Lords AI Committee calls for SME growth fund to reduce data monopolies

The House of Lords Select Committee on AI also recommended major changes to the education system to build AI skills


The House of Lords has called for the creation of a growth fund for UK SMEs working with AI, following the UK's first major parliamentary inquiry into artificial intelligence.

In a report titled AI in the UK: Ready, Willing and Able? (PDF), the House of Lords Select Committee on Artificial Intelligence said the current investment environment was failing to support British companies trying to scale their businesses.

© iStock/BrianAJackson
© iStock/BrianAJackson

Committee chairman Lord Clement-Jones told Computerworld UK that discussions with industry insiders such as technology trade association techUK revealed that while companies are attracting early-stage investment, they struggle to raise the scale-up funding they need to build profitable businesses. The growth fund would support them to do this.

"We hope that that would be very much part of our capital markets after a period where it wasn't just the British Business Bank and civil servants deciding on funding opportunities, it was entrepreneurs, business people involved as well," he said.

To support the growth of AI companies, the committee recommended reserving a proportion of the £2.5 billion investment fund at the British Business Bank to help SMEs with a substantive AI component to scale up.

It added that the government should review the access to funding for such companies to ensure that they are adequate and properly promoted, and that targeted government procurement would help build ideas into successful AI companies.

"Government has great power economically when it procures new technology and AI, of course, is a prime candidate for that," said Lord Clement-Jones.

"The power of government spend - which of course the US government historically have been incredibility aware of in the defence sector - well we should be absolutely aware of that in the civil sector and make the best use of it, because that could be a very powerful instrument for AI development."

Data monopolies

The report argued that the development of the UK's thriving AI startup scene was being threatened by the monopolisation of data by a small set of tech giants.

To mitigate this risk, the committee urged the government to develop strong ethical, data protection and competition frameworks, and regulators to review how large companies use data.

Lord Clement-Jones said that companies can quickly dominate the AI market through the "data network effects" caused by machine learning to improve their services as more data is added to the network, which attracts more customers, who in turn provide more data.

The value of this data helped Google and Facebook attract more than half (54 percent) of the UK's digital ad market in 2017, according to research from eMarketer.

"We think that the Competition and Markets Authority should have a look at this," he said.

"We've seen the situation with Facebook; we've seen the situation with Google. The big tech makers, whether they're social media platforms or search platforms or whatever, are building up these huge datasets and there is an element of monopoly.

"What we have to see is whether or not there's an abuse of a dominant position and what access do the smaller companies have to these kinds of datasets, because if they don't have access that means the only people who can really build large AI systems using all this data are the tech majors themselves."

AI skills and education

Another barrier to growth for the UK's AI sector is a gaping skills gap. According to analysis from jobs site Indeed, there are more than twice as many jobs in AI than there are qualified candidates.

To allow the UK's AI sector to thrive in the future, the committee suggested a series of changes to the education sector, including a focus on retaining adults for an uncertain future.

"If people in mid-career find that their jobs are being substituted or changed, then I think we definitely need to make sure that the national retraining scheme is effective," said Lord Clement-Jones.

"That's been announced by government. We want to make sure that it's also funded by industry so that they've got a hook into it and so that it doesn't suffer from some of the problems of the apprenticeship levy, which is not as flexible as it should be."

The report also endorsed a PhD matching scheme with the costs shared between the state and the private sector.

Lord Clement-Jones said that the tech sector supported the calls for them to invest in education.

"Their big worry is shortage of skills, and this is one of the subtexts really that we've got to make sure that our visa system post Brexit works for the sector as well," he said.

"What they're worried about is the skills shortage in the AI and machine learning sector to quite a high degree."

The report also called for an increase in the number of visas available for researchers and developers with valuable skills in AI.

To do this, it suggested adding machine learning and associated skills to the tier 2 shortage occupations list.

Lord Clement-Jones believes that these recommendations will help the UK's AI sector continue to thrive.

"The overarching message is one of opportunity," he said. "We do think that the UK does have the opportunity. It's already a leader in AI research, what we want to make sure is that the application of that research is leading edge in the UK as well."

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