There may be an ambitious strategy afoot to ‘turbocharge growth and boost living standards’ in the UK thanks to the government’s ambitious AI action plan unveiled earlier this week, but leaders across the North are frustrated by one key thing. There’s no mention of the North.
All 50 recommendations from the AI Opportunities Action Plan, compiled by tech entrepreneur Matt Clifford, were endorsed by Keir Starmer, who says the technology will generate “more jobs and investment” in the UK and “transform” public services by bolstering the nation’s AI capabilities.
But for all the rhetoric there is a distinct lack of detail that has left leaders across the region a little sceptical. According to the announcement £14bn in investment for AI infrastructure and around 13,250 jobs could be created across the UK as the result of a commitment from three major tech companies – Vantage Data Centres, Nscale and Kyndryl – on top of £25bn in AI investment already announced at the International Investment Summit in 2024 by the government.
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Over in the Liverpool City Region there is a glimmer of Northern involvement as Kyndryl, an American tech infrastructure services provider, plans to create up to 1,000 AI-related jobs over the next three years at a new tech hub. Metro Mayor Steve Rotheram hailed the news, saying it would be “hugely beneficial” to the area.
Amid plenty of key national changes in the plan from the creation of new AI ‘Growth Zones’ to speed up planning proposals and build more AI infrastructure, the first being in Culham in Oxfordshire, to a dedicated AI Energy Council and the development of a new National Data Library, what does the plan actually mean for people in the North and is the job figure even realistic as fears over the way AI could shakeup our workforce in future loom?
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We spoke to a number of experts across the North to unpack the good and bad bits of the plan and what it might mean for the region.
Richard Potter, CEO at Manchester-founded AI company Peak, says the government’s AI Action Plan is a “positive step” that recognises the potential of AI to drive economic growth.
“The UK already has the talent, expertise and innovative companies needed to become a global AI powerhouse. What we need now is active government support to turn homegrown businesses into the AI leaders of the future,” Potter tells Prolific North.
But the plan “lacks focus” on start-ups and scale-ups in the UK: “It’s vital that the government prioritises nurturing these businesses, not just creating a stronger market for large, established global players.
“What I’d really like to see is improved structural incentives for start-ups, access to capital – including fixing UK capital markets – and the government making commitments to buy from the UK tech sector.”
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While there is plenty of ambition in the plan, Dr Richard Whittle, University Fellow at the University of Salford’s Business School, argues the UK is still playing catch-up in the AI race.
“My main criticism of the plan is simple, the government hopes that it will be more than the sum of its parts to generate economic growth, and I don’t see mechanisms to make this happen. Certainly, there is little consideration of inclusive growth, the rewards from AI can be vast and they will be realised from public data and investment. They should be shared evenly.
“If I were being cynical, I’d be cautious of the plan and its timing, the government clearly hope it will be a shot in the arm for a flatlining economy. This plan is the vision accompanying the October 24 budget.
“Whilst I think the plan is full of ‘good bits’, these really are only the foundations – appropriate and necessary as they are – for AI driven growth and ideally we’d have seen them being developed years ago. The UK is playing catch up here, this plan gives us a bit more energy but doesn’t finish the race.”
AI Growth Zones – where is the North?
On the news that ‘AI Growth Zones’ will be dotted across the UK, despite the North being home to a thriving network of tech ecosystems, the region barely gets a mention in the initial announcement.
“This absence reflects a missed opportunity to leverage regional strengths and ensure that the benefits of AI growth are distributed across the country. The government needs meaningful action to address foundational challenges like funding, talent development, and regional inclusivity,” says Richard Potter.
“The North is becoming a tech powerhouse in the UK, but we now need the government to actively encourage and support Northern companies.”
The AI Action Plan shouldn’t forget the North, argues Allan Kaye, managing director of data centre infrastructure specialists Vesper Technologies, which opened its groundbreaking AI lab at the end of last year in Stockport.
Aside from the first ‘AI Growth Zone’ set to be based in Oxfordshire, more are set to be announced in the summer but there’s been no indication yet about any proposed for the North.
“It’s exciting to hear the government unveiling plans for new AI Growth Zones, I’d hope to see these opportunities spread across the country. From the Kao data centre in Stockport, to Durham’s supercomputer ambitions, the North is ready to grasp the opportunity! It has the skills base, the expertise, and the drive to carry the torch for Britain’s AI ambitions,” says Kaye.
“Large firms will play a key role in this Action Plan, but so will SMEs, scale-ups, and academic spin-outs that are innovating at the cutting-edge. We would love to see AI Growth Zones that enable that collaboration and allow organisations of all sizes to participate in and support this programme.”
For Dr Iain Brown, head of data science at solutions firm SAS UK & Ireland, the AI Cities Index 2024 named Manchester the most AI-ready city in the UK and home to the most AI-related companies outside of London.
The North has the potential to become a “powerhouse for AI innovation”, thanks to its network of universities, research hubs, and expanding tech ecosystems.
“With the right investment and collaboration, cities like Manchester, Leeds, Liverpool, and Newcastle could position themselves as leaders in specialised AI applications, such as health tech, public services, and industrial automation,” he explains.
“For AI Growth Zones to succeed in the North, they need tailored support that aligns with regional expertise. Leeds, for example, with its established healthcare innovation ecosystem, is well-suited to become a leader in health tech AI. However, reliable digital infrastructure and access to supercomputing resources must also be prioritised to attract businesses and researchers who rely on high-performance computing capabilities.”
Going forwards, Dr Whittle says more detail is needed about the AI Growth Zones as various investment zones are already in place across the North.
“How will these link together? I get the feeling that the idea is to use AI zones to more equally distribute AI development. However, moving skills around the North is really difficult without details of accompanying transport and housing strategies. Ultimately the infrastructures – such as connectivity and skills – that need to be in place in the North to harness this plan are not there.”
Will the AI plan keep or kill jobs in the North?
The plan could lead to thousands of jobs being created, but is the talent in place across the North and what type of roles will be created?
“The two biggest issues caused by Brexit for UK start-ups and AI companies are complicated trade rules caused by exiting the free trade zone and free movement of labour. The government needs to look for solutions quickly.
“At this current time, it’s unclear what roles will be created. For AI companies, we need capital, skills and structural help in building our businesses. Improvements to the items above will help us meaningfully and benefit our AI economy in turn,” explains Richard Potter.
“We are a brilliant place to build a business and we can build a significant AI ecosystem. Amazing talent, world class universities. We also have a huge cachet as Britain which attracts talent and investment. We need to champion Britain and be positive. And the government can really help with this.”
Over in Sheffield, Ben Foster who leads The SEO Works, says talent is the biggest challenge.
“The UK has a shortage of generative AI experts with concrete, real-world business experience. Individuals who are not just theoretical, but actively implementing these technologies with positive outcomes are key to help knowledge share. The training plan is part of this, but the government needs elite pioneers to drive this forwards,” he explains.
There’s another pressing issue. Dr Whittle points to the government’s findings in 2023, which uncovered a digital skills gap with 18% of UK adults lacking the essential digital skills needed for the workplace, while 46% of businesses struggle to recruit people with ‘hard data skills’ such as data analysis and computer programming.
“For the plan to succeed, investment will require waves of secure highly skilled labour with each successive wave being more highly skilled than the next. There will be an alignment problem where investment will want to follow skills and skills will likely only be developed once investment is in place,” says Dr Whittle.
“The UK economy lacks digital skills. The government estimated in 2022 that the digital skills gap costs the UK economy as much as £63bn a year in potential GDP. This is a significant gap that the PM’s plan acknowledges but underfunds a solution too.”
AI might be a powerful tool that could “help grow our economy, make our public services more efficient and open up new opportunities”, according to the Chancellor of the Exchequer Rachel Reeves, but could the thousands of newly created roles also lead to jobs losses too?
“I’m generally optimistic about the role of AI, especially in the NHS where resources are so stretched anyway. It should help people to be more effective in their role, whilst removing some of the repetitive and laborious elements. Imagine more time with your doctor, rather than a rushed 10 minute appointment! But make no mistake – this is an industrial revolution. And as with any step change there may be some changes to roles and some jobs will go, but on the flip side others will be created,” says Ben Foster.
Dr Whittle warns that there is a “potential” for job loss.
“With any technological disruption we would expect to see some labour replacement and some job creation. The aim of the plan however is to use AI to complement labour, with the ambition that AI and human is more productive than just AI or just human.
“I suspect this will not be that neat and there is a strong possibility that cheap and done AI outputs may be preferred to better, more expensive AI plus human ones. Will ok and free be preferred to good and expensive? In the short-term though, much of the PM’s plan seeks to shore up large areas of the public sector, I’d expect job replacement here to be quite minimal over the near future as AI is used to plug existing service gaps.”
Although AI will “undoubtedly” create opportunities for highly skilled roles in areas such as machine learning, data science and AI governance, Dr Iain Brown says it’s crucial to acknowledge that automation “could reshape existing roles”, particularly those in industries reliant on repetitive admin tasks.
“Rather than focusing on job displacement, the conversation should centre on job evolution. History shows that technological innovation often leads to the creation of roles we couldn’t have previously imagined. For example, SAS has seen firsthand how AI tools can free up valuable time for employees in healthcare and government sectors, allowing them to focus on more impactful work rather than manual data processing.
“The key to mitigating job losses lies in reskilling and upskilling. By investing in AI literacy and digital skills, the workforce can transition into roles where human judgment, creativity, and oversight remain indispensable. The government’s focus on training and education in the AI action plan is encouraging, but partnerships with industry leaders, universities, and local authorities will be essential to make this a reality.”