The UK’s productivity puzzle: Is AI the answer?

Productivity has been a key agenda item for all businesses in 2024. Being productive holds significant advantages for those that master it, from being competitive in the market, through to having a happy, engaged workforce. However, achieving the potential that productivity provides isn’t straightforward, with many businesses still striving to solve this puzzle.

When it comes to productivity, the UK continues to lag behind other advanced economies. According to the Organisation for Economic Co-operation and Development (OECD), the UK is in the bottom half of the global rankings, below France, Germany and the United States and performing slightly below average when only looking at the Euro area.

While there is ground to make up in the UK, new technologies such as Artificial Intelligence (AI) and Machine Learning (ML) are constantly evolving to automate laborious tasks and help businesses improve their productivity. Furthermore, data produced by businesses can be used and analysed by these technologies to ascertain powerful insights that improve output and day-to-day efficiencies.

With AI predicted to contribute up to $15.7 trillion to the global economy by 2030 and $6.6 trillion of this expected to come directly from increased productivity, it’s clear to see AI is set to make a huge difference to how businesses operate. UK businesses are certainly investing in new technologies, with 98% of firms saying they already use AI and ML, according to Deltek’s Clarity Trends and Insights for Architecture, Engineering and Consulting, but are their investments improving productivity issues?‍

A strategic approach to productivity‍

To truly understand the impact AI is having on business productivity – and ultimately the bottom line – a clear strategy on expected outputs and measurable business value is needed before rushing into implementation.

First and foremost, technology investments need to have a meaningful impact. This may sound obvious, but businesses under pressure may invest in new technologies and processes too early, merely to be seen as a first mover or to keep up with competitors, without developing a long-term roadmap for how the technology will be used in the business.

The key to addressing productivity through tech investment is to focus on where productivity drains lie. Every business has its own nuances and challenges, so where a competitor may invest might not be needed by others in the industry. Instead of investing in new technology to follow the pack or address a short-term issue, businesses need to make a company-wide assessment into where automation and AI could really help move the productivity needle.

Leaders then need to specify what success looks like, develop clear KPIs and, only when this has been done, investigate which technologies best fit their requirements. Putting in this foundational work means the technology will work long-term for business productivity, rather than the business having to shoehorn its strategy around the new investment. By taking an issue-first approach, businesses will see their investment return the best results for productivity.‍

Culture and team: the missing piece‍

Technology can enable productivity, but ultimately it is the people in an organisation that will be responsible for attaining efficiencies. Employees play a central role in embracing AI adoption for productivity gains and implementation of new technologies will not work if employees aren’t engaged and prepared to use it.

It is human nature to resist change: research from ONS shows that 32% of working adults worry that technology could put their jobs at risk. Understandably, this fear creates resistance. Project-based businesses must maintain a people first mantra to overcome such reservations and emphasise the importance of employee skills. This requires laying the right foundations to get the very best out of your talent through continuous tailored upskilling, providing the necessary enablement required for different levels and roles within the organisation.

Sometimes a puzzle piece just won’t fit, and the same is true with forced technology mandates. A people-first directive includes change management support and training. Organisations that show employees how new technologies will enable them to do their job more efficiently will win out. By including change management support and training as part of the implementation process, employees can better understand the many benefits these technologies have to offer and how to best use the tools, for increased productivity. With the right guidance and vision for productivity, firms will create a culture where employees feel empowered and valued in their jobs. This can also have the additional benefit of attracting other top talent, resulting in increased productivity across the organisation.

Part of this strategy includes focusing on benefits rather than forcing employees into processes. As Matthew Thomas, Director of JPE Design Studios states, “There is a myriad of new technologies. Therefore, the biggest challenge is determining which technology is useful for which purpose. This needs to be balanced with the learning curve of employees embracing a new technology versus staying with software they know and have mastered.” In the pursuit of productivity, firms must ensure this balance is a priority, namely through upskilling both technical and non-technical members of the team and tailoring requirements by role.‍

Now is the time to invest‍

There are huge opportunities and productivity gains to be had, made possible by emerging technologies. However, it’s important that firms interrogate the drivers behind an investment and how such investments will provide long-term gains. By starting with the issue, rather than the technology, investments should meet the business requirements for optimising processes and operations, leading to greater productivity and a stronger return on investment.

For successful adoption, it’s important to also bring the entire team on the journey, so technology is used as intended and is seen as a benefit rather than a threat.

Forward-thinking firms that use technology strategically and with their people in mind, will stay ahead of the competition. For those exploring transformation, there is no better time to act than now.