UK businesses deprioritise artificial intelligence amid economic uncertainties

In a notable shift in business priorities within the UK, corporate leaders appear to be deprioritising artificial intelligence as a key driver of growth amidst current economic uncertainties. This trend emerges from the findings of a comprehensive report titled “Navigating a New Era for the Non-Executive Director,” a collaborative effort between executive search firm Norman Broadbent and BDO, an audit and advisory services provider.

The report, which encompasses insights from 200 board directors, explores the evolving responsibilities of non-executive directors (NEDs) in modern business environments. Traditionally, strategic organisational leadership was primarily the domain of executive board members. However, the report reveals that non-executives are increasingly integral to the day-to-day operations, significantly interacting with stakeholders such as shareholders and regulatory bodies.

According to Shrenik Parekh, a director at BDO, non-executive directors are now anticipated to contribute more substantially to the long-term success of their organisations. This involves not only strategic input but also active stakeholder engagement.

While many reports in the past two years suggested an optimistic business outlook buoyed by advancements in AI, this sentiment seems to have cooled. The initial excitement, largely driven by technologies like the public release of ChatGPT, envisioned AI as a tool to revolutionise operations by automating costly, repetitive tasks and enhancing data analytics capabilities. Despite this enthusiasm, tangible benefits from AI investments have yet to manifest substantially. Consequently, organisations are realigning their focus towards immediate business concerns.

Businesses are now prioritising economic adaptability, which 19% of executives identified as a primary concern, along with talent acquisition (16%), and maintaining investment streams (12%). Other significant priorities include regulatory compliance, geopolitical issues, and operational risks, with cyber security also featuring marginally above AI in terms of attention, though it only ranks as a top three issue for 8% of executives. In a telling indicator of AI’s diminished importance, a mere 4% of business leaders consider it a priority.

Interestingly, the report suggests a potential gap in non-executive expertise may contribute to this strategic shift. Issues like cybersecurity and environmental, social, and corporate governance (ESG), while currently undervalued, feature prominently in board education plans for the upcoming year (both at 11%). Boards planning to educate members about AI, however, are limited, with only 7% indicating it as an area of future focus, indicating its declining prioritisation compared to other emerging risks.

This data suggests that, despite the transformative promise of AI, UK executives are opting to address more immediate operational challenges, aligning resources and expertise towards stabilising and securing their current business environment. This shift in strategy reflects a broader trend of conservatism within business strategy, as firms navigate the complexities of an uncertain economic landscape.

Source: Noah Wire Services