UK businesses optimistic on growth, investing in AI tech

The recent Capgemini report titled "Navigating Uncertainty with Confidence – Investment Priorities for 2025" unveils the investment strategies of business leaders from 17 countries, covering nine industries, reflecting significant optimism amongst UK businesses despite ongoing global unpredictability.

The report highlights that 60% of UK businesses feel optimistic about their growth prospects for 2025, with 63% planning a boost in investment efforts this year. Nonetheless, concern persists about trade tariffs and trade wars, with 65% of UK executives expressing apprehension over potential impacts.

Talent shortage and requisite skills emerge as primary investment priorities for UK businesses. A majority, 61%, of business leaders recognise that a lack of technology skills significantly undermines their competitive edge, prompting a planned 13% increase in talent investment next year.

In response to fears of trade wars and economic instability, nearly 80% of UK businesses are de-risking their supply chains, opting to invest in emerging countries to lessen reliance on China. Concurrently, 63% are engaging in "friendshoring," relocating sourcing and production to allied nations.

UK businesses are also significantly enhancing their sustainability investments. Companies are prioritising climate technologies, sustainable research and development, biodiversity, and water conservation, with batteries (50%) and solar energy (50%) leading their agendas, followed by nuclear energy (39%), hydrogen (34%), and wind energy (34%).

Generative AI is noted as the foremost technology investment priority for 80% of UK businesses. Following AI, cloud technology (41%), data analytics (33%), and cybersecurity (30%) are key areas marked for increased investment.

Aiman Ezzat, Chief Executive Officer at Capgemini, remarked, "As we look to 2025, business leaders are navigating uncertainty with an attitude of confidence and resilience – two qualities that our research shows they are looking to instil in their organizations through technology investment. Technology has a key role to play to improve competitiveness and productivity, while reducing costs and making all-important efficiency gains. With a focus on innovation, supply chains and sustainability – which is increasingly being harnessed for its value-driving potential – leaders will set themselves up to succeed in an uncertain environment and build resilient, adaptable organizations. Crucially, this will help shape a more innovative, sustainable and inclusive global economy."

Amidst a focus on customer experience, innovation, and smarter supply chains, 62% of executives are planning to increase sustainability-oriented budgets by an average of 10.5%, capitalising on climate technologies like hydrogen and renewables. Batteries remain pivotal, particularly within manufacturing and automotive sectors, with solar energy closely following in terms of investment priority.

Globally, 70% of executives express concern regarding tariff impacts and bilateral trade disputes, with a majority voicing worries over potential trade wars. As a result, many organisations are de-risking supply chains by investing in emerging markets and confirming friendshoring as a central strategy for 2025. This strategic shift sees a rise from less than half of organisations implementing these changes last year to nearly three-quarters currently doing so.

In technology investment, US organisations are expected to lead in acceleration, with a notable emphasis on AI and generative AI, hinting at a competitive edge over European counterparts. This focus is in line with Capgemini's findings, which project significant tech investment growth, especially in the AI sector.