AI could add GBP £2 billion to UK GDP & create 20,000 jobs

The accounting industry in the United Kingdom is poised for a significant transformation, driven by widespread adoption of Artificial Intelligence (AI). According to a new study by Sage, in collaboration with cross-party think tank Demos, AI integration could inject GBP £2 billion into the country's GDP, increase exports by GBP £238 million, and create nearly 20,000 jobs in the next three years.

Accountants and bookkeepers are at the forefront of this technological revolution. The research indicates that these professionals are adopting AI technologies at a faster rate than other sectors, with 54% of accounting practices piloting or using AI as of September 2023. This is in contrast to the 39% of businesses across all UK sectors. AI-enabled practices are expecting to hire ten times more employees and see their revenue grow three times faster compared to non-users.

Key technologies driving this shift include chatbots, utilised by 51% of AI-adopting practices, AI and machine learning tools (34%), AI-driven insights and reporting (32%), AI-powered document processing (30%), and machine learning for forecasting (29%). These advancements are not just about efficiency but also about creating new opportunities. For instance, 61% of accountants believe that AI will generate more opportunities than risks, and 68% are confident in adapting to these changes.

Sage's Chief Technology Officer, Aaron Harris, commented, "Our research shows the prize for the UK economy if the accounting industry adopts AI. However, the UK currently trails behind other OECD countries in digital technology investment, risking future growth and competitiveness. AI adoption in accounting promises economic advantages, improved workplace well-being, and enhanced job satisfaction by automating routine tasks and attracting new talent."

The study underscores the need for supportive policies to foster an environment conducive to AI integration. Demos' Director of Policy and Impact, Andrew O'Brien, emphasised the importance of government intervention: "If the government wants to achieve its 'first mission' of delivering sustained economic growth, it must have a plan for accelerating digital adoption across key sectors of our economy, like accounting. This research shows that if we get the policy environment right, we can create investment, jobs, and exports for the UK economy by backing our accountants and bookkeepers to make the transition towards greater use of AI."

To further this aim, the research calls for specific initiatives, including a long-term AI Skills Fund, reform of the Apprenticeship Levy, and extended full expensing of capital investments in digital technology. Other recommendations include introducing e-invoicing to support Making Tax Digital and establishing a supportive regulatory framework for AI.

The economic analysis used data from the Office for National Statistics and Oxford Economics to project the potential contributions of AI. The findings reveal that the accounting industry, already a significant part of the UK economy with a GDP contribution of GBP £33.3 billion and employing 323,000 people, stands to gain even more from AI adoption.

Professionals within the industry also echo these sentiments. George Moss, Practice Manager at Stockton-based Bee Motion, sees a future where AI allows accountants to become business coaches: "AI will transform our roles from number crunchers to business coaches. Technology will take care of mundane tasks and free up time to engage more with clients and advise on business growth. I expect a dynamic blend of tech and human touch in our future."

Caroline Armstrong, Founder of Infinitas Accounting in Northamptonshire, highlighted the skills gap issue: "As an industry, we've got a knowledge and skills gap, and we don't have enough people coming through to do the jobs available. AI will only create more opportunities and attract new and younger talent excited by technology's potential."

The study suggests that UK policymakers must create the right environment to fully leverage AI technologies in accounting. Without proactive measures, the UK risks falling behind its global counterparts in digital technology investment, impacting future economic growth and competitiveness."