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Is the UK losing its edge on AI?
Datastream

Is the UK losing its edge on AI?

Friday 18 December 2020

The country comes third in Tortoise’s AI Index, which seems impressive until you start looking closer…


Who knows what’s happening with Brexit? We’re a couple of weeks away from the end of the UK’s transition period, the moment when our departure from the European Union will become total, and a trade deal could be announced any day now. Or never. Like we say, who knows? 

But we do know that this is a dangerous moment for the UK. While the negotiations have focused on traditional sectors such as fishing, artificial intelligence – a potential jobs engine for the country in the coming decade – could also be hit hard if we come crashing out. 

Last week, Tortoise released the latest edition of the Global AI Index, a ranking of nations on their capacity to develop and deploy AI. According to the Index, the UK comes in at 3rd place, behind the United States and China. Which sounds impressive, right?

But while the UK’s position was unchanged from last year, its score out of 100 went down from 44 to 40, signalling that it has fallen further behind the leading superpowers. And now Israel, the Netherlands, Canada, France and Germany are nipping at its heels. 

A no-deal Brexit, combined with the economic impact of the pandemic, could leave the UK unable to stop itself from slipping further and being overtaken by other states with more cash and fewer distractions.

Why is the UK slipping back?

Over the past year, a peloton of AI-focussed nations have picked up points in the Index as the UK lost momentum in areas related to infrastructure, research and talent. 

  • Supercomputing power in the UK – needed to run big AI systems – is not keeping pace with that of other nations. Last year, it had 11 of the world’s top 500 supercomputers; now it has 10. 
  • This year, UK universities on the Times Higher Education Top 100 Computer Science Universities list dropped an average of over three places, while Queen Mary University dropped off the list entirely. 
  • The gender diversity of UK AI professionals has fallen slightly since last year, from 19.1 per cent female to 18.9 per cent, according to a survey by Kaggle, a machine learning and data science community. 
  • UK-based academics published fewer papers in certain influential AI journals than their peers from China and the US this year, losing the UK points in our Index. We counted fewer paper citations from UK-based authors on a key database of the world’s top 1,000 academic researchers on computer science. 
  • People across the world have flocked to “Massive Open Online courses” – sites like DataCamp that teach online classes – but the UK has seen a smaller spike than other countries. 

The challenges of Brexit

The Tortoise Global AI Index suggests that the UK’s AI sector has so far weathered the uncertainty around Brexit quite well. The first 11 months of 2020 saw 50 per cent more funding into UK AI than the same period last year. This follows record investment into UK tech start-ups in 2019.

This growth rate even outstripped that seen in Germany (47 per cent), Canada (4 per cent) and Israel (20 per cent). During the same period, funding to the US and China dropped.

But when compared to the US, the UK – and Europe more broadly – remains far behind. So far this year, the US has raised 12 times more funding into AI than the UK, according to our analysis of Crunchbase, a database of companies. 

What’s more, if we reach the end of the transition period at 11pm on 31 December without a deal, a number of challenges are likely to arise for the UK.

Start-ups on both sides of the channel have so far thrived on the free flow of data between the UK and the EU. As it stands, personal data such as people’s names and addresses can move freely between the UK and other EU countries. EU rules ban the flow of private data to “third countries,” which are countries outside the EU, in order to protect its citizen’s data. If a no-deal Brexit happens, the UK will be automatically lumped into this “third country” grouping, meaning that data sharing would be banned by default.

The UK government, on the other hand, has said that to prevent disruption it will continue to allow Brits’ data to be shared across the border and processed in the EU.

“If we crash out and there’s no subsequent agreement around data flows, AI, machine-learning or data-analytic businesses are going to really suffer as a result,” says Russ Shaw, founder of Tech London Advocates. “In order to be a successful business, you need to have scale in terms of the data fields that you’ve got. Being part of the European Union, we’ve got 500 million people that we can work with.” 

“Without an adequacy agreement, companies working on projects with international data sets may find they have to pause operations. They would simply not be allowed to access the data that they are routinely accessing today,” agrees Dom Hallas, executive director of the Coalition for a Digital Economy (Coadec), a start-up lobby group. “It could be genuinely quite chaotic.”

Attracting talent could be another issue. Lengthy visa applications and uncertainty over healthcare provision within the UK’s future immigration policy could dissuade EU nationals from moving to the UK. EU students may be less likely to study in the UK, where they will now have to pay international tuition fees and will have less access to funding opportunities. The US, meanwhile, offers generous financial aid packages.

Indeed, start-ups, universities and other research hubs have already lost out on European funding and talent, which will continue to benefit EU neighbours in the years ahead. The European Investment Fund – which invests billions into Venture Capital firms, which in turn support start-ups – has already steered funding away from the UK by stipulating that venture capitalists have a more European focus.

In future, the UK will miss out on the EU’s now concerted effort to stimulate AI across the bloc. According to the European Commission’s white paper on AI, published in October, the EU should aim to attract over €20 billion of total investment in AI per year over the next decade – money from which the UK’s competitors will now benefit. 

Some suggest that the UK government and private funding could fill the gap, but the UK government has so far committed far less money to AI than its counterparts. In 2018, they pledged to spend £1 billion on AI over five years, including £300 million on new AI research. 

By contrast, in 2018, Germany committed €3 billion to spend over six years, and subsequently topped this up by £1 billion in 2019. This year, it announced a €50 billion tech fund, which will include AI funding. Similar commitments are also being made in countries such as France and South Korea.

The industry’s fears

AI entrepreneurs are certainly worried about what comes next. According to research published last month by Tech London Advocates, one in four London tech companies fear that they would not survive the economic impact of a no-deal Brexit. 

The same survey found that 75 per cent of tech companies fear that the combination of the pandemic and Brexit will make it significantly harder to raise investment capital in future. 60 per cent fear losing access to skilled international talent once the UK’s transition period ends with the EU.

Two thirds of UK tech companies say that the government is not protecting the sector from the economic impacts of Covid-19. Just half remain confident that the UK will continue to be a world-class centre for technology innovation. 

As Russ Shaw puts it, “The UK still has an impressive AI sector – third in the world – but… it is going to have to work really hard, much harder.”