compute-report-of-the-

review-of-independent-panel-of-experts

19

TheGo-Science

report

andsubsequent

independentreview

oftheFutureofComputeoutlinessevenchallengesthathaveheldbackinvestmentincompute,includingalackofnationalcoordination,skillsandconcernsoverenergyusage.Inadditiontothis,manyothercommentatorshavepointedtotheUK’splanningsystemasakeybarriertodeliveringfasterinvestment.WhileprivatecompaniessuchasMicrosoftcontinuetoinvestheavilyandtheGovernmenthascommittedtothreenewsupercomputersby2025,stillmorewillbeneededtomeetdemandforusecasessuchasAI,edgecomputingandotherlowlatencyapplications.

IftheUKwantstomeetacceleratingdemandforcompute,itwillneedtodomoretounblockcurrentplanningbarriersanddelays,speedupenergyconnectiontimesandincreasezero

carbonenergysupplytomeetelectricitydemandfromnewdatacentres.

InfrastructureIndex

Microsoft’sInvestmentin

DatacentreInfrastructure

InNovember2023Microsoftcommittedtoinvesting£2.5billionoverthreeyears,toexpanditsnextgenerationAIinfrastructureintheUK,bringingmorethan26,000GPUstotheUKby2026.Thesinglelargestinvestmentinits40-yearhistoryinthecountry,MicrosoftwillgrowitsdatacentrefootprintacrosssitesinLondonandWalesandpotentiallyexpandintonorthernEngland.

Thisinfrastructureinvestmentwillhelptomeettheexplodingdemandforefficient,scalableandsustainableAI,cutting-edgecomputepower,andtheneedsoftheprivateandpublicsectorwaitingtotakeadvantageofthelatestcloudandAIbreakthroughs.

20

DigitalSkills

21

22

Inourpolling,digitalskillswereseenasthetypeofskillsbusinessesthoughtwouldbehelpfultohavemoreof,withthisparticularlytrueforlargerenterprises.

Which,ifany,ofthefollowinggeneraltypesofskillswouldyousaythatyour

businesswouldfindmosthelpfultohavemorestaffwith?

AIskillswereseenasimportantbyaround40%oflargerenterprises,butthemostpressingcurrentskillsshortageswereseentobeinmoretraditionalareassuchasdataanalyticsorIT.Inthenextfewyears,demandforAIspecificskillsislikelytogrowsignificantlyfasterasAIworkflowsmoveincreasinglyfromaprototypetodeploymentstage.Between2020and2023,demandforAIroleshasgrownbytwiceasmuchasaveragelabourdemand.7

7

/sol3/Delivery.cfm/SSRN_ID4739071_code4196853.pdf?abstractid=4603764

&mirid=1&type=2

Morespecifically,whichofthefollowingtypesofdigitalskillswouldyoumostwant

tohavemoreofinyourbusiness?

Microsoft’sAISkillsCommitment

By2025MicrosoftwillsupportonemillionpeopletogaintheAIskillstheyneedtostart,ormoveinto,acareerintechnology.

The

expansionoftheGetOnprogramme

buildsonMicrosoft’sfive-yearinitiative.Todateithastrained1.1millionpeopleindigitalskillsandhelpedover30,000peoplebuildcareersintech.Microsoft’sexpandedAIresourceswillfocusonthreekeyareas:

•BuildingAIfluency:Enableworkers,jobseekersandAI-curiousself-learnerstobuildAIknowledgeandunderstandingincludingresponsibledeployment.Newnon-profitpartnershipswithGeneration,Catch22andThePrince’sTrustwillsupportindividualswhofacegreaterbarrierstoemploymentopportunity.

•DevelopingAItechnicalskills:EnablethosewithAIknowledgetodeveloptheirtechnicalskillsandachievecertificationthroughfree,onlineself-learntrainingonmodulesincludingmachinelearninganddataanalysis.

•SupportingAIbusinesstransformation:SupportbusinessleaderstomanageAItransformationandworkerupskillingacrossnewAIproductsandservicesinordertotakeadvantageofgrowthopportunities.

23

Overtwo-thirds(69%)ofseniordecisionmakerstoldusthatdigitalskillswereeitheressentialorveryimportanttotherunningoftheirbusiness-but40%ofbusinessesreportedfindingitdifficulttofindstaffwithgooddigitalskills,leadingtoslowerdeploymentofnewtechnology.

MicrosoftandCatch22:DigitalEdge

DigitalEdgeisatechemployabilityprogramme,deliveredbyCatch22inpartnershipwithMicrosoft,whichsupportsindividualsaged18+intotheirfirstdigitaljob.Pairedwithanindustryexpertcareercoach,participantsareofferedsixmonthsoffreecoaching,followingtechemployabilityworkshops,wheretheyworktogethertolearnallabouttheindustryandgainvaluabledigitalandAIskillsfortheirCVs.Sincethestart,nearly1,000participantshavestartedtheprogrammewithover300progressingintoemploymentorapprenticeships.

NaomiHulston,CEOofCatch22,said:“TheapplicationofAIacrossallsortsofaspectsofourlivesishugelyexcitingandfilledwithpotential.Butforsomepeople,thispotentialistingedwithfear;afearoftheunknown,afearofbeingleftbehindandafearofnothavingtherightskillstobepartoftheAIrevolution.Byempoweringpeopletoembracethisnewwaveoftechnology,we’llmakesurenobody—whatevertheirage,backgroundorchallenges—isleftbehind.”

24

TheReturnsfrom

DigitalInvestment

25

26

Inourbusinesspoll,seniordecisionmakerstoldusaboutthemanybenefitstheyhadalreadyenjoyedfromdigitaltechnology,specificallyutilisationofthecloud:

84%

85%

81%

78%

ofcloudusers

ofclouduserstold

ofcloudusers

ofcloudusers

toldusthatit

usthattheyhad

toldusthatithad

toldusthat

hadincreased

founditeasierto

helpedsupport

ithadhelped

efficiencyintheirbusiness

keepsoftwareuptodate

flexibleworking

improveworkercollaboration

Lookingforward,themajorityofbusinessesreportedbelievingavarietyofusecasescouldberelevantfortheirbusiness,includingAIsupporteddrafting(66%),cybersecurity(63%)andtohelpanswercustomerqueries(60%.)

Which,ifany,ofthefollowingpotentialfutureusecasesofAIdoyouthinkcouldbe

relevantforyourbusiness?

Intotal,weestimatethatinvestmentindigitaltechnologiesandskillscouldhaveanaveragesocietalReturnonInvestment(ROI)over5:1inthenextdecade-thatis,foreveryextra£1spentbycompanies,theeconomycouldgrowby£5.8

8PublicFirstestimatebasedonaweightedaverageROIofinvestmentinAI,cloud,datacentresanddigitalskills.

ReducingBarriersto

DigitalAdoption

27

28

Despitethepotentialofdigitaltechnology,wecontinuedtoseesignificantvariationintheuptakeofkeytechnologies.Whileover90%oflargebusinessesintheUKhaveadoptedthecloud,almostathird(31%)ofSMEssaidthatcurrentlytheydon’tuseit.ThestoryisevenmorestarkwhenitcomestousingAItools,withalmosthalfofUKSMEs(47%)sayingtheyuseneitherdedicatedAItools,AIfeaturesbuiltintoexistingapplicationsnorAIdrivenroboticsormachinery.

Onaverage,wefoundthatcompanieswhoserevenuehadgrownbymorethan10%inthelastyearwereusingover50%moredigitaltechnologiesthancompanieswhoserevenuehadstayedthesameorshrunk.

Whenweaskedcompanieswhatthemostimportantbarriersweretothemusingdigitaltechnology,themostsignificantreasonwasalackofawareness-withhalfofcompaniessayingtheydidnotknowofanycompellingusecasestoinvestinfurtherdigitaltechnology.

Andwhich,ifany,ofthefollowingareimportantbarrierswhichexplainwhyyour

companydoesn’tusemoredigitaltechnology?

29

WhenweaskedaboutthebarrierstoadoptiontoAImorespecificallyhowever,wefoundthatmoreconcreteobstacleswereseenasimportant:concernsaboutthequalityofoutputs(73%),thepotentialunreliabilityofAIsystems(72%)andtheirlackoftransparency(71%).

Howimportantorunimportantdoyouthinkthefollowingarelikelytobeasbarriers

toyourbusinessmakingmoreuseofAItools?

TheseconcernsarelikelytofadeasAIsystemsbecomemoremature:becomingmorereliable,andwithbestpracticeestablishedinhowtointegratethemintoothersystemsandprocesses.Likeanynewtechnology,itwilltaketimetounderstandwhereAIcanbemosthelpfullydeployed.However,thisnervousnesssuggeststhereisalsopotentiallyaroleforotherpartnersandguidancetosupportwithandteachbestpracticeinhowtodeployAI.

JoosusesCopilotforMicrosoft365togrow

Joos,asupplierofmobilechargingstations,isusingCopilotforMicrosoft365asitexpandsinNorthAmericaandEurope.

WithteammembersacrossEurope,NorthAmerica,GhanaandChinaworkingwithcolleaguesacrosstimezonesispartandparceloflifeatJoos.UsingCopilothasbeenagame-changerforcollaborationandsharingacrossthecompany.

“ThefactthatCopilotquicklygeneratesmeetingrecapswithnotesandactionitemshasactuallychangedthewaywestructureourmeetings”saysJeannetteIkonga,HeadofClientSuccessandCustomerexperienceatJoos.

JoosisalsousingCopilotrightacrosstheMicrosoft365toolset–fromusingCopilotinPowerPointtocreatebrandedsalespitchestosummarisinglongdocumentsintheonboardingprocesshelpingtocutdownthetimeforbothonboardingmeetingsandtrainings.

30

UnlockingValuein

thePublicSector

31

AIcouldbeassignificantaboosttoproductivityinthepublicsectorasitwillbeintheprivatesector.Inourmodelling,wefindthattheaverageaugmentationpotentialofpublicsectoroccupationsisonlyaround15%lessthanthatofthoseintheprivatesector.Intotal,weestimatethatgreateruseofAItosupportthecompletionofroutinetasksandadministrationinthepublicsectorcouldcreateover£12billioninsavingsforthepublicsectorby2030.By2035greateruseofAIcouldsavetheUK’spublicsector£17billion.Thatwouldbeenoughtopaythesalaryforover330,000additionalnurses.9

ThisisbroadlywelcomedbytheBritishpublic.Takehealthcare-inrecentconsumerpollingbyPublicFirst:

63%

61%

65%

oftheUKpublicagreed

oftheUKpublicsaidthat

oftheUKpublicagreed

thatadoptingAItoolsin

theywouldsupportthe

thatadoptingAItools

theNHSwouldimprove

greateruseofAIin

couldhelpGPsto

thequalityofhealth

healthcare

becomemoreefficientin

services

theirday-to-dayjobs

OneareawhereAIcouldbeparticularlypowerfulishelpingwithearlierdetectionofemergingillnesses.WeestimatethattheuseofAIintheNHStosupportearlierdetectioncouldsaveanadditional£500millionby2030.

MicrosoftAzuresupportsNHSGrampianintriallingAIforbreastcancerdetection

NHSGrampianinScotlandistriallingMia,anAIsolutiondevelopedbyKheironMedicalTechnologiesandsupportedbyMicrosoftAzure,toadvancebreastcancerscreening.Insteadofrequiringtwospecialiststoreadeachscan,thetrialseekstodemonstratethatAIworkingwithonehighlytrainedradiologistdeliversfasterresults,addressesthemammogrambacklogandenhancesdetection.

Miaanalysedover220,000mammogramimagesoverathree-yearcycle,identifying271cancerscomparedtothe261thatwouldhavebeendetectedbyjustoneradiologist.Italsodetected47additional‘interval’cancersthanwouldnothavebeenidentifiedbytwospecialiststogether.

AIscreeningpromisesscalabilitythroughMicrosoft’scloud.Deploymentsareunderwayat14additionalNHSsites,meaningover500,000womenayearcouldbescreenedbyMia.Mobilemammogramunitscanalsobeusedacrossremoteareas,withimagestransferredviathecloud(withpatientdatade-identified)andquicklyreadbyMiabeforebeingsharedwithradiologists.

9Basedon

.uk/insight-and-analysis/data-and-charts/key-facts-figures-nhs

32

Methodology

33

34

EstimatedReturnonInvestmentfromDigitalTechnologiesandSkills

Inordertoestimatethepotentialsocietalreturnoninvestmentfromdigitaltechnologyandskills,wetookaweightedestimateoftheestimatedsocietalROIfrominvestinginAI,datacentres,cloudservicesanddigitalskills:

.ForAI,wefirstcalculatedthepotentialproductivityincreasefromAItools,drawingour

mainAImodel(seebelow)andtheestimatesfrom

Mollicketal(2023)

.Wethenapplied

thistoaworkerontheaverageUKwage,assumingtheywouldneedtoinvestinatleast3

AItools.

.Fordatacentres,wedrewonaliteraturereviewofpublicestimatesorfinancialstatementsonaveragereturnfordatacentreproviders.Wethenaddedtothisadditionalemployeecompensation,drawingonONSAnnualBusinessSurveydataonthelaboursharefordataprocessing,hostingandrelatedactivitiesandtelecommunications.

.Forcloudservices,wecombinedestimatesfromPublicFirst’sinternaldatasetonaveragecostsavings,revenueincreasesandROIforcloudusers,withawiderreviewofotherpublishedestimates.

.Fordigitalskills,wedrewonanewliteraturereviewoftheaveragewageimpactofdigitalskillstraining,combinedwithanassumptionthataround40%ofthisimpactwasadditional,basedonprevioussurveyworkondigitalskillsstudents.

35

EconomicOpportunityfromAI

InordertocalculatethesizeofthepotentialeconomicopportunityfromgenerativeAIfortheUKwe:

.Buildingonthemethodologyof

Eloundouetal(2023)

,weuseGPT-4toclassifytheprobabilitythatamultimodalLLM,ortoolsbuiltontopofit,couldsignificantlyreducethetimeittakesforworkerstocompleteover17,000combinationsoftasksandoccupationsdrawnfromtheUSO*NETdatabase.

.Forourpromptingstrategy,wefollowed