There are many standouts to KPMG’s latest private enterprise Pulse survey – confidence is remarkably high, diversification is a key ambition, and investment in technology is seen as the number one route to realising growth plans.
But what also stands out is that private enterprise leaders recognise investment in workforce skills as a critical piece of the puzzle. It is their second highest investment priority behind technology.
This makes good sense. There is a symbiotic relationship between AI, workforce skills and productivity. Leaders are highly focused on leveraging AI (and other digitisation) as the means to make their businesses more efficient, output orientated and productive. But they also know that AI is essentially just a tool – it is your people that tell it what to do, assess the results, and use the outputs.
When generative AI was a newer phenomenon, there was a lot of conversation around machines replacing people – doom-laden scenarios of large-scale job losses. However, in the conversations I’m having with businesses, the discussion has moved on. While AI will undoubtedly remove the need for certain (mainly routine) roles, its much larger effect will be to change particular aspects of jobs – moving humans onto higher-value and more strategic tasks.
It’s perhaps reminiscent of when Excel was released – I remember people discussing whether accountants would be needed anymore! In fact, there are more accountants today than probably ever before. What Excel did was enable more analysis and more forecasts – it helped people assess data in more granular and intelligent ways. It will be the same kind of story with AI.
Not only can AI supercharge productivity, but it can also help businesses move into adjacent sectors where costs and barriers to entry are low. For entrepreneurs, this opens up exciting possibilities, because their start-up or scale-up may be able to move into an adjacency where valuation multiples are higher – creating the prospect of a substantially increased return on disposal or exit.
What AI does do on the people front is increase the need – and quite urgently – for upskilling and training of staff. Only if people are confident and able to use the AI tools and applications at their disposal will its value be realised. For example, the use of prompts is absolutely key to the effectiveness of a generative AI platform. And there is quite a skill to framing a good prompt. This has given rise to a whole new breed of software development expert – prompt engineers. But on a broader level, every member of staff needs to know how to write an effective prompt for their particular purposes.
A question for private enterprise leaders – and indeed the leaders of large corporates too – is whether skills and training needs for AI have been assessed across the workforce. Is there a training plan against this? Are resources and guidance available to staff? Does the company have a clear, published policy on AI usage including guidelines on responsible practices as well as security and data protection protocols?
It is also interesting to see in our survey results that business leaders are looking to government for some help on this. When asked what they would like to see prioritised in the Autumn Budget, measures to support technology adoption were the top response (44%), followed by the protection of business profitability (35%) – but policies to support workforce and skills were not far behind (31%).
The government has placed AI and technology very much at the heart of its strategy to drive UK growth and innovation – and this is very encouraging. Its Industrial Strategy reinforces this, and is also very supportive of the key role of businesses in the regions, not just FTSE titans in the City.
The relative stability we now have, with the government in situ for over a year and having set out its business-related strategy for the years ahead, has bolstered business confidence – even if there are concerns (as reflected in our research) about the tax and employment cost burdens they are being asked to bear. Here again, though, AI offers a route to navigate a way through workforce and cost challenges. Internationally of course the picture is still volatile and unpredictable, with the US tariff regime in particular creating headwinds. But the UK trade deal with the US shelters our businesses from the worst of this.
What we see overall is that the UK’s mid-market businesses remain full of anticipation for the future. They are leaning into the challenges – and they are rightly putting investment in their people as the key supporting mechanism to unlock the huge, potentially transformative, potential of AI.
