Employers are struggling to keep up with AI transformation in the workforce due to a shortfall of AI skills, according to a new UK government report.

It is estimated that AI adoption could boost the UK economy by up to £400 billion by 2030 through enhancements in innovation and workplace productivity, according to the AI Opportunities Action Plan.

Published by Skills England, the AI skills in the UK workforce report lays bare stark challenges with upskilling for different sectors.

For example, AI opportunities are opening out for the construction sector, including drone-assisted surveying for land assessments, and augmented reality for on-site safety simulations. But adoption is slow, with a lack of basic digital literacy identified as a key issue for the sector.

With Creative Industries, AI is available for content creation and digital storytelling. However, the report indicates that too many freelancers and smaller employers are using the technology without training, sparking worries over quality control and originality.

And while AI is being applied in many areas in the UK for the Advanced Manufacturing sector – including with automation, predictive maintenance, and robotics – it faces a growing AI skills gap exacerbated by an ageing workforce.

A key common barrier to adoption is poor employer understanding, particularly among small and medium sized enterprises (SMEs), of what is meant by AI skills and what their staff need to learn.

“AI has the power to transform our economy – but only if people have the right skills to utilise it effectively. This report makes clear that too many employers are still unsure how to begin their AI journey,” Jacqui Smith, minister for skills, said.

“That’s why, through Skills England, we’re working hand-in-hand with industry to equip the workforce with the tools they need for the future. By doing so, we’re not just preparing our economy for the jobs of tomorrow – we’re raising living standards and putting more money in people’s pockets as part of our Plan for Change.”

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The report has introduced three brand new tools to support winder and more responsible AI adoption.

1. The AI Skills Framework identified relevant technical, responsible, and non-technical skills needed for different job roles and at different levels.
2. The AI Skills Adoption Pathway Model shows how organisations typically progress through stages of AI adoption, from initial awareness to strategic scaling.
3. The Employer AI Adoption Checklist provides structured prompts to help employers assess their AI skills readiness, identify workforce gaps, and upskill. It supports adoption of tools such as ChatGPT, image generation systems, and document summarisation platforms.

“It’s an absolute necessity that we build an AI and digitally confident nation helping to improve our productivity and competitiveness,” Phil Smith, chair of Skills England, said.

“While a huge variety of AI technology is becoming available, our report shows that too many employers are currently struggling to reap the benefits.

“The new tools will help employers and training providers map skills needs and make sure the right training is in place. They will be particularly useful to SMEs – who are vital to unlocking AI growth potential but typically won’t have big HR and staff training teams to get to grips with the problem.