Aiming high for AI: Innovate UK’s role in supporting AI

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Artificial intelligence (AI) will shape the future, but what role has Innovate UK played? And what can we learn to position the UK as a global leader in AI?

Support for AI research and development (R&D) has been recognised as a fundamental pillar in the UK AI Council roadmap (PDF, 3.34MB).

Later this year, the UK government will be publishing a national artificial intelligence strategy (GOV.UK) to make the UK a global centre for the development, commercialisation, and adoption of responsible AI.

For AI to shape our future, what can we learn from our historic support for AI technologies to deliver the economic and social benefits of AI for the UK?

Understanding our AI portfolio

Innovate UK has a history of supporting innovation within AI technologies through numerous competitions and interventions. Innovate UK has committed more than £300 million in support for firms developing AI technologies between 2005 and 2020.

Following the creation of UK Research and Innovation (UKRI) in 2018, we collaborated across UKRI on an AI review. The review gives us a clearer picture of UKRI’s current and future role in supporting AI research and innovation in the UK.

For Innovate UK, this involved engaging with businesses of all sizes across many sectors to identify the challenges and opportunities for developing and deploying AI technologies (GOV.UK).

The more data the better

If there is one thing we know, it’s the more data the better! And this is exactly what we set out to do:

  • gather data and evidence to understand our impact
  • identify the barriers that remain for businesses developing and deploying AI.

In August 2020, we commissioned Ipsos MORI to undertake an impact review of our grant funding for AI (PDF, 1.03MB). The evaluation provides that robust independent assessment, as well as creating an evidence base to support future interventions for AI developers, and those seeking to adopt AI technologies.

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What have we learned?

The UK is a leading player in the sector, only surpassed by the US and China, attracting almost £3 billion in equity investment in 2020.

The sector is characterised by rapidly growing small and medium-sized enterprises (SMEs), showing an increase from 400 in the mid-2010s to more than 1,000 in 2020. This exemplifies the need for a system that enables these firms to succeed.

Our interventions have largely supported firms moving towards commercialising AI innovations, as opposed to assisting firms with traditional business models adopt AI. Projects awarded funding have accelerated their technological and commercialisation progress, above and beyond what would have occurred in the absence of funding.

Incentivised R&D activity

Innovate UK support has incentivised further R&D activity and attracted additional levels of venture capital (VC) funding. Estimated additional R&D spending and VC investment raised £2.94 and £1.21 per £1 of Innovate UK funding, respectively.

This additional activity has meant that there has been an expansion of jobs due to the support provided. It’s estimated that more than 1,100 jobs can be attributed to the grants. Importantly, these were not only limited to technical jobs but also included roles supporting commercialisation and sales activities.

We also found that Innovate UK’s funding has an important role to play in energising local AI activity. For example, our support for companies outside of the major AI hubs has increased the creation of new firms in these areas, helping to ensure AI benefits all regions of the UK.

However, there’s still work to do

AI is in scope for many of our competitions. The AI projects we’ve funded have demonstrated positive benefits, with findings suggesting we can expect significant economic return over the next two to three years.

But what if we positioned AI centre stage and funded more focused interventions? Are we missing an opportunity to address the prevalent challenges faced by companies developing and deploying AI, or those seeking to adopt such technologies?

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The long and winding road

AI is not simply a subset of digital technologies. The commercialisation and product journey for AI technologies are often longer and more expensive than other digital technologies, and indeed many other sectors within the R&D sphere. This potential disadvantage is well documented, alongside many other barriers to successful commercial outcomes such as access to technical skills and data.

However, another barrier blocking commercialisation for firms developing AI solutions are insufficient business models. Companies need more support that:

  • combines technical activities with help to validate markets
  • develop robust commercialisation plans to maximise public investment.

Missing link between developers and adopters

Innovate UK has largely supported start-ups and SMEs developing disruptive products. Less support is being received by firms looking to exploit the potential of AI to drive productivity within their organisations.

AI developers struggle with end user engagement. There is also a lack of understanding about the effectiveness of using AI to address individual challenges within the firms looking to adopt AI. More effective connections could increase adopter capabilities and ensure the solutions being developed address industry needs.

UK adoption of AI has long been slow compared to other leading nations. It is likely to stay that way without increased support to enable more widespread adoption of AI across the UK. It is vital we address this challenge to ensure the UK can capitalise on the economic and social benefits of AI.

Prioritising responsible AI

Responsibly developing and deploying AI technologies involves making sure the impact of an AI system is positive and does not cause unintentional individual or societal harm.

Businesses need to understand how to cost-effectively translate ethical principles into organisational practice. There is a need for more support for businesses to understand how to consider ethical implications at the outset of a project. While initiatives exist to support businesses in establishing best practices and operationalise these as standards, there is a need for more widely available support for the AI business community.

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Next steps

The evaluation provides us with valuable insights and lessons that can help us, and other policy makers improve future support for businesses developing and adopting AI. Innovate UK is uniquely positioned to accelerate development, commercialisation and adoption of AI and we will continue to take action to address the barriers faced by the UK’s AI ecosystem.

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