The UK government has generational opportunity to steer businesses. However, a
review of UK AI industry finds only one in seven companies focus on solving a specific problem. Hence, the majority of companies are not directly contributing towards the public good, despite many having at some point benefitted from public funds.
The conclusion of the report argues that the state should use its procurement and grant-making powers to provide industry with a much-needed sense of purpose and direction. The report comes from the Institute for Public Policy Research (IPPR).
The think tank compiled a database of 3,256 AI firms operating in the UK to detail the type of applications, sectors, and specific challenges these companies focus on.
This revealed how the majority of companies (85 per cent) do not focus on specific problems or specific sectors but offer ‘generic’ AI solutions. The authors say too many firms focus on improving existing businesses process, such as creating efficiencies for back-office tasks that could reduce head count in areas like marketing, customer management and administration, while too few focus on building something new and exciting, such as much needed innovations that tackle ill health early in life.
Despite one in five companies receiving public funds, only 15 per cent of firms focus on solving specific societal problems like delivering better, sustainable transport or improving public health.
However, the UK is in a promising position to build on its strengths as an AI innovation hub – the UK is the leading generative AI patent hub in Europe – and develop more companies focused on the public good.
There are an encouraging number of UK firms working on breakthrough technologies, that with more government support, could lead the way in giving the UK AI industry a sense of purpose and direction.
For example, Health Navigator (HN) uses AI to predict hospitalisations, and could play a role in helping the government achieve its milestone in reducing waiting lists.
Through its AI Opportunities Action Plan, the government wants to “shape the AI revolution rather than wait to see how it shapes us” and “shape the application of AI within a modern social market economy”. But without intervention, the current pipeline of AI innovation lacks clear direction towards social objectives, say the report’s authors.
The report recommends the government takes a more activist role to give the sector a sense of purpose and direction.
To do this is should:
• Set up a new AI Tracking Unit in government, to map what types of AI deployment is occurring and where the gaps are; this should include understanding what the impact for jobs and businesses will be.
• Steer AI innovation to focus on ‘problem areas’ by using Innovate UK’s grant-making powers, and the British Business Bank, to focus funding on AI firms which align with the government’s missions.
• Direct the government’s huge procurement budget to ‘make a market’ for breakthrough AI innovations by backing companies that solve specific problems, and making the government a more dynamic player in rewarding innovation.
This should challenge the dearth of breakthrough AI innovation, which the authors is partly a result of innovation policy, which has often been unfocussed and risk averse.
