UK leads Europe in AI investment with Gen AI boosts & big savings

The United Kingdom has emerged as the leading country in artificial intelligence (AI) investment in Europe, with a significant majority of organisations increasing their commitment to generative AI (Gen AI) in the past year, according to new research from the Capgemini Research Institute.

The study surveyed 1,607 senior executives across 15 countries, revealing that 74% of UK organisations have increased their investment in Gen AI over the last 12 months. The findings follow a series of business and government initiatives aimed at bolstering the country's AI infrastructure and startup landscape.

Adoption and impact

Capgemini's latest report, 'AI in action: How Gen AI and agentic AI redefine business operations,' found that organisations in the UK are increasingly seeing tangible returns on their AI investments. On average, surveyed organisations reported a 1.7 times return on investment (ROI) from both Gen AI and broader AI initiatives.

Among companies adopting Gen AI, around 30% have already integrated AI agents-also termed Agentic AI systems-into their core business operations. The report predicts the number of agentic AI projects will rise by 48% by the end of 2025, indicating a rapid acceleration in AI integration across business functions.

Of particular note is the impact on workforce composition. The research forecasts that by the financial year 2027-28, over half of the UK workforce-56%-will be working alongside AI agents, up from 30% today. As AI increasingly moves into mainstream business processes, this figure is expected to climb steadily, reflecting a transformation in the way UK organisations operate and deploy their personnel.

Operational efficiencies

The adoption of AI and Gen AI has already resulted in notable cost savings for large businesses in the UK, according to the report. Customer operations costs have seen a reduction of 40%, people operations costs have dropped by 26%, finance and accounting costs have been reduced by 24%, and supply chain and procurement costs have fallen by 21%.

The research highlights how embedding targeted AI capabilities into procurement, customer service, supply chain optimisation, and finance operations can support substantial cost efficiencies. Two in five organisations expect to achieve a positive return on their AI investments within one to three years, further underscoring the commercial value seen by early adopters.

Organisational transformation

According to Capgemini, the broader adoption of AI is not without its challenges. Some organisations initially expressed concerns about whether significant investments in AI infrastructure would deliver sufficient ROI. However, these apprehensions are easing as enterprises begin to experience substantial benefits.

"Gen AI and agentic AI can truly transform business services - enabling the shift from traditional cost-focused models towards an AI-enabled, value and insight driven business. Those that adopt an integrated approach with data and AI at its core will be set to achieve a truly connected, frictionless enterprise," said Oliver Pfeil, CEO of Business Services at Capgemini and Member of the Group Executive Committee. "While the research suggests increased adoption of AI agents, organizations still face numerous barriers to implementation at scale. Adopting a pragmatic approach, fostering trust in AI, and creating a strong data foundation will go a long way in transforming business services into a strategic powerhouse to fuel any enterprise."

The report underlines that Gen AI adoption is laying the groundwork for increased agentic AI implementation across business functions, with benefits recorded in error reduction, improved customer satisfaction, greater operational efficiency, and lower operational costs. Leading sectors for AI agent adoption include high tech, industrial manufacturing, consumer products, energy and utilities, as well as pharmaceuticals and healthcare.

Leadership and workforce development

Capgemini's research points to the importance of strong leadership, governance, and AI preparedness for achieving faster and more pronounced returns on Gen AI investments. Those organisations that establish robust governance frameworks can achieve ROI 45% faster, the report found. However, the survey also indicated that only one in three leaders currently acts as a strong advocate for Gen AI within their organisation.

Workforce transformation also features prominently. Enterprises that have introduced AI-based automation over the last two years report that 30% of their operational tasks are now automated, with expectations for further automation in the coming years. As roles evolve, upskilling, reskilling, and changes in job descriptions are expected, with almost two-thirds of employees anticipating their job roles to be altered by 2028.

The report states that employee interaction with AI agents is projected to increase substantially by 2028, requiring additional training to ensure effective human-AI collaboration and to help staff adapt to shifting responsibilities.

Survey methodology

The Capgemini Research Institute's survey focused on executives at organisations with global revenues of at least USD $1 billion in the last financial year. Respondents held accountability for AI and Gen AI initiatives in core business functions, ranging from AI application development to compliance. The data collected spanned 13 industries and included insights from 15 senior executives involved in AI implementation.

The findings highlight the pace of AI adoption within UK businesses and the resulting impact on both operational efficiencies and workforce dynamics as organisations continue to expand their use of generative and agentic AI technologies.