The global market for artificial intelligence was valued at US$36bn in 2020, according to a recent report by Fortune Business Insights. This figure is expected to increase to $47bn in 2021 and reach a staggering $360bn by 2028, growing at a compound annual growth rate of 33.6%.
The use of AI can be seen across a wide variety of sectors from transportation and consumer goods to education and finance. Its extensive influence has caused many countries to invest heavily in AI research and development with the aim of sustaining long-term economic growth and protecting national security.
As a result, countries that underinvest in AI may weaken their future economic competitiveness.
The US leads in AI investment and talent
The US is the leading country in the first ranking from Just Food sister site Investment Monitor assessing investor friendliness within the AI space. Out of eight out of 17 indicators analysed, the US holds first place, including metrics such as e-participation, investment in emerging technologies and software spending as a percentage of GDP.
According to figures from GlobalData, more than 8,300 AI deals were recorded in the US in the five years up to November 2021. This is more than triple the amount of its closest competitor China, which recorded approximately 2,500 deals during the same period.
Notable deals in the US include California-based Teledyne Technologies’ $8.2bn acquisition of Oregon’s FLIR Systems in May 2021. The newly named Teledyne FLIR develops intelligent sensing solutions for defence, industrial and commercial applications. When combined with the company’s cloud platform, its traffic system cameras use AI to predict traffic, preventing congestion and potential accidents.
More than 58,000 AI-related patents were registered in the US between November 2016 and 2021, cementing its status as a hub for innovation. It is also home to some of the world’s most successful tech companies including six of the ‘Big Nine’, the nickname for the nine tech companies dominating the AI landscape. The US members are Amazon, Apple, Facebook, Google, IBM and Microsoft.
In addition, the US offers investors access to a rich pool of AI talent, bolstered by a substantial number of international researchers who move there for work. According to a Global AI Talent Tracker from MacroPolo – part of US-based think tank The Paulson Institute – nearly 60% of top-tier researchers are employed by US institutions.
Singapore makes AI a top priority
Singapore ranks second in Investment Monitor’s AI Index. The city-state scores highly across multiple indicators including its government’s promotion of investment in emerging technologies.
In June 2017, AI Singapore was established to boost the city-state’s AI standing. As part of a national programme, a total of $150m will be invested in 100 AI-related projects to solve real-world problems across finance, healthcare and city management by mid-2022.
The Singapore government’s national AI strategy was launched in November 2019, listing five national AI projects to encourage social and economic growth in areas including transport and logistics, healthcare, education and safety and security. A “model AI governance framework” was also established as part of the strategy, providing private companies with detailed guidance on moral and governance issues when implementing AI solutions.
In recent years, the city-state has become a hub for industry 4.0 and advanced manufacturing. More than three-quarters of Singapore’s total manufacturing output is in high and medium-high technology. Many key global suppliers including ABB and Siemens have established advanced manufacturing centres of excellence there.
Singapore is one of three Asia-Pacific countries to rank in the top ten of the AI Index, with Japan and South Korea placing fifth and sixth, respectively.
Switzerland is at forefront of AI ethics and governance
Switzerland takes third place in the ranking, scoring well for its ICT regulatory environment and charges for the use of intellectual property.
The Swiss legal system is internationally recognised as both stable and liberal. As such, AI companies establishing operations in Switzerland can expect significant protection for intellectual property as well as high investment security for research and development activities.
In addition, Geneva hosts the AI for Good Global Summit. The UN platform, organised by the International Telecommunication Union, aims to use AI to help meet the targets outlined in the UN’s Sustainable Development Goals by the 2030 deadline.
European countries dominate the rest of the Index’s top ten. The Netherlands follows Switzerland in fourth place, scoring highly for the adoption of emerging technologies, while Sweden ranks seventh, followed by Finland, Germany and Ireland.
China let down by weak regulatory environment
In 2017, the Chinese government announced its intention to become the world’s leading AI hub by 2030, with a strategy focused on investing in research and retaining domestic talent.
Despite this, China ranks outside of the index’s top ten countries. It scores poorly across various metrics including its ICT regulatory environment, software spending as a percentage of GDP and intellectual property receipts as a percentage of total trade.
The first stage of the AI development plan aimed to close the gap between China and the world’s leading AI hubs by 2020. Research from GlobalData shows this is not the case, with China still lagging far behind the US in terms of the number of AI-related deals, fillings, jobs and patents recorded.
While the US remains the current AI leader, it must remain vigilant to stay ahead. Research by the Centre for Data Innovation suggests that the US should focus on increasing research funding and developing local talent.
To compile Investment Monitor’s 2021 AI Index, 134 countries were scored across 17 indicators. Each indicator was given a weight based on its relevance to the investor-friendliness of a country’s AI market, which were then added together to make the final score.
• Adoption of emerging technologies
• Investment in emerging technologies
• Government promotion of investment in emerging technologies
• ICT regulatory environment
• Software spending, % GDP
• High-tech manufacturing, %
• Intellectual property receipts, % total trade
• High-tech exports, % total trade
• ICT services exports, % total trade
• Researchers, FTE/mn pop
• Gross expenditure on R&D, % GDP
• AI-related news
• AI-related deals
• AI-related fillings
• AI-related jobs
• AI-related patents