AI to transform UK economy, wages and living standards

PwC UK's 2024 AI Jobs Barometer

Insight
10 minute read

Artificial intelligence (AI) is expected to have a transformative impact on jobs, skills and wages in the UK, helping to unlock the 'productivity puzzle' and drive economic growth.

{{14}}% average

wage premium UK employers are prepared to pay for workers with AI skills
{{3.6}} times

faster growth in posts for AI jobs than all jobs in the UK
{{4.8}} times

greater labour productivity growth, globally, for sectors with greater exposure to AI

Long-term productivity issues are a key economic challenge for the UK, hindering short-term growth and reducing our global competitiveness. AI could boost productivity, helping to bridge the gap with other nations, increase prosperity and improve living standards.

PwC’s first global AI Jobs Barometer shows AI is associated with a positive impact on productivity. In the UK, it finds a slightly above-average uptick in productivity in AI-exposed sectors, such as financial services, information technology and professional services.

The report, which analyses half a billion job adverts from 15 countries and four continents, highlights the impact on jobs, skills and wages - with AI able to transform how workers can apply information, create content, and deliver results at speed and scale.

Impact of AI on:

Productivity

Since the financial crisis, UK productivity has trailed that of the other G7 nations, bar Japan, growing just 2.2% on average between 2008 and 2021, with the gap widening in recent years. There has been much speculation that AI will supercharge workers’ productivity - and there is now evidence to suggest this is fast becoming a reality.

Our report shows sectors more exposed to AI (where AI can be readily used for some tasks) are seeing an almost fivefold increase in the rate of productivity growth globally than those less exposed. This paints a positive picture of the impact of AI on global labour markets and indicates the potential AI has to solve the UK's productivity puzzle - bringing a transformative boost to the economy, wages and living standards.

Jobs

Jobs that require AI specialist skills carry a 14% average wage premium in the UK, according to the report. Among the professions benefitting most are lawyers, with employers willing to pay a 27% premium for those with AI skills, and database designers and administrators, who can command a 58% premium.

However, AI’s impact is not limited to those with specialist AI skills. Most workers who use AI tools don't have or need specialist skills. We analysed all jobs by their level of ‘AI exposure' - where higher exposure means AI can more readily be used for some tasks.

Examples of jobs with higher exposure are financial analysts, customer service agents, software coders and administration managers. As previously mentioned, sectors with higher AI exposure are experiencing much higher labour productivity growth. At the same time, the skills demanded by employers in AI-exposed occupations are changing fast.

Skills

Posts for specialist AI jobs (those requiring technical skills, such as machine learning) in the UK have grown 3.6 times faster than for all jobs over the last decade.

While job openings in AI-exposed sectors - those which readily use AI and don't need specialist skills - are still growing, the sectors less exposed are in greater need of specialist skills. Job openings in these sectors - such as transport, construction and manufacturing - are growing at around 46% faster.

This demonstrates that while there is still demand for roles where AI can be used for certain tasks, it’s important that workers adapt and build new skills for the fast-evolving jobs market. Indeed, 64% of UK CEOs said AI will require most of their workforce to develop new skills in the next three years, according to PwC’s 27th Annual CEO Survey.

“We can now say with confidence that AI is good for the economy - we've got the data to prove it. It's clear once the technology improves and diffuses across other sectors of the economy, this transformative trend will intensify. More new roles will be created and the demand in skills required will continue to change. If organisations can’t adapt their workforce, they can’t compete - and no more so than in relation to talent and skills.”

_{Alastair Woods

Workforce Markets and Services Leader, PwC UK}

Adapting the UK workforce

Organisations, workers and policymakers share responsibility for helping build the workforce skills to succeed in the job market. Skills sought by employers are changing at a 25% higher rate in occupations most exposed to AI, according to our report.

To stay relevant in these occupations, workers will need to demonstrate or acquire new skills. Workers in the UK have been more doubtful than their global counterparts that AI will improve their productivity or efficiency at work. Our 2023 Workforce Hopes and Fears Survey found just 19% thought AI would increase their productivity or efficiency, compared with 31% globally. Meanwhile, only 14% of workers believed AI could create new job opportunities, compared with 21% globally.

We expect greater optimism from workers in this year's survey, as awareness of the transformative impact of AI spreads. It is becoming clear the workforce will be very different by the end of the decade as AI beds in. Workers who learn to harness AI are likely to have bright futures in which they can generate greater value and consequently have greater bargaining power for wages - which in turn boosts economic prosperity.

Careful management is needed if the UK workforce is going to successfully adapt for an AI age. To benefit from the transformative impact of AI, organisations, workers and policymakers can take the following steps:

Organisations
Workers
Policymakers

Organisations

Embrace, experiment, and pioneer new uses of Al. Think beyond using Al to do
existing tasks. Instead, pioneer new ways to create value.
Build a climate of confidence and trust in using Al so people are more likely to
try it.
Use Al to complement people. Figure out where Al is best used in partnership
with people.
Hire on the basis of skills rather than only degrees or work history.
Upskill workers to make the most of Al.

Workers

Embrace and experiment. Seek ways to make the most of Al to complement and empower you.
Build skills to be sought after in an Al-driven jobs market (e.g. skills that complement Al or are difficult for Al to do).