New data suggests that UK manufacturers are increasing investments in AI – but a significant gap in knowledge and application may undermine efforts to enhance productivity and global competitiveness. According to the report “Future Factories Powered by AI” published by Make UK and Autodesk, only 16% of manufacturers consider themselves knowledgeable about AI, with just 7% describing their expertise as “very knowledgeable.” Despite this, 75% of manufacturers intend to increase AI spending within the next year, raising concerns about whether the investments will translate into tangible gains.
The findings are based on a survey conducted between July and August 2024, involving 151 manufacturers. Additional insights were drawn from members of the Technology, Innovation, and Digitalisation Policy Committee, offering a detailed view of the sector’s adoption of AI and digital technologies.
“AI and automation are driving dramatic change in speeding up manufacturing processes and elsewhere in companies. Their potential to drive economic growth and reshape industries is becoming increasingly clear, and the manufacturing sector and its factories of the future have a central role to play,” said Make UK’s policy director Verity Davidge. “However, while the uptake of such technologies is increasing, the UK needs a step change in the use of automation otherwise it risks missing out on vital transformative productivity gains.”
AI adoption remains inconsistent across operations
‘Future Factories Powered by AI’ highlights that, while AI adoption by manufacturers is growing, it remains inconsistent across the industry. Only a third of manufacturers actively deploy AI tools within production processes, with many limited to experimental or supplementary applications. For instance, 44% of businesses use AI for production line automation, while 43% apply it for predictive maintenance. Fewer companies (37%) use AI to integrate new technologies with legacy machinery or connect systems across multiple sites. AI use for product design and development remains particularly low, with just 13% of businesses incorporating it.
Barriers to AI adoption are substantial. The most cited challenges include systems integration issues (44%), high costs (44%), and technical complexity (39%). Cybersecurity concerns (35%) and a lack of skilled personnel add to these difficulties. Additionally, only 26% of manufacturers are using AI to decarbonise operations, despite the technology’s proven ability to optimise energy use, reduce waste, and monitor environmental impact.
Nevertheless, manufacturers already leveraging AI report significant benefits. Nearly 69% cite improved operational efficiency, while 61% note increased productivity. Other gains include enhanced sustainability through reduced resource waste and improved supply chain optimisation. Manufacturers also credit AI with enabling higher output without proportional increases in labour or resource input.
The report underscores the broader economic potential of AI adoption in manufacturing. With the sector contributing 47% of all private research and development (R&D) spending in the UK, expanding its GDP share from 10% to 15% could add £142bn to the economy. Furthermore, AI is projected to contribute $1 trillion to the UK economy by 2035, but only if its adoption accelerates.
The study also sheds light on manufacturers’ digital transformation journeys. While 52% of companies are in the “evolution” stage, integrating digital tools and starting to implement AI, just 9% have reached the “revolution” stage, where these technologies fundamentally reshape business operations. A further 30% remain in the “conception” phase, exploring but not yet committing to digital transformation.
To overcome these challenges, the report advocates for targeted government policies, including financial incentives, regulatory frameworks, and support for innovation hubs. It also calls for industry-wide efforts to close the skills gap through training and peer-to-peer learning, as well as partnerships with technology providers to ease the transition to AI-driven operations.
Without addressing these obstacles, the report warns, the UK manufacturing sector risks falling behind its global counterparts in automation, robot density, and digital innovation.
“Taking advantage of new technologies isn’t a one-off investment and the silver bullet for change,” said Autodesk’s data and process management vice president Srinath Jonnalagadda. “A continued and concerted effort will be needed to achieve the industry transformation and workforce with the skills and capacity required to take advantage of new technology, allowing UK industry to emerge as a global leader in AI-driven innovation, setting the new standard for manufacturing excellence.”
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