According to a study conducted by management consultancy firm PWC, the global economic impact of artificial intelligence could represent $15.7 trillion by 2030. AI companies in the UK alone represent the potential for an additional £232 billion in growth. This will account for a 10.3% uptick in GDP, occurring directly as a result of AI research.
These substantial gains will be driven by greater productivity facilitated by automated processes; labour force augmentation; and increased consumer demand generated by the availability of AI-enhanced products, such as digital assistant and chatbots.
AI companies in the UK are rapidly becoming major players in AI research and development. Now, the sector is receiving substantial support. In April last year, the UK government announced a £1 billion investment in AI research. The funding package will also see £300 million of public money injected into research, creating 1,000 new PhDs by 2025. In this article, we discuss why the UK is such a thriving environment for AI development and the threats the future may hold.
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The factors behind the success of AI companies in the UK
The UK is one of the world’s most vibrant ecosystems for AI research. In London alone, there are over 750 AI companies, making the British capital the European leader in AI development. This dynamism is partly to do with the UK’s long history of pioneering research, from the world’s first computer programmer Ada Lovelace to groundbreaking code-breaker Alan Turing. Now, institutes devoted to their legacies continue to support British innovation. For instance, over the last two years, the Alan Turing Institute hosted over 300 leading academics and published 138 research dossiers.
Furthermore, London’s universities are an important component of the AI supply chain, nurturing world-class technical and entrepreneurial talent. As mentioned in the introduction, this ecosystem is supported by a new initiative from the UK government. Known as the AI Sector Deal, the project aims to stimulate AI research over the next five years. However, it is not only the public sector that facilitates the UK’s thriving AI economy; a vibrant startup culture is also contributing to expansion. Between 2008 and 2016, there was 42% year-on-year growth within the sector. For scale, that’s almost twice the global average – which is an incredible statistic considering the data was collected after the 2008 economic crisis.
The Brexit threat to AI research
However, the threat of Brexit looms large over AI companies in the UK. Although the industry weathered the 2008 crisis, this radical political shift is making the future unclear. For instance, the uncertainty surrounding the UK’s exit from the EU is deterring investors, which represents a serious threat to the country’s otherwise thriving startup economy. However, even if domestic investment remains at current rates, overseas investors may think twice about supporting British AI – especially as foreign talent are increasingly put off by the anti-immigration rhetoric around Brexit.
Furthermore, AI companies in the UK can’t deny that they’ve benefited from EU membership. For instance, a 2017 study found that as much as 80% of the UK’s automation industry was funded by the EU. In the report, the director of the Bristol Robotics Laboratory Chris Melhuish went as far as to say that the European Union was “the salvation of British robotics” – which doesn’t bode well for the industry post-Brexit.
The future of European AI
How the UK will address the post-Brexit funding gap remains unclear. However, the UK government appears to be adopting an aggressive position as a pioneer in AI research, continuing to channel a significant portion of public spending towards the sector over the coming years. However, the government can only do so much; eventually, the sector will have no choice but to seek the help of foreign investors to plug the gap. Meanwhile, the UK’s loss will be the European Union’s gain. For example, AI research in Spain is booming, with firms like Hu:toma AI gaining recognition for their innovation in the sector.