01 Foreword from Cindy Rose 03 Executive summary07 Chapter 1: The state of AI in the UK11Chapter 2: Embrace AI’s potential or risk being left behind 21Chapter 3: It’s not what AI can do but what it should do 33Chapter 4: Developing tomorrow’s skills, today 43 Conclusion 47 Industry spotlight 63 Appendix Contents 02A rtifcial Intelligence is becoming anever more important part of ourlives. Many of us are already familiarwith its everyday applications, such asdecluttering our inboxes with spamflters or receiving personalised shoppingrecommendations. Yet, whether it ispowering a new generation of self-drivingcars, guarding us against fraud or helpingdoctors better diagnose health conditions,AI’s transformational abilities are beingfelt in increasingly ubiquitous andinnovative ways. Nor does the impact of AI begin andend with our everyday experiences – it isreshaping organisations and industriestoo. Lengthy, complex, process-driventasks that once took hours can now beperformed almost instantaneously. Vastdata sets can be collected, analysed, andacted upon within minutes. Colleaguesin multi-national organisations cancommunicate using natural languageprocessing to translate conversationsacross multiple languages in real time.And customer experiences can bestreamlined and digitised across a widevariety of sectors. But amidst all this opportunity lies greatresponsibility. Only by applying AI in theright way can we unlock its extraordinarypotential for good. Given the state ofgeopolitics, as well as the mercurial natureof the global economy, it is especiallyvital that such technology is designed,developed, and deployed in ways that arethoughtful and responsible. Fortunately, the UK has long prideditself on ethically grounded innovation.Historically, from Ada Lovelace to AlanTuring, this nation has produced someof the world’s most progressive scientistsand thinkers. Fast forward to today andwe remain home to an internationally- renowned academic research sector,as well as some of the planet’s mostinnovative companies. Add to that theGovernment’s recent commitment toinvest nearly 1 billion as part of its AISector Deal, and the UK is perfectly placedto become a global leader in AI. But success tomorrow requires actiontoday. Our research reveals that two in fveof the UK’s business leaders believe theircurrent business model will cease to exist infve years’ time. Yet fewer than half of theUK organisations we spoke to have an AIstrategy in place.Any organisation still unconvinced aboutthe need to change and translate thatawareness into action need look no furtherthan one of the headline fndings of thisreport. Namely, organisations who areinvesting in AI are already signifcantlyoutperforming those who are not.Meanwhile, organisations that are backingup technological investment with clearethical guidelines and commitmentsaround their use of AI are performingbetter still.But successful AI-led digital transformationrequires us to look beyond the technologyitself – another key theme of this report.At Microsoft, we talk about putting peopleat the heart of our technology and it isour frm belief that adopting this human- centric approach can help organisationsof all shapes, sizes, and sectors useAI to positively impact their business,employees, and customers alike. Often, a good place to start the journeytowards unlocking the power of AI is withasking questions. Questions like whatare the business problems we want tosolve – and how can AI help What are theopportunities we are missing Is our dataready Are our people ready And, if not,how can we re-skill and re-train them sothat technology augments their role ratherthan simply automates itThis last point is especially important.Indeed, we uncover a growing gapbetween the number of employees callingfor support in developing the skills to workwith AI and the number of organisationsactually providing it.Throughout the pages that follow, youwill fnd practical guidance from variousindustry experts to help you begin, orindeed continue, your organisation’sown AI journey – from building an AIplan and preparing staff, to selecting andimplementing the right solutions for you.You can also contact us or one of ourpartners for further assistance. At Microsoft, our mission is to empowerevery person and every organisation onthe planet to achieve more. In the case ofAI, that means helping UK organisationsharness its potential both successfully andresponsibly. Wherever you are along thatpath, we hope you fnd this report valuablein guiding the way ahead. Cindy RoseCEO, Microsoft UK 01Foreword Cindy RoseCEO, Microsoft UK 0304I n 2017, our report ‘Creating A Cultureof Digital Transformation’ providedunprecedented insight into the challengesand opportunities facing UK organisationsas they seek to evolve in line with rapidlyadvancing digital technologies. Fromadopting an agile mindset to embracingfear of change, we explored what ittakes to create a true culture of digitaltransformation in the modern workplace. With the fndings of that report in mind,this year we take an in-depth look at oneof the key technologies powering thattransformation: Artifcial Intelligence (AI),which we defne as a set of technologiesthat enable computers to perceive, learn,reason, and assist in decision-making tosolve problems in ways that are similarto humans.In particular, we ask what the proliferationand acceleration of AI means fororganisations across a variety ofsectors, and how they can use it tooptimise operations, engage customers,transform products, and empoweremployees in a way that is both effectiveand responsible. Before embarking on the study, weconducted an extensive literature review,drawing upon a wide range of respectedresearch, behavioural models, andreports. These included Microsoft’s ‘TheFuture Computed: Artifcial Intelligenceand its role in society’, The House ofLords’ April 2018 report ‘AI in the UK:ready, willing and able’, and the 2017PWC report ‘The economic impact ofartifcial intelligence on the UK economy’.From there, we were able to develop ourown conceptual model detailing the fvekey dimensions of the AI Opportunity:technology; people; culture; ethics;and impact. (See Figure 1). These fvedimensions are interconnected andmust be addressed symbiotically by anyorganisation hoping to develop the rightAI strategy for itself and its stakeholders. The dimensions also provide the frameworkfor this report. Through a combinationof interviews with industry experts acrossthe worlds of business, academia, andgovernment, along with an extensivebarometer survey of 1,002 leaders and4,020 employees, we use them as a lensthrough which to examine how successfullyUK organisations are integrating AI intotheir working practices. Or, to put it in awider context of organisational change,their readiness to take the next step ontheir own digital transformation journey.(See Figure 2). 0304 Figure 1. The fve dimensions of the AI opportunity Within our model of the AI opportunity, each of the fve dimensions work symbiotically, with people placed at the centre. Technology Impact People Culture EthicsExecutivesummary 。。。。。。