Cassandra MacDonald, Dean of School of Technology, BPP
In today’s rapidly evolving global economy, the UK stands at a pivotal crossroads. Its ability to maintain competitiveness globally hinges on the economy’s ability to leverage the potential of artificial intelligence (AI) and digital technologies. These advancements are revolutionising industries, driving productivity, and fostering new economic opportunities.
However, the UK faces a challenge in the technology’s adoption: a widening skills gap in AI and digital expertise. Without swift action to nurture and attract this talent, the UK economy risks falling behind its global competitors. Leading sectors such as the UK’s finance industry, must take the lead in adopting and cultivating the skills of the future.
Addressing the Skills Crisis on a National Scale
Skills gaps have prompted significant national action. For example, in 2023, the Centre for Finance, Innovation and Technology (CFIT) was launched with £5m seed backing from the Treasury. CFIT rolled out a number of partner initiatives with universities to train undergraduates with digital skills.
However, the scale of the skills crisis is still severe. In the financial sector alone, there are almost 20,000 unfilled job vacancies, and there has been a notable decline in apprenticeship participation. This highlights the need for immediate action on AI and digital skills. Moreover, facing an aging workforce and increasing early retirements, the finance industry cannot wait for the next generation to develop these essential capabilities.
Current Workforce Requirements
Data from Skills England’s Occupations in Demand index (September 2024) highlights the urgent skills needs within the UK economy. The report shows that 7.8% of the UK’s working-age population (2.5 million workers) occupy critically demanded roles, while 38.5% (11.6 million) are in elevated demand occupations. The finance and insurance industry have the highest proportion of the total industry workforce (69.4%) in critical or elevated demand occupations.
In the finance sector specifically, roles that blend traditional expertise with emerging digital skills are in particularly high demand. From finance and investment analysts and advisers to programmers and software development professionals, the demand is multifaceted.
The data underscores a critical point: the UK must urgently bridge the gap between traditional finance disciplines and emerging digital technologies.
Why AI and Digital Technology are Economic Catalysts
AI and digital technologies are already recognised as key drivers of economic growth. According to a 2021 PwC report, AI alone could contribute up to £232 billion to the UK economy by 2030, representing a 10.3% boost to GDP. This growth stems from AI’s ability to improve productivity, streamline processes, and enable innovation across sectors such as healthcare, finance, logistics, and manufacturing.
Similarly, digital technologies like cloud computing, big data, and cybersecurity are the backbone of modern business operations. The UK’s digital economy, which generates over £150 billion annually, has seen significant expansion in recent years. However, sustaining this growth demands a steady pipeline of skilled professionals to drive innovation and ensure competitiveness.
Given this urgency, it is essential to upskill the current workforce without waiting for the next generation. Reskilling, upskilling, and fundamentally rethinking how skills are delivered are imperative as the UK navigates a technological revolution.
Upskilling amidst the AI Revolution
Technological advancements have always required new skillsets, and the rise of AI and digital technologies presents unique challenges. Unlike previous innovations, AI has the potential to radically transform industries and redefine job roles entirely.
In finance, admin tasks such as expense and cost management, and predictive analytics are likely to be automated, freeing up professionals to focus on creativity, problem-solving, and other critical soft skills. While AI is poised to create new job opportunities, it will also disrupt existing roles, requiring many workers to adapt or transition into new careers.
The McKinsey Global Institute estimates that up to 70% of existing work activities could be automated by AI, potentially impacting 12 million workers across Europe and the US. For the UK, this underscores the urgency of reskilling and upskilling efforts to prepare the workforce for these changes.
Rethinking Workforce Skills
In an increasingly AI-driven economy, economic resilience and career advancement depend on reskilling and upskilling the workforce. As automation reshapes roles, employees must be equipped with the skills to adapt and thrive in this new landscape.
For existing workers, businesses need to develop robust training programs and professional development opportunities. Training in AI-powered predictive tools or coding languages are just two examples of how businesses can help employees enhance their capabilities in line with industry shifts.
Given the rapid pace of technological advancement and an aging workforce, it is imperative to address skills gaps now rather than waiting for future generations to fill them.
Reskilling will also be critical for workers whose roles are at risk of automation. These individuals must embrace new opportunities and technologies, transitioning into roles that align with the evolving demands of the economy.
Seizing the Opportunities of AI and Digital Technologies
AI and digital technologies will present challenges, but also offer unparalleled opportunities for growth, productivity, and innovation. By prioritising upskilling and reskilling efforts within Finance, businesses can enhance their competitiveness while reducing recruitment costs.
On a broader scale, addressing the skills gap now will help create an inclusive economy, ensuring more people can prosper in the digital age. Bridging this gap will be instrumental in securing the UK’s position as a global leader in leveraging AI and digital innovations.