AI presents challenges and benefits for Devon businesses

This is either scary stuff or simply amazing and full of opportunities.

Devon has thousands of businesses (tourism, agriculture, health, pharmaceuticals, manufacturing and public services). 

Put simply, all these sectors are now encountering the effects of AI and automation. This can transform our productivity and help overcome pockets of deprivation, also the nagging concerns that we are still a remote economic community with poor communication. 

The threat, of course, is also equally real, which is that AI might compromise as much as 50 per cent of all our white-collar employment in as little as three to four years' time.

The scale of change is simply staggering and the speed truly awesome.

I am still trying to get my head around a recent report about quantum computing. It had always been thought that this would not really kick into our daily lives until around 2035 or later. Unfortunately,  no one checked in with Google, Amazon or Microsoft. They have been quietly cracking on. The results are way beyond my comprehension. Progress to date had been slowed because there was too much “noise” — computer language for errors in the system.

 The answer was to use quantum computers to fix the problems. So, in the last six months, huge advances have been made in the reliability of quantum “bits” which have been notoriously fragile. 

Google have just completed a task using their “Willow” machine which achieved in five minutes (yes, five minutes) computations which would have taken a classical supercomputer 10 septillion years, which is longer than the age of the universe (I am sure some clever person can work out how many zeros this is). 

IBM, not to be outdone, are just finishing off their Quantum “Starling”, a super- powerful quantum computer that will do 100 million operations with just 200 quantum bits in the next three years. Many now conjecture that AI machines are, or will shortly be, capable of independent thought (sentient). It is certainly no-longer possible to just unplug them.

The implications of this are profound. Just a few illustrations show what can be achieved. A non-invasive wearable brain scanner for detecting diseases such as Alzheimer's, more accurate breast cancer screening, replacement of GPS to make transport systems more accurate and an algorithm to reduce waiting lists for surgical operations. 

On the negative side, cyber security becomes an area of “colossal” risk, with almost all current encryption standards likely to fail. 

It is perhaps of some reassurance that the UK is good at this stuff and well positioned to capitalise on the acceleration of the technology as the home to the second largest group of quantum companies in the world, inevitably behind the US.

The problem for Devon is that we are missing out on the bulk of AI investment. The latest figures show that London and the South East alone attracted two-thirds of all UK tech investment. A report which studies this trend reveals that the North and Midlands will be likely to be the hardest hit by the disruptive effects of automation. 

It is reasonable to assume that we will fall into this same spiral unless actions are taken at a local level. The clear implication is that large urban conurbations will have sufficient combined resources and collective muscle power to be able to put together their own AI strategies, leaving behind rural and dispersed economies. Expecting the solution will come from Whitehall is for the birds.

Some hard facts are emerging which demonstrate the balance of risk and opportunity. A UK-wide study of 1,000 firms found that 78% said AI/robotics created new jobs, and 69% said job quality improved, 47% reported some job losses, yet 67% saw net job creation.

Similarly, an Institute for Public Policy Research report highlighted that 11% of tasks (and potentially 1.5 million jobs) are at direct displacement risk. 

However, a more alarmist forecast suggested up to 7.9 million could be affected without policy responses. Across the UK, 37% of workers use AI tools and 31% express concern about job displacement.

Translate this into our local businesses and we could start to predict that in manufacturing (aerospace, electronics), AI-driven predictive maintenance, robotics and supply chain tools could streamline operations but may displace lower-skilled roles. 

In public services our local authorities and healthcare are piloting AI for traffic safety, social care planning and administrative duties. In Devon, £1 million was allocated for AI-enabled cameras to improve road safety on the A361. In care and education, Devon care homes are exploring AI for personalised care planning and scheduling. In education, our academic bodies are offering AI tools training to boost employability. 

Perhaps a clearer understanding of where the benefits might arise could help. McKinsey & Co estimates that generative AI could save 100-plus hours per worker annually, with potential gains of 700,000 hours per year in UK education and healthcare. 

Devon's care sector, highway management and public services could see large efficiency improvements, freeing human capital for complex, creative or empathetic roles. AI is spawning demand for data analytics, AI maintenance, digital literacy and digital ethics roles, professionals expect to earn 14 to 60% more than their non-AI counterparts. 

UK job postings requiring AI skills have surged 21% since 2018, employers increasingly prioritie demonstrable AI skills over formal degrees.

AI complementary skills, such as teamwork, ethical judgment and digital literacy are in rising demand; one study found these complementarity effects exceed substitution by up to 50%. 

Generative AI enables small local enterprises (such as marketing or branding agencies) to produce competitive content efficiently. By lowering barriers to entry, AI will undoubtedly enable  Devon firms to reach national/international markets more easily. 

Getting ahead of the game to manage the risks is essential. Job displacement is a top concern. 

Routine administrative and repeat tasks, common in finance, customer service and certain public admin roles, are most vulnerable.  Public sector use, such as call centres and planning officer roles, already shows displacement, although work streams are often redefined rather than lost outright. 

Another early action is upskilling, currently a major hurdle, with around 60% of the workforce lacking basic digital training, thereby hindering AI integration.  

Reflecting the demands of our businesses is also a constant challenge. Too often, university AI programmes under-emphasise the mathematics, data science and digital disciplines much needed by employers. 

The purpose of this article is not to scare but to galvanise a call for local action. We are not starting from scratch on this. Lots of good things are happing but perhaps greater coordination would accelerate the process. If we accept that only local solutions are going to work then the strengthening of a public/private partnership approach would pool resources. 

My starter for ten on this could include the formation of an AI task force and that  Devon could seek AI growth zone designation. 

We must finish the job on broadband to ensure high-speed access to support AI hubs and remote work, scale up and diversify training by expanding Devon County Council’s AI workshops, target SMEs and public sector staff, and  also partner with universities for certificates in AI/data science.  

We should set challenging outcomes and establish evaluation such as tracked metrics for job creation and displacement, wage premiums and business profitability post-AI adoption.

 Devon stands at a pivotal crossroads. AI offers transformative potential, boosting productivity, creating new, higher-skilled roles and positioning the region as a model for tech-driven rural innovation. 

Yet challenges loom. The risks of job displacement  and deepening regional inequality if AI skills and infrastructure lag are real. 

As ever, this is the sort of exciting challenge we relish. With proactive measures, investments in training, infrastructure, partnerships and governance, we can shift from net AI beneficiary to adopting pioneer status.