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24 January 2025

Britain must lead in the race for digital skills

A digitally enabled workforce is critical to the UK’s global competitiveness.

By Sharon Hague

Keir Starmer rightly identifies that AI should be central to the UK’s future economic vision – but the skills people need to navigate this new era are in short supply. While the UK boasts strengths in education, research, and workforce adaptability, we must be bold and move fast to take advantage of this moment.

Across industries – particularly in the UK’s growth sectors such as life sciences, manufacturing and clean energy – the swift adoption of AI and related technologies is outpacing initiatives to equip workers with the essential skills and expertise needed to leverage these technologies effectively. This issue is exacerbated by an ageing workforce, leading to growing skills gaps and vacancies across critical professions.

This combination of demographic shifts, technological advances and an unprepared workforce risk turning a “skills gap” into a “skills chasm”. This is not a distant problem. An acute mismatch already affects businesses, public services and education, impacting productivity. According to the Productivity Institute, between 2010 and 2022, the UK’s output per hour rose just 0.5 per cent per year, which is in the bottom half of the OECD, below the average for the eurozone, and well below the US.

When we talk with schools and colleges about AI, a common concern is how their students will use it in the workplace. The educators see it as their responsibility to equip students with the skills they need for their future careers. This issue is particularly urgent, as our recent Skills Map of England reveals that while 390,000 new jobs will be created by 2027 around two million people will need to reskill or upskill to remain competitive in a changing workforce. While AI and automation may not necessarily mean fewer jobs, we need to prepare young people for different jobs.

Our country is uniquely placed to respond to these challenges and opportunities. We have a reputation as a world leader in the safety, security, IP innovation and ethical use of AI. But the rapid adoption of AI around the world, particularly in the US and China, underscores the urgency for the UK to act now.

We believe that there are critical actions the government can take swiftly to ensure the UK remains competitive in this global race.

First, to lead in AI, ministers, employers, and educators must be able to deeply understand and respond to skills gaps in real time. A practical step for the UK would be tasking the Government’s new Skills England body to develop a National AI Skills Database.

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This centralised resource could analyse macro workforce trends to guide education policy to dynamically adapt to the reskilling and upskilling needs of adults and students in schools and colleges. Identifying these gaps early, before they become acute, would allow for more targeted interventions that prevent workforce shortages from occurring.

Second, preparing people for an AI-enabled workforce must begin in schools and colleges. This starts with addressing the basics, like improving digital infrastructure, connectivity, and access to devices. Pearson’s recent research with the Centre for Economics and Business Research (CEBR) suggests that investment in digital technologies in schools and colleges could save educators the equivalent of five working weeks per year, freeing them to focus on inspiring and engaging their students.

Third, we must equip educators with the tools and knowledge to integrate AI into learning effectively. This means teaching AI literacy and technical skills while also creating more space in the curriculum to develop human strengths such as creativity, empathy, and critical thinking. A rapid “test and learn” pilot approach in schools, such as one being led by Pearson with Atypical AI, can provide valuable insights into how AI can best support teaching and learning.

AI is a powerful enabler, supporting teachers by streamlining tasks like continuous assessment and administrative work, while providing personalised learning for students. For instance, Pearson’s AI Instructor Tool in the US helps educators efficiently create assignments, freeing up more time for direct student engagement.

By reducing administrative burdens, AI empowers educators to focus on teaching students how to learn – a lifelong skill that nurtures curiosity, critical thinking, and a passion for discovery. Mounting research highlights that mastering this foundational ability contributes to better performance and accelerates progress over time. It also fosters a resilient, adaptable workforce, capable of thriving in a rapidly changing, technology-driven world.

This brings us to the next critical action: lifelong learning must seamlessly extend beyond the classroom and into every workplace. The curiosity and learning skills cultivated in schools and colleges must be reinforced and expanded through continuous development. To achieve this, we need to instil a culture of lifelong learning across the UK workforce, beginning with employers using data-driven insights to deliver flexible, accessible and relevant training programmes and assessments that help individuals to upskill and reskill throughout their careers.

Finally, our further education (FE) sector is vital in equipping students for careers in an AI-driven economy and enabling large-scale workforce upskilling. FE colleges already collaborate with industry to align training with employer needs, exemplified by the establishment of new Institute of Technology centres across the UK. Building on these partnerships and strengthening them with further investment will ensure that vocational programmes can continue to provide learners with the critical skills required to thrive in an AI-enabled economy.

The UK has the resources, expertise, and ethical foundation to take a leadership role in AI, but we must take bold and decisive action. This transformation is not just about technology; it is about empowering people. By placing education, skills and workforce innovation at the heart of its AI strategy, the government can ensure AI drives economic resilience, global leadership and human progress. Investing in the UK’s greatest asset – its people – will enable the UK to thrive in an AI-enabled world, and now is the time to seize this extraordinary opportunity.

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