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UK lags behind France and Germany in generative AI
Fri, 23rd Feb 2024

With generative artificial intelligence (AI) making waves the world over, countries globally are eager to capitalize on the technology – and companies in Europe are already spending substantially on generative AI initiatives. However, according to Infosys research, British companies are lagging their counterparts in the rest of Europe.  

Companies in the UK report spending just $216 million over the past 12 months -  quite the shift from the UK’s position in 2020, where it was leading Europe in AI investment. As greater innovation is associated with increased productivity and, eventually, social and economic growth, low investment levels in generative AI do not bode well for the UK.

Reasons for the gap 

Europe is known to have a technology gap when compared to the US, attributed to European markets being more risk averse to adopting new technology. It could also be an effect of stringent regulations and policies – such as Europe’s General Data Protection Regulation (GDPR), as well as the EU AI Act – that have increased the focus of European companies on ethics, bias, and fairness challenges when compared to their US counterparts. The Infosys study explains one of the primary reasons for the lag in investment between Europe and the US is that European countries are still experimenting with generative AI compared to US companies that are at more advanced stages in AI adoption. This could be owing to the AI skills gap in Europe, and the issue of shortage of AI-related talent. 

When it comes to the UK it has been involved in a race with France to achieve supremacy in AI. While both governments have a strong intent, it is ultimately greater expenditure that will present a competitive advantage. While French President Emmanuel Macron has announced 500 million euros ($562 million) as an investment to promote the growth of new AI ‘champions’ in France, added to the 1.5 billion euros committed previously for the development of AI capabilities, the UK government has committed only £1 billion ($1.3 billion) to AI research, which appears insufficient for it to beat France at the AI game.

A ray of hope

However, UK companies plan to increase their spending in the next 12 months, lifting it by 135% to $509m in that time. And despite lagging France in spending, UK companies are delivering more for their investments in generative AI. In other words, despite spending significantly less than France and Germany, the UK is comparable in terms of companies that are creating value from generative AI.

Getting back in the game

As per a study, UK companies adopting AI tools are predicted to deliver a 22% boost to the UK economy by 2030. By creating conditions that will help them increase its investment in generative AI, UK companies can pave the way for success. 

  • In European countries, including the UK, boards of directors are usually the primary sponsors of generative AI initiatives in companies and are instrumental in setting regulations and policies indicative of an alignment between investment and innovation. British companies can take advantage of this and get a buy-in from the board to increase investments and further their progress in AI.
  • To make up for lost time, they can speed up their experimentation with generative AI to deliver more valuable use cases while at the same time, being cognizant of adhering to responsible AI practices, and focusing on the need to develop an AI-first operating model that will help them get the best out of generative AI. It will involve a five-pronged approach — across product, design, data, talent, and engineering — backed by a shared digital infrastructure, micro-change management, and a partner ecosystem.
  • To combat the skill gap issue that prevents them from increasing investment in generative AI, companies in the UK can implement training and reskilling initiatives to create the right skill sets that would enable them to surge ahead in their investment plans. What can work in their favor is, their preference for upskilling and reskilling their own talent and recruiting in-house rather than relying on partners, as it displays a confidence in managing generative AI systems and in acquiring and developing skills. 

Besides this, UK companies must navigate the paradigms of AI regulations of nations that they engage with and align well to them. By setting the stage to increase investments in generative AI, companies in the UK can realize their goal of lifting their spend in it in the next 12 months.