UK businesses face barriers to AI innovation, new report reveals

A newly released research report, "The Innovation Race: Reducing Risk and Navigating the AI Frontier for Future Success," has highlighted the challenges and trends affecting business innovation in the UK. The report was commissioned by Pure Storage and conducted by independent research firm Vanson Bourne. It includes insights from C-level executives and senior IT decision-makers across the UK and forms part of a larger global survey.

The report underscores that artificial intelligence (AI) has emerged as a pivotal technology for UK businesses. A significant number of UK IT leaders, 91%, identify AI as an opportunity for enhancing their organisations. Notably, 42% of businesses in the UK are already adopting or planning to adopt an AI-first strategy, where AI is considered for every new use case. The major perceived benefits of AI include improving efficiencies (53%), personalising customer experiences (49%), and enhancing decision-making through customer data analysis (45%).

Despite these promising outlooks, UK businesses face substantial barriers to leveraging AI effectively. Infrastructure limitations are a significant concern, with 88% of business leaders predicting that their AI-generated data will soon exceed their current data centre capacities. Moreover, 78% worry that their infrastructure cannot keep pace with AI demands. These concerns are accentuated by the fact that almost half of IT budgets and 53% of IT department time are expected to be dedicated to AI initiatives in the coming year.

The report also draws attention to the impact of economic pressures on innovation. As the cost of living continues to rise, 34% of UK businesses cite technology debt as a formidable challenge. Furthermore, a third of UK firms consider rising energy costs a threat to their innovation capabilities—a concern more keenly felt in the UK compared to other regions. In this context, 56% of IT teams are mainly focused on maintaining basic operations, the highest percentage reported globally, showcasing the struggle to sustain innovation momentum.

Adding to these difficulties is the alarming tech talent shortage in the UK. Thirty-seven per cent of respondents see this shortage as a critical risk to their innovation efforts. This scarcity of skilled professionals is compounded by a decline in computing education and a global AI skills gap, exacerbating the innovation impasse.

Cybersecurity also remains a significant concern for UK IT leaders. Nearly 49% regard cyber attacks as the primary threat to business innovation. A substantial 87% believe that the extensive budgets and time allotted to cyber defence could be more effectively used to foster innovation. The necessity for comprehensive pre-, during-, and post-attack plans, as well as a simplified IT estate, is underscored to mitigate these cybersecurity challenges, thereby freeing resources for other innovative pursuits.

Wes van den Berg, Regional Vice President for the UK and Ireland at Pure Storage, remarked, "Plagued with concerns about their infrastructure’s ability to support AI, UK IT leaders fear losing the Innovation Race. This research aims to help them understand all the risks to their organisation beyond the obvious cyber threats, enabling them to prioritise and strike a balance between security and innovation. Addressing rising energy costs and assessing AI readiness with a hybrid infrastructure approach can significantly benefit their efforts to harness AI for future success."

Archana Venkatraman, Senior Director for Research at IDC, added, "IDC research also shows that AI has tremendous potential, but only a fraction of PoCs are translated to production use cases today in the UK. Concerns around the infrastructure-readiness, the tech skills shortage, high cost, and sophisticated cyber threats are all impacting businesses’ ability to innovate. UK CIOs that are able to focus on long-term strategies and align technology investment to overcome the limiting factors are the ones that can build sustainable competitive advantage for their organisations."

The comprehensive insights provided by the report reveal the multifaceted challenges UK businesses face in driving innovation and adopting AI. The findings suggest that addressing the infrastructure, talent, and cybersecurity issues is crucial for UK businesses to leverage AI successfully and maintain their competitive edge.