£80bn UK economy boost from improved AI skills – new report finds
The UK can secure an £80bn boost to its economy by 2035 if the government and businesses act together to strengthen the technical skills system, according to a major report published today by Learning and Work Institute (L&W) and The Rigby Foundation.
Entitled “Building an AI-ready workforce: Creating a skills system that prepares UK knowledge workers for the AI transition”, the report finds that the UK is well placed to adopt and scale artificial intelligence, with ambitions running high across the workforce and clear steps available to build the skills to match. The report’s financial modelling, based on the Office for Budget Responsibility’s (OBR) central scenario, shows that investing in people is key to realising AI’s full economic potential. Comprehensive AI upskilling could help deliver an economy-wide productivity boost of 2.3% by 2035, creating a net present value of £80bn over the next nine years.
As part of the report, a YouGov online survey of 1,012 UK-based HR decision-makers found that, while 85% of those surveyed currently use AI in some capacity, only 18% use it “extensively” within their operations, showing substantial room for growth. Large firms are leading the way, with 25% using AI extensively, more than twice the rate of small businesses (11%). And with 26% of small organisations yet to adopt AI at all, compared to 3% of large enterprises, smaller firms stand to gain the most from the transition.
Deepening this adoption would cement the UK’s early mover advantage in knowledge-intensive sectors like professional services, finance, and creative industries. The report identifies where targeted action can speed up AI adoption, including strengthening digital literacy and building leadership and management capability. Almost two-thirds (63%) of employers questioned stated that stronger leadership and management skills would help their organisations adopt AI more fully, while raising the share of the UK working-age population able to complete all 20 basic tasks in the government’s Essential Digital Skills framework (currently 48%) would give every worker a stake in the opportunity.
L&W and The Rigby Foundation are calling on the government to deploy a “strategic state” model to support business upskilling through five key recommendations:
- Incentivise employer investment: Introduce a Skills Tax Credit (providing a 20p credit for every £1 spent on accredited training), featuring a 30p “AI super-rate” until 2030 to drive urgent adoption.
- Close the skills gap: Establish a dedicated AI Skills Intelligence Unit (AISIU) for sector bodies to provide practical AI applications and work with employers to consider quality “kitemarks” for non-accredited training.
- Build AI-ready management capability: Revitalise the Help to Grow: Management scheme with a dedicated AI transition module.
- Update the accredited system faster: Halve standard approval times for technical qualifications and introduce modular, AI-ready “bolt-ons” to existing vocational courses.
- Make AI skills portable: Launch standardised, industry-recognised AI microcredentials and guarantee training completion for workers who are made redundant.
Stephen Evans, chief executive of Learning and Work Institute, said: “The UK’s AI advantage depends on ensuring that the leaders and workers who make up our economy at large have the skills to make the most of these new technologies. AI has transformative potential, and the gains are within reach. By building basic digital skills across the working-age population and updating technical qualifications faster, we can turn widespread enthusiasm for AI into real productivity growth. We need employers to invest in training as much as AI, backed by an agile skills system, to make the most of the huge potential ahead.”
Steve Rigby, CEO of Rigby Group and chair of the Rigby Foundation, said: “AI is the biggest growth opportunity in the UK and the moment to act is now. The investment needed is minimal compared to the size of the prize. An £80bn return on investing in our workforce is within reach, and SMEs and government together can make this AI transition a success story for the whole economy. The new administration has a golden opportunity to reform the current skills system and drive immediate, productive investment in human capital.”
The research utilised a mixed-methods approach including a YouGov survey of 1,012 UK-based HR decision-makers conducted in June 2026, a literature review, qualitative interviews, and a cost-benefit ratio (BCR) model designed using HM Treasury Green Book guidelines.