Kier's secret sauce to growth

 Whilst incompetent Rachel hangs onto her job, Kier is trying to distract us from her disastrous management of the economy by claiming he has the secret sauce to solve all the UK's woes. 

What could it possibly be? Well it's AI (Artificial Intelligence).

He thinks AI will supercharge the UK economy and create growth. Companies who can see benefits from AI are already doing it and he can't force companies to use AI so he probably intends AI to improve government  productivity which is sadly dire.

So let's just look at the facts:

1/  The main companies behind AI are based in the USA or China.  Unless Rachel was doing a deal with the Chinese then I suspect Kier will be using USA based AI companies.  I would have concerns over Chinese AI running the UK.

2/ The cost of creating AI is huge (we are seeing the emergence of LLM (Large Language Models) as the way to access AI).

3/ AI is power hungry.  It is forecast to use the equivalent electricity to the whole of Japan by 2026/27

So in summary:

- Kier will be using other country's AI technology - not British AI.  This technology will be available to most countries and therefore if all countries adopt it, there will not be any incremental growth

- Britain has very high energy costs.  Our energy is almost as expensive as Germany (which decided to turn all it's nuclear off and be dependent on Russian gas).  If these AI systems do happen to be based in the UK, they will be more expensive to run than systems based in low price countries like Saudi, USA etc.

A key reason why the UK is so unproductive is the size of the state.  Government employs (directly and indirectly) 51% of the working population.   54% of the population (not workers) get more out of the state than they put in over their lifetime.  The few people who do generate wealth for the UK economy are taxed the highest.

Maybe Kier realises this and plans to shrink the size of the state by getting AI to do all the "valuable" admin work that all these millions of government employees are doing.  Or maybe AI can generate reams of more regulations, rules and bureaucracy quicker to stop the few people who are generating wealth from actually doing anything?  Maybe the AI can issue fines and penalties quicker?

The reality is we need to sack millions of unproductive government employees.  Could AI be the answer to do this (assuming the "work" these people do is actually of any value). 

However my experience of business cases is rarely when technology is introduced, does it improve productivity.  Does anyone actually lose their job?  What tends to happen is it raises costs and no-one loses their job. 

I challenge Kier to promise to sack workers and their work will be replaced by AI.  It won't happen - the unions will say it's unfair. AI will be introduced - the workers will say they have AI experience and they deserve a pay rise as they are AI skilled.  Net result higher state spending and no increase in productivity.

If the work the AI is doing is important then it is critically important that a risk assessment is done - what if the Americans, Chinese or whoever is the AI supplier decides to turn off the AI on a whim - a bit like TikTok - suddenly the UK is exposed to this.  For example if AI does all cancer cell screening and it's turned off then suddenly the UK is very vulnerable when no humans  no longer know how to screen for cancer manually.

Welcome to the Brave New World....