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Half of London's businesses say their workforce does not currently have all the skills they need in the age of artificial intelligence, according to a survey of more than 2,000 business leaders.
The poll, conducted by Survation for the business group BusinessLDN and reported by BBC London, found that 50% of firms believed their existing workforce had the skills and capabilities they needed, down from 63% a year earlier. The proportion of firms reporting significant skills and capacity gaps rose to 15%, up from 4% the previous year and the highest in the annual survey's history. A further 35% reported some skills and capacity gaps.
AI in widespread use
Three-quarters of the businesses surveyed said they were already using AI in some form, and only 5% said they had no plans to use it. A further 12% said they planned to adopt it and 8% were investigating its use. Among firms already using AI, 85% said it had changed the skills their workforce needed, reporting a greater need for critical thinking, ethical reasoning and decision-making.
Where the gaps are
Of the firms reporting gaps, 60% said they lacked advanced digital skills and 23% reported shortages in basic digital skills. Some 78% said they expected a significant need for advanced digital skills over the next two to five years, up from 66% a year earlier and 56% in 2023.
Training and jobs
A record 81% of firms said they planned to increase investment in training over the coming year, up from 80% in the previous survey and 69% in 2023. On hiring, 83% said they currently had vacancies, although the proportion struggling to fill roles had fallen to 32%, down from 46% a year earlier and the lowest since the survey began.
One in five firms (20%) said they planned to reduce staff numbers, while 76% did not expect to cut headcount. Among those planning cuts, 25% cited cost-cutting, 24% reduced demand for entry-level staff because of AI, 23% reduced demand for mid-career staff, and 14% the economic climate or changes to their business model.
Reaction
Mark Hilton, policy delivery director for people and skills at BusinessLDN, said London businesses were embracing AI but that many were "finding it challenging to stay on top of their workforce skills needs given the pace of change." He said employers were responding by increasing training investment, but added that "to properly close skills gaps it is essential we have a more agile skills system that is responsive to these rapidly changing needs."
The survey was carried out between 25 November 2025 and 15 January 2026. The findings follow Office for National Statistics figures showing London had the highest regional unemployment rate in the UK, at 6.6% for the period February to April 2026.
Sources
- "Half of London firms report skills gap amid AI boom", James W Kelly, BBC News (BBC London). Source of the survey figures and the Mark Hilton quotation.
- BusinessLDN, the business group that commissioned the survey (conducted by Survation, 2,043 business leaders, fieldwork 25 November 2025 to 15 January 2026).
- Regional labour market statistics in the UK: June 2026, Office for National Statistics, 18 June 2026. Source of the London unemployment figure.