Less than half of UK executives believe they have the digital skills and ability to lead their organisation in the digital economy, a new report has claimed.

The second edition of Deloitte's Digital Disruption Index also found that only 16 per cent of executives across UK businesses believe their teams have the capabilities to deliver their digital strategy.

This is despite a significant uptick in investment in emerging technologies over the past 12 months, with 41 per cent of organisations having invested in artificial intelligence.

The lack of confidence in their own digital skills comes as 40 per cent of those surveyed say they do not receive the support they need.

The report, which surveyed digital leaders from 106 organisations, also found that 49 per cent of executives plan to invest more than £10m in digital technologies and ways of working by 2020, while 35 per cent plan to invest more than £10m in 2018 alone.

"The pace of technological change is accelerating, however in the rush to keep up many organisations are yet to develop a coherent strategy for investing in digital technologies," said Claire Jolly, head of TMT in the North West.

"Therefore, efforts need to be made to align learning and development alongside strategy and investment. End-to-end digital transformation is not just about investing in advanced technology; it’s about changing the way you do business."

According to the report, the lack of confidence in digital leadership has not stopped businesses from embracing new technologies.

Two in five firms have invested in AI technology, up from one in five who said they had in 2017. Overall, 10 per cent have already invested more than £5m in AI technology, with 15 per cent planning to invest more than £5m in the coming year.

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By 2020, 82 per cent of executives plan to invest in AI, while 70 per cent plan to invest in robotic and cognitive automation and 57 per cent in blockchain.

However, less than one in four say that their leadership team has a clear understanding of the technology and how it will impact their business.

"Investment into AI has seen significant growth since 2017, with some organisations now moving into large-scale adoption," Jolly added.

"However, many leadership teams currently lack awareness of the technology and this could act as a significant barrier to the adoption and development of the technology. It also suggests a lack of preparedness among senior leadership for how AI will impact their workforce."

Jolly also stressed that the digital skills gap needs to be addressed urgently, as only 12 per cent of leaders believe UK school leavers and graduates have the right digital skills.

More than three-quarters are experiencing challenges in recruiting employees with the relevant digital skills, according to the report. Data scientists and analysts remain the most difficult roles to recruit and retain.

Jolly said: "There is still a digital skills gap that needs to be addressed. Digital is not just about technology. It is about what technology enables. It can fundamentally change how work gets done, how organisations interact with their customers and how decisions are made.

"To realise the potential of digital technologies and benefit from these, it is vital for businesses to join together and work closely with the education system to generate a steady stream of fresh talent."

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