Optimism returning to UK industries as businesses bet on AI, but cost control and talent challenges remain

Posted on 10 Apr 2024 by The Manufacturer

A new report from Autodesk has revealed that resilience and optimism is returning to the UK’s design and make industries as companies continue to invest in AI.

However, as businesses continue to navigate difficult trading conditions, controlling costs, attracting talent and upskilling the workforce remain key priorities.

Returning for a second year, the 2024 State of Design & Make report is a study of 5,400 global business leaders – including 589 in the UK – in industries that comprise the Design and Make category. These sectors include architecture, engineering, construction and operations (AECO), product design and manufacturing (D&M), and media and entertainment (M&E).

As businesses confront an ageing workforce, attrition and leaner teams, many have already turned to AI as a solution to increase the attractiveness of the work – and overall optimism for the technology is on the rise. According to the report, 79% of UK respondents trust AI technologies and 83% agree that AI will enhance their industry.

Looking ahead with confidence

As businesses battle for economic recovery – after the UK dipped into a recession at the end of last year – readiness for change and agility is critical. Last year, survey respondents emphasised the sense of uncertainty brought about by the global pandemic, geopolitical turmoil, and economic instability in many markets. This year, 81% of UK respondents say their company is prepared to handle unforeseen economic or geopolitical changes – higher than the global average of 73%.

The report also found that businesses are performing better and keeping pace with their competitors – 75% say their companies outperformed expectations throughout 2023, and only 5% say their company is not keeping up with the rate of change in the industry.

Despite this growing optimism, 47% still feel that the global landscape feels more uncertain now than three years ago. While many UK companies are looking to proactively improve their positions, taking steps such as planning new offerings, entering new markets, increasing agility and diversifying supply chains, this uncertainty is partially due to a need to cut operational costs and attract new talent from a shrinking pool.

Industries are betting big on AI

The report found that AI is shaping business transformation across industries as trust in AI is growing, with over three-fifths (61%) saying they are approaching or have achieved their goal of incorporating AI. Businesses are using AI to increase productivity and automate work, and leaders predict that generative AI will help people make critical design decisions about physical products, buildings, and digital assets in the next few years.

However, with this transformation, leaders across the design and make industries face talent shortages, with the speed of digitisation widening the skills gap. As workforces tighten, businesses see AI’s potential to help manage workloads on leaner teams, free up employees for more meaningful and creative work, and plug skills gaps. 86% of respondents are confident that their company will make the right decisions regarding AI and nearly half (47%) of industry professionals cited increasing productivity as the top use case for AI.

Talent shortage and cost control still hampering business efforts

UK businesses identified cost control as the top challenge experienced by over a third (35%) of leaders, followed by environmental sustainability (29%), and attracting, training and retaining talent (28%).

While UK industries are seeing increased productivity (34%), better reputation (31%) and improved profitability (30%) when investing in technology, a number of barriers prevent businesses from investing at the levels they would like. In fact, 39% of respondents said that cost was a barrier and 37% felt a lack of knowledge or technical skills to implement digital solutions was holding them back.

“It’s encouraging to see a level of optimism once again in the Uk industry despite the obvious challenges we have faced, and despite a continued level of uncertainty ahead. As we navigate these waters, it’s unsurprising that cost and talent management issues remain front of mind,” said Asif Moghal Director, D&M Market & Industry Development at Autodesk.

“Adopting in technologies that speed up product development agility, innovation, collaboration, operational efficiency and throughput can have a direct impact of managing costs as well as increasing the value-add potential for the UK. Whilst we still have a talent gap, digital technologies will enable the amazing men and women in our industry to achieve even more by augmenting their existing talents,” he continued.

“This will be all about testing the waters; investing in technologies that can drive efficiency, cut costs and help solve the complex demands around sustainability and talent shortages, whilst maintaining a solid foundation for financial longevity.

“To that end, we’re ahead of the global average in terms of preparedness, moving faster to adopt new technologies like AI which should form a solid foundation for growth and prosperity for the UK.”

Racing to upskill talent

As workforces tighten and the skills gap widens, continuous learning for employees across generations is paramount. Leaders know that digital maturity (74%) and efforts to be more sustainable (78%) help attract and retain talent. This is why 36% say supplementing a skills gap was a use case for AI at their business and 58% say sustainability efforts impact job satisfaction.

Organisations are finding ways to bridge the talent gap by amping up their talent acquisition and recruitment efforts, and diversifying their training and upskilling efforts. 76% said their company is implementing a continuous learning program to mitigate the shortage of skilled workers – compared to 62% who were doing so last year.

Sustainability is table stakes

With businesses under increasing pressure to become more sustainable as we move towards net zero targets, sustainability has emerged as a top priority for the design and make industries. Unsurprisingly, all of the businesses surveyed in the UK are taking steps to improve sustainability.

What’s clear is that leaders believe in sustainability for short- and long-term business success. This rings true in the research, where 84% see their company’s sustainability initiatives as a key part of its business growth strategy for the next three years. Almost a third (32%) of these leaders rank AI as a key vehicle to helping their companies to become more sustainable. 

Download the 2024 State of Design & Make Report here.

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