AI adoption in UK accounting could add £2bn to economy, create 20,000 jobs
A new study reveals that widespread adoption of artificial intelligence (AI) in UK accounting practices could significantly boost the nation’s economy, adding £2 billion to GDP and creating nearly 20,000 jobs.
The research, conducted by accounting technology leader Sage in collaboration with cross-party think tank Demos, highlights the transformative potential of AI in the accounting sector.
Released on July 23, 2024, the study shows that accountants and bookkeepers are emerging as AI trailblazers, adopting the technology faster than other sectors. The findings come at a crucial time as the UK government seeks ways to drive economic growth through technological innovation.
Key findings from the research include:
- AI-enabled accounting practices expect to hire ten times more employees than non-AI users
- These practices anticipate tripling their revenue growth compared to non-users
- AI adoption could boost UK exports by £238 million
- 61% of accountants believe AI will create more opportunities than risks
“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,” says Aaron Harris, Chief Technology Officer of Sage.
To unlock this potential, Sage, Demos, and the Association of Chartered Certified Accountants (ACCA) are calling on the UK government to implement four key policy initiatives:
- Invest in AI skills through an expanded AI Skills Fund and reformed Apprenticeship Levy
- Extend full expensing of capital investment to digital technology
- Introduce e-invoicing to support Making Tax Digital
- Establish a supportive regulatory framework for AI use in accounting
“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,” says Andrew O’Brien, Director of Policy and Impact at Demos.
The accounting industry, which currently contributes £33.3 billion to GDP and employs 323,000 people, could see significant growth through AI adoption. The Department for Science, Innovation and Technology has highlighted the need for greater tech and AI adoption, and this research indicates that AI adoption in accounting could double in the next five years.
Industry professionals are optimistic about the changes AI could bring. George Moss, Practice Manager at Bee Motion, an accountancy practice in Stockton, said: “AI will transform our roles from number crunchers to business coaches. In the future, I imagine accounting firms buzzing with human interaction, where technology takes care of the mundane tasks and frees up time to engage more with clients and advise on business growth.”
While some concerns exist about AI replacing jobs, the research suggests that it will create new opportunities and potentially improve work-life balance. “I’m looking forward to closing the office door and not waiting for a holiday to spend time with my children, read a book or go for a walk,” said Caroline Armstrong, Founder of Infinitas Accounting in Northamptonshire.
As the UK accounting industry stands on the brink of an AI-driven transformation, the potential for economic growth and job creation is significant. However, realizing these benefits will require coordinated efforts from government, industry leaders, and educational institutions to ensure the workforce is prepared for this technological shift.
