Revealed: The industries benefiting most through Government investment
By Prathiba Krishna, AI and Ethics Lead at SAS UK & Ireland
Last year will surely go down as the time when AI went mainstream – as tools like ChatGPT were adopted by people on a mass scale.
Of course, long before that, other types of AI were already starting to become embedded in our daily lives, in voice recognition technology, facial recognition at airports, and customer service chatbots.
But this is just the start. Organisations in every sector, from retail to financial services to healthcare, are now taking advantage of government grants to help them develop AI-related projects to improve decision-making processes and deliver efficiency and value.
Some SAS customers are now using AI to tackle some of the biggest challenges of our time, including climate change, the spread of diseases and serious crimes such as fraud and people trafficking. Others are using it to improve the performance of their operations, ensuring they remain competitive and make a valuable contribution to the economy.
The government recognises the power of technology to boost the economy and create well-paid jobs. The ‘Artificial Intelligence sector study’, published by the Office for Artificial Intelligence and the Department for Science, Innovation and Technology, found that there are over 3,000 innovative AI companies in the UK, generating more than £10bn in revenue. They also employ more than 50,000 people in AI-related roles, and add £3.7 billion to the economy.
Last year, the government set out a roadmap for the UK to become a technology superpower by 2030, with AI being named one of the ‘critical technologies of tomorrow’ along with quantum computing, semiconductors, telecoms and engineering biology.
Many businesses may not be able to secure enough private funding to support their growth ambitions - step forward Innovate UK. Innovate UK is the national innovation agency funded by the government to support a wide range of researchers, businesses and public sector organisations, such as universities, the NHS and NGOs. As well as providing guidance on AI, it has also invited funding applications for feasibility studies.
As with any technology, there are always early adopters and those who perhaps take a more cautious approach. Funding granted by Innovate UK is a good barometer for the appetite in different sectors and can highlight which ones are using the technology to drive innovation and growth.
Which industries secured the most AI funding?
SAS analysed the grants awarded to businesses across 12 sectors to identify the industries which have secured the most AI funding, based on the average grant per company, per industry.
Agriculture companies received the highest grants on average, at more than £600,000 per company. Projects related to farming and the environment will benefit from AI systems helping to improve harvest quality, precision and crop yield production.
Retail was next on the list as grants averaged just over £500,000, with the majority of projects focusing on ecommerce. As retail businesses accounted for 19% of all administrations in 2023, this could be a sign of the industry looking to innovate with AI to avoid closures in 2024.
Manufacturing came third for average grant per company (over £400,000) followed by HR (with just over £360,000).
With 152 institutions, education on average secured £80,942 in grants. They included the University of Cambridge – in the city SAS has previously named the most AI-ready – which received £60,000 for research into developing a machine learning method suitable for protecting privacy while detecting financial crime.
However, the grant is dwarfed by the £2.5m and £844,000 the University of Manchester received for two separate projects. The first is for the Soteira project, a cyber security demonstrator for the e-commerce industrial market which reduces the impact of security breaches and attacks. The second focuses on edge computing, processing data at higher speed and volume for greater action-led results in real time.
The highest grant awarded to a business, at just over £2m, went to a company designing software that aims to revolutionise how residential housing schemes are developed to provide affordable and sustainable homes around the UK.
| Sector | Number of grants awarded | Average grant amount per company, per industry (in £) |
|---|---|---|
| Agriculture | 53 | 613,682.15 |
| Retail | 9 | 517,176.44 |
| Manufacturing | 85 | 406,788.69 |
| HR | 8 | 363,729.88 |
| Healthcare | 70 | 265,359.26 |
| Finance | 34 | 175,422.94 |
| Technology | 164 | 172,957.30 |
| Law | 10 | 134,708.30 |
| Media | 46 | 98,021.98 |
| Education | 152 | 80,942.57 |
| Logistics | 6 | 38,315.67 |
| Utilities | 71 | 11,477.63 |
Sectors ready to unlock the value of AI
We also looked at how the total funding – £178 million – was distributed across the 12 sectors to find out where overall investment in AI projects is highest.
Substantial grants were awarded in farming, manufacturing, and utilities – rather than multiple smaller grants – which explains why they appear top of the table below for proportion of grants received.
| Sector | Proportion of funding |
|---|---|
| Agriculture | 19% |
| Manufacturing | 19% |
| Utilities | 17% |
| Technology | 16% |
| Healthcare | 10% |
| Education | 7% |
| Finance | 3% |
| Retail | 3% |
| Media | 3% |
| HR | 2% |
| Law | 0.75% |
| Logistics | 0.13% |
Our analysis also revealed exciting opportunities for organisations in sectors that might need to catch up in AI-led projects. Retail, for instance, only attracted 3% of the funding – yet companies received the highest average grants of any sector at £525,178, which could give recipients a head start over their competitors.
Why should businesses look towards AI investment?
- AI and machine learning are transformative technologies – and organisations are using them to develop innovative solutions that could address many of the big challenges we face today. The breadth and diversity of projects that have received funding through Innovate UK are a testament to the potential of data-led technologies, and with the right support and partnerships, we could see many more to come.
- Some companies have large-scale access to private investment opportunities, whether this be their own reserves, venture capitalists, crowdsourcing, or other forms of investment. However, this research highlights the sheer volume of businesses that have opportunities to leverage AI but need further support from government grants to fulfil their potential.
- Funding awarded by Innovate UK is a useful barometer for which sectors are most in need of support to adopt AI. However, this is against a backdrop of analytics technology becoming increasingly accessible to organisations of all sizes across all sectors, enabling them to realise its potential much sooner.
Methodology
SAS looked at data on Innovate UK Funded Projects that were included in the AI, Data Economy and Innovation sectors between 2020-2023, split across 12 categories.
Filtering each section the data revealed:
- Total grant offered to each sector
- Average grant amount per company, per sector
- Total percentage each sector awarded
Data correct as of January 2024.
Prathiba Krishna, AI and Ethics Lead at SAS UK & Ireland