Why the UK is losing the AI skills race
We are the third-largest AI market in the world but risk slipping down the global rankings unless urgent action is taken, argues IBM’s Leon Butler
Technology is moving faster than it ever has – but slower than it ever will. It is no longer enough to just respond to this rapid change. UK government and businesses must anticipate and lead it. We are the third-largest AI market in the world, but risk slipping down the global rankings unless urgent action is taken.
The UK government’s AI Opportunities Action plan, published last year, estimates AI could grow the UK economy by an additional £400bn within five years by boosting innovation and productivity. This creates a major opportunity for UK companies to sharpen their competitive edge and empowers governments to deliver faster, smarter public services.
Achieving this requires unwavering commitment to trusted AI, strong regulatory frameworks, and the right people at the right moment. Our recent Race for ROI study highlights that despite billions invested in AI, 62 per cent of UK organisations say they are not seeing the returns they expected – and that reskilling is in fact the key to unlocking greater productivity.
The UK is at a critical turning point, and the real barrier isn’t technology – it’s whether we have a workforce equipped with the skills to use it. The proliferation of unaccredited AI ‘experts’ risks diluting genuine technical capability in the workforce. In some cases, it’s the blind leading the blind: people learning incorrect concepts and then passing that same misinformation along to others. This not only creates confusion but also undermines the real opportunities AI can unlock when approached with clarity, credibility and genuine expertise.
AI upskilling key for UK economy
The government last month issued a timely report, AI Skills for Life and Work, which brought home the likely scale of the challenge. The demand for AI skills is predicted to grow significantly, with jobs involving core AI activities projected to rise to 12 per cent of the workforce (nearly 4m people) by 2035. Closing this clear skills gap requires a fundamental rethink of how the UK develops technical talent. The government has also made a positive start with the recent announcement of the AI Skills Hub. Founding partners, including IBM, have welcomed the expansion of the initiative to train 10m workers by 2030, but we need to accelerate.
This means a decisive shift toward equipping workers with open‑technology skills, moving beyond simple tasks such as the summarisation of minutes, to drive innovation and ensure widespread access to AI’s benefits. Early professional pathways are also critical to creating a more productive, AI-ready workforce.
Having started on the IBM early professional program myself, I know the importance of investing in skills to transform careers. While apprenticeships aren’t new, they’re underrepresented in modern fields such as AI. They help embed skills directly into the workplace, ensuring learning translates into output beyond theory-based learning. The gains are likely to be significant. Research from the Chartered Management Institute found that higher-level apprentices who qualified in 2019 are expected to contribute £7bn to the UK economy by 2029.
Beyond apprenticeships, there is a need to teach AI literacy in schools and colleges. Having a greater focus on T Levels – which blend two years of technical study with a mandatory industry placement for 16–19‑year‑olds – is a logical step. But that potential hinges on continued employer commitment.
Last month, we welcomed local Mayor Andy Burnham to our IBM Manchester office to celebrate 1,000 T Level pledges in the Greater Manchester area. Again, these initiatives require involvement and backing from both government and business.
AI will reshape the labour market at unprecedented speed, and only a nationwide commitment to lifelong learning will keep the UK competitive. Industry, government and academia must now act together to build the skills base that will determine Britain’s economic future.
Leon Butler is chief executive at IBM UK & Ireland