Most AI firms lack purpose and are not contributing to the public good: ‘Quantity over quality’

Most artificial intelligence (AI) firms are not contributing to the ‘public good’, new analysis has found – despite sucking up billions in public money.

AI, prime minister Keir Starmer has declared, is going to fix Britain, doing everything from diagnosing cancer to filling potholes to reducing red tape.

Accordingly, his government has funnelled public money into the emerging technology, and pledged to generate private investment to the tune of £14bn.

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But hardly any of this investment is going towards “solving hard problems”, new analysis warns.

The Institute for Public Policy Research (IPPR) compiled a database of 3,256 AI firms operating in the UK, and examined the type of applications, sectors and specific challenges that they focus on.

The think tank’s analysis exposes a distinct “lack of purpose” bedevilling the sector. The majority (85%) of companies do not focus on specific problems or specific sectors, instead offering ‘generic’ AI solutions like speeding up admin.

“Too many firms focus on improving existing business processes, such as creating efficiencies for back-office tasks that could reduce headcount in areas like marketing, customer management and administration,” the report’s authors warn.

Meanwhile, real problems – like delivering better, sustainable transport or improving public health – attract hardly any focus.

“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,” said Carsten Jung, head of AI at IPPR.

“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.”

In short: investment is being used to create chirpy chatbots that write emails a bit faster. Meanwhile, fewer than 4% of AI firms in the UK are currently focused on major social challenges like health, education or the environment, the report finds.

According to analysis by Capital Economics, around 22% of AI firms in the UK have received some form of public funding, such as grants or loans from Innovate UK or the British Business Bank.

But without being targeted, this money is merely contributing to ‘accelerationism’ – “making AI better, cheaper and widely deployed.” The report authors call for ‘directionism’ instead.

“This is the idea that policy can steer the direction of AI deployment actively, using policy incentives – such as targeted funding, public procurement or public infrastructure access – for building products and services that create public value, expressed though government missions,” the report authors write.

The question of how AI should be deployed is one of the big problems of the 21st century. If AI’s objectives aren’t carefully designed to align with human wellbeing, much is at risk.

For example, “directing” the use of AI will also have positive implications for the labour market. In the “worst case scenario” drawn up by the IPPR, 7.9 million jobs could be lost to AI. In a “best case scenario”, no jobs will be lost.

We’re at a fork in the road – with opportunities and risks aplenty. So what should the government do?
IPPR calls for the creation of an AI Tracking Unit within the government to map deployment, identify gaps and assess its impact on jobs and businesses. This would help policymakers target interventions more effectively.

The think tank also urges the government to direct funding to firms working on technologies that align with broader missions, like improving public services or advancing net zero.

“Innovation policy has often been unfocussed and risk averse,” Jung added. “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.”

For example, the think tank suggests, the government could invest in companies like Health Navigator (HN), which uses AI to predict hospitalisations. This could play a role in helping the government achieve its milestone in reducing waiting lists – arguably a much more useful objective than bettering the “technical efficiency” of marketeers.

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