Brexit Impacts UK AI Leadership
The ongoing Brexit saga is posing challenges for every industry, but AI is uniquely affected. Kasia Borowska, MD and cofounder of London-based AI consultancy startup Brainpool.ai, outlines how the industry is, and will continue to be, impacted by the UK’s departure from the European Union
David Davis MP, the former Brexit secretary, has been often quoted recently saying “In the future, we [the UK] are going to be a world leader in artificial intelligence”.
Davis believes the UK’s AI leadership puts it at the front of the queue for global investment and demand and is an example of why the UK shouldn’t worry about exiting the EU without a deal. There’s truth to it – the UK has a strong record in AI and is widely recognised as #3 in the world for AI talent, research and expertise behind the US and China. It’s certainly the European hub for AI excellence.
But this self-confidence ignores the very real impact from Brexit uncertainty to disrupt the UK’s position as an AI hotspot because it is now significantly harder for UK-based AI startups to get VC funding, while attracting overseas talent to the UK is also more difficult. Without funding new AI businesses and without the world’s top talent, will the UK retain its top billing?
UK AI and the role of Brexit
UK tech startups are attractive investments for VCs globally because of the depth of skills and breadth of talent in this market and this is especially true for the UK’s AI startups. Since June 2016, UK tech companies have received more than £5bn in VC funding – more than France, Germany and Sweden combined – according to research from London and Partners.
London and the UK dominate the European investment charts for funding into the hottest sectors of artificial intelligence, cybersecurity and fintech. However, VC funding of startups is less certain because of Brexit.
In a survey of overseas tech leaders by industry group Global Tech Advocates, 68% of respondents cited Brexit as the number one obstacle for UK tech companies. A quarter would not currently invest in a British tech company because of Brexit, while 55% would not expand their business into the UK.
Investment is still coming in, but the uncertainty means VCs are pausing decisions they otherwise would have committed to.
A move to Europe?
Similarly, many startups are considering having to move to Europe to be eligible as ‘a safer bet’ for VC funding, typically Amsterdam, Paris, Berlin or Eastern Europe. A Silicon Valley Bank survey of UK startups found that over a third had plans or considered setting up abroad.
AI startups considering moving out of the UK is an obvious threat to the UK’s leadership position. Another issue that has to be considered is where the UK’s talent comes from.
Currently the UK hosts some of the world’s top AI research hubs in Cambridge and Oxford Universities, UCL, Imperial and others making it a magnet for global and European talent. And once that talent is here it tends to stay.
General data around London’s tech workforce finds that about a third of workers originate from outside the UK, with around one in five coming from the European Union.
Brainpool.ai’s experience backs this up – our small team is French, German and Polish, while one British employee now resides in Canada. Our broader network of over 300 ‘Brainpoolers’ is totally global.
It’s common to find startup teams in London made up of a dozen or more nationalities. But the level of uncertainty and risk around Brexit is making that a significant proportion of the UK’s AI talent network reconsider. And make no doubt that other countries will be fighting over it by offering incentives and opportunities.