UK businesses are underprepared for the disruptive impact of AI and are at risk of being left behind by overseas competition, according to a major report by Microsoft.

The survey of more than 1,000 business leaders and 4,000 employees found that 41% of business leaders believe their current business model will be obsolete in five years’ time.

Despite this, just over half (51%) do not have a clear AI strategy in place.

There is also a major shortage when it comes to upskilling, with just 18% learning new skills for an AI dominated future.

With AI predicted to grow UK GDP by 10% by 2030, organisations without a clear AI strategy run the risk of missing out on the dividends of AI.

Microsoft UK CEO Cindy Rose stressed the importance of business and society being prepared for AI in order to “unlock its extraordinary potential for good”.

“It is our firm belief at Microsoft that adopting a human-centric approach can help organisations of all shapes, sizes, and sectors use AI to positively impact their businesses, employees, and customers alike,” she said.

“But success tomorrow requires action today – organisations must act now to maximise the AI opportunity.”

The report, Maximising the AI Opportunity, was released ahead of the Microsoft Future Decoded event taking place in London 31 October – 1 November.

During the keynote, Microsoft suggested that UK organisations take an ethics orientated position to set out their priorities. They should then clarify the nature of the job while augmenting existing skills with continuous learning.

Ethics-driven approach to an AI strategy

Lord Clement-Jones, Chairman, House of Lords Select Committee on Artificial Intelligence echoed the need for an ethics-driven approach:

“Without doubt, artificial intelligence can provide a great opportunity for British society and the economy.

“Today the UK enjoys a position of AI innovation, so as we enter a crucial stage in its development and adoption, the country has a clear opportunity to be a world leader. For this, an ethics-backed partnership between business academia and government will be pivotal.”

In April, the House of Lords Artificial Intelligence Committee released their report on AI, which found that workers must be prepared for a jobless future and AI must be regulated before it gets out of hand.

During the Future Decoded opening keynote, Microsoft announced a raft of AI programmes for the UK to help address the shortage of skilled AI workers. They including a Microsoft AI Academy to help Microsoft’s UK customers and partners develop practical AI skills, as well as a multi-million-pound partnership between Microsoft Research Cambridge and the University of Cambridge.

Commenting on the report, Fujitsu head of public and private sector UK & Ireland Rupal Karia, said:

“British companies are at the head of the pack for driving innovation in this space, with AI having the potential to be truly transformative, empowering businesses and enabling people to thrive in a digital world.

“Yet, with the pace of change increasing rapidly, there is an expectation that businesses will be able to adopt new technologies at the same rate as they have previously done. And while UK businesses are undoubtedly excited about the digital journey we’re on, there is currently a risk that many will be left behind if they’re not able to adapt their business model to embrace technologies such as AI.”

He also called for government and tech sector to “join forces” to help cement the UK’s place as a “global leader in an increasingly digital world”.

Maximising the AI Strategy was conducted in partnership with Goldsmiths, University of London and YouGov.