Quick Read
- IFS Cloud 25R2 introduces agentic Digital Workers, aiming to multiply industrial workforce capacity tenfold.
- Industrial sectors face severe labor shortages; half the workforce may retire in five years.
- IFS Loops Digital Workers automate repetitive, low-value tasks, freeing experts for strategic work.
- Institute for Fiscal Studies (IFS) warns UK disposable income will grow only 0.5% annually for five years.
- IFS criticizes government budget for backloaded tax rises and spending cuts, calling it ‘fiscal fiction’.
Industrial AI: IFS Cloud 25R2 Transforms Workforce Capacity
November 2025 marks a pivotal moment for the industrial world. IFS, the global leader in Industrial AI, has released its latest platform update—IFS Cloud 25R2. This isn’t just another upgrade. It’s a bold promise: multiplying workforce capacity tenfold by embedding digital workers and applied industrial AI directly into the heart of mission-critical industries.
At the flagship event, Industrial X Unleashed, IFS showcased a hard truth: generic AI might impress in consumer tech, but it struggles in the gritty reality of factories, supply chains, and infrastructure. The industrial sector faces a crisis—millions of jobs unfilled, a wave of retirements on the horizon, and vast capital investments chasing efficiency. Against this backdrop, IFS Cloud 25R2 delivers “agentic” digital workers—intelligent software agents that think, decide, and act across complex workflows, all while remaining fully auditable and governed.
Pedro Buhigas, CIO at Kodiak Gas Services, distilled the impact: “If half our workforce engages with IFS Loops agents once per day, that’s $3 million ROI a year. More importantly, it’s 90,000 hours given back to field technicians.” Digital Workers aren’t just automating tasks—they’re freeing up human experts for high-value work, a critical advantage as labor shortages bite harder.
These Digital Workers are more than bots. They’re domain specialists, embedded with operational knowledge and able to execute end-to-end processes without downtime. The first five—Customer Order Manager, Supplier Order Manager, Inventory Replenisher, Operations Analyst, and Material Replenisher—promise immediate gains in speed, accuracy, and strategic focus. As Cathie Hall, Chief Product and Customer Officer at IFS, put it: “We build industrial-focused AI where it matters most—in the daily workflows of frontline teams.”
IFS’s platform isn’t just about automation. It’s about orchestration. AI-powered modules now span field service, asset management, resource planning, and even aviation maintenance. Technicians get instant answers, AI-generated work briefings, and automated reporting. Maintenance planners benefit from optimized instructions and accelerated reliability analysis. Manufacturing and finance teams gain predictive simulations and intelligent invoice processing. Even sustainability gets a boost, with AI-generated KPI narratives and automated emissions tracking.
Tony Alloway, VP at BGIS, shared the results: “Through our transition and technology partnership, we drove 30% savings to the bottom line—proof of how simplifying complexity pays off.” For IFS, the message is clear: industrial AI isn’t a distant promise. It’s a present-day solution, directly addressing productivity drains and invisible work that sap staff capacity.
IFS Think Tank: Stagnant Living Standards and Budget Controversy
But while industrial AI promises new efficiencies, a very different IFS—the Institute for Fiscal Studies—is sounding the alarm on the UK’s economic outlook. Following the latest Budget, the IFS describes the forecast for household spending power as “truly dismal.” According to analysis by the Office for Budget Responsibility (OBR), average disposable income is set to grow by a meager 0.5% annually over the next five years. For most families, that’s a near-stagnant increase compared to the 2% annual growth seen in previous decades.
Helen Miller, director at the IFS, notes: “Before this Budget, the UK was faced with lacklustre economic growth, stagnating living standards, and a dizzying array of fiscal pressures. The same is still true after this Budget.” The government has implemented meaningful rises in tax, spending, and borrowing, but the outcome is far from transformative. Disposable income per person is expected to rise by only £104 per year for the next four years—hardly enough to offset the effects of inflation and rising costs.
There’s also controversy over the government’s approach to taxation. Despite manifesto pledges not to raise taxes on “working people,” Chancellor Rachel Reeves extended the freeze on income tax thresholds and imposed new caps on pension contributions. Critics, including the IFS and the Resolution Foundation, argue that these measures represent a breach of promises and will hit ordinary workers hardest. Prime Minister Keir Starmer insists that all changes are “fair and necessary,” but admits the cost of living remains the top concern for most households.
‘Fiscal Fiction’ and Delayed Pain: Election-Year Budgeting
The IFS’s warnings go further. In their analysis, they accuse the government of engaging in “fiscal fiction”—designing tax rises and spending cuts that are heavily backloaded, delaying real pain until just before the 2029 general election. Helen Miller cautioned, “It’s a backloaded set of tax rises that almost entirely delay the pain. It’s reminiscent of the fiscal fictions of recent years.” The result? Workers may see little immediate impact, but by 2029, over a quarter of all taxpayers will be pulled into higher tax brackets. Basic-rate taxpayers are projected to pay £220 more each year, while higher-rate earners face a £600 increase.
Other measures, like the pay-per-mile levy on electric vehicles and new pension scheme caps, are timed to come into effect near the end of the parliament. Day-to-day departmental spending growth will be limited to about 0.5% per year from 2028, down from previous expectations. The Treasury claims these are efficiency savings, not service cuts, but the IFS remains skeptical, noting that governments often top up spending plans as elections approach.
The Resolution Foundation’s research backs up these concerns, suggesting that nearly three-quarters of the £77bn in extra taxes over the next five years will come after April 2029. It’s a “pre-election austerity,” they argue, that risks putting off tough decisions until the last moment.
IFS at the Crossroads: Promise Meets Pressure
The acronym IFS now stands at a fascinating crossroads. On one side, the technological IFS is redefining what’s possible in industrial operations, deploying digital workers to supercharge productivity and sustainability. On the other, the fiscal IFS is warning of stagnation, delayed pain, and the risks of policy built on optimistic projections and election-year timing.
What unites both stories is the search for capacity—whether it’s labor in factories or disposable income in households. The digital transformation led by IFS Cloud 25R2 could help industries do more with less, but the broader economic context remains fraught. As companies and governments grapple with structural change, the challenge is to ensure that technological progress isn’t undermined by fiscal shortfalls and policy indecision.
IFS’s dual headlines in November 2025 reveal a profound tension: technology offers new hope for efficiency and sustainability, but fiscal policy may be postponing hard choices that shape living standards for years to come. As the UK prepares for a consequential election cycle, the real test will be whether industrial and economic innovation can converge to deliver meaningful improvements for both workers and households.