Press Story

New database of UK AI industry finds only one in seven companies focus on solving a specific problem
Government has generational opportunity to steer businesses, as around one in five AI firms receive public funds
The state should use its procurement and grant-making powers to provide industry with a much-needed sense of purpose and direction, says IPPR

A first-of-its-kind database of the UK AI industry finds the majority of companies are not directly contributing towards the public good, despite many having at some point benefitted from public funds, according to a new report 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.

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.

IPPR 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

Carsten Jung, head of AI at IPPR, said:

“AI progress continues to accelerate at an unprecedented pace and is poised to have a seismic impact on economy and society. The government has said it wants to ‘shape the AI revolution’ but currently much of AI innovation is generic and not focussed on solving hard problems.

“Too many companies are focussed on generic process improvements rather than coming up with new, better products. And too few innovations are aimed at solving big societal problems, such as public health and climate change. This quantity over quality, profit over purpose, speed over substance, approach is a huge missed opportunity.

“The dearth of breakthrough AI innovation is partly a result of innovation policy, which has often been unfocussed and risk averse. The government has many levers to steer the UK AI industry towards fixing hard problems. With a push in the right direction, UK companies could lead the world in developing AI that serves the public good—enhancing sustainability, improving healthcare outcomes, and boosting opportunity.”

Hugh Lloyd-Jukes, chief executive at Health Navigator (HN), said:

"HN exists to help patients stay out of hospital and lead healthier, longer lives. We believe the published evidence shows that HN’s service can support the government’s healthcare priorities nationally - as well as health systems around the world.

“HN is proud to support NHS North East London to deliver proactive population health management to 2.5 million Londoners as part of the NHS’ National Demonstrator for AI-guided Clinical Coaching, working in partnership with UCLPartners.

“10 years of published research within the NHS has shown that deployment of HN‘s technology and its Personalised Care Institute (PCI) accredited health coaches can reduce A&E attendances, hospital admissions and the length of hospital stays. Patients report a much more positive care journey and better care outcomes following contact with HN."

ENDS

Carsten Jung, the report’s author, is available for interview

Case studies are available

CONTACT

Liam Evans, Senior Digital and Media Officer: 07419 365334 l.evans@ippr.org

David Wastell, Director of News and Communications: 07921 403651 d.wastell@ippr.org

NOTES TO EDITORS

The IPPR paper will be available for download at: https://www.ippr.org/articles/the-direction-of-ai-innovation-in-the-uk
IPPR (the Institute for Public Policy Research) is an independent charity working towards a fairer, greener, and more prosperous society. We are researchers, communicators, and policy experts creating tangible progressive change, and turning bold ideas into common sense realities. Working across the UK, IPPR, IPPR North, and IPPR Scotland are deeply connected to the people of our nations and regions, and the issues our communities face. We have helped shape national conversations and progressive policy change for more than 30 years. From making the early case for the minimum wage and tackling regional inequality, to proposing a windfall tax on energy companies, IPPR’s research and policy work has put forward practical solutions for the crises facing society. www.ippr.org