AI industry in the Nordics is developing at breakneck speed
Helsinki, Finland – November 8, 2022 - Silo AI, one of Europe’s largest private AI laboratories, today published its second annual Nordic State of AI report. Prepared in collaboration with 15 Nordic governmental and research organizations, the report indicates that AI is moving from a period of startup hype into a phase of enterprise implementations. While overall investments in the Nordics have risen in the previous years, the lack of talent and data continues to pose a significant challenge for scaling the use of AI.
A more mature time in the use of AI is already here, and the new Nordic State of AI report gives various types of evidence to support this. One clear indication is that the knowledge gap between large enterprises utilizing AI and industry newcomers is widening, and the number of new AI startups is decreasing. Also, AI is used more and more as a part of companies’ products and services: 73% of AI active companies surveyed for the Nordic State of AI report said this was their main use case for AI.
The Nordic State of AI survey responses also indicate that companies and organizations are continuously developing their use of AI. A third reported that they expect to adopt new AI solutions within the following 3 months, and close to 75% within a year. Also, 90% replied that AI is either Highly important or Important for their organization.
Other sources also support the idea of a growing Nordic AI activity, especially in large enterprises. According to Eurostat 2022, all Nordic countries score above the EU average, 8% of enterprises using AI. Denmark is the clear leader in the Nordics and the EU too, with a 24% user percentage. Finland’s enterprises were the second most active users with 16% of enterprises using AI. Norway follows with 11%, and Sweden holds the last position among the Nordics at 10%, still above the EU average.
Peter Sarlin, CEO of Silo AI comments: “The use of AI in the Nordics is developing fast, and as our report suggests we are moving into a more mature phase in AI deployment. AI is not considered as a standalone solution anymore, but as an inseparable part of products and services. Many AI startups from only a few years back have disappeared, not because of decreasing AI investments, but rather because of a focus shift in how AI is utilized."
AI investments and talent shortage
Even though the use of AI seems to be maturing, a big part of AI investments is still geared towards experimenting with AI. Out of those surveyed for the Nordic State of AI, 55.5% said this was one of their investment targets during the next 6 months. Many also invest in specific AI use cases (47.1%), recruiting more talent (47.1%) and AI infrastructure (45.4%).
Overall, all Nordic countries have significantly increased their venture capital investments in AI in recent years. Especially Sweden has seen this increase, as VC investments have more than doubled in just two years from less than $200 million in 2020 to over $500 million in 2022. Finland stands out with the least invested VC euros, barely exceeding $100 million. Overall, all Nordic VC investments in AI are estimated to decrease year on year in 2022, with the exception of Sweden.
One of the clearest obstacles for scaling the use of AI, according to the findings in the Nordic State of AI report, is the lack of talent. Almost half of the surveyed companies say that they invest financially into recruiting new talent in the next 6 months. Many rely on internal talent when it comes to AI. 79.8% say that they prefer to use internal expertise, which puts pressure on recruiting. Close to a third say that they use external experts as a resource for developing their AI, and 13.5% say they have outsourced their AI development entirely.
AI talent shortage is not only a Nordic issue: globally, 80% of companies have already reported or are planning to reduce some of their AI-related activities as a direct consequence of an AI talent shortage.
Samuel Kaski, Professor at Aalto University and the University of Manchester and Director of the Finnish Center for Artificial Intelligence FCAI, comments: ”AI has a key role in improving productivity, boosting the economy and complementing humans, which partially offsets shortages in human talent. It also has the potential to address challenges from the energy crisis to climate change and sustainable development. The key to unlocking this potential is developing and studying AI systems and solutions that assist, rather than by-pass, humans.”
This year, we collaborated with 15 organizations across Nordics to make the report happen. Here are some of our interviewees and partner's comments on the State of AI:
“Currently, there’s a strong pull from the consumer’s side for more sustainable products and services as well as data transparency. Older companies are being forced to adapt to new business models in a rapidly changing competitive environment. For example, global technology giants have scaled their expertise and AI capabilities to new industries such as healthcare and consumer retail.”
– Inka Mero, Founder & Managing Partner, Voima Ventures
“We really need diversity both in roles developing AI algorithms but also among the people building solutions around algorithms. First and foremost for the sake of a better and more equal, future-proof future, but also because according to the World Economic Forum there will be 97 million jobs emerging by 2025 majority requiring skills in AI, engineering etc. We have now the opportunity to shape the industry and we can't let it pass.”
– Eija-Leena Koponen, Women in AI
“Something Denmark shares with the Nordics is a societal interest in what we are doing in AI. However computational power, as well as lack of relevant data, continue to be a challenge all across Nordics.”
– Lars Kai Hansen, Professor, Head of section, Department of Applied Mathematics and Computer Science at Technical University of Denmark (DTU)
“The initial hype over what AI can accomplish using large amounts of data and advanced algorithms is beginning to subside. Now, it must also be possible to explain how artificial intelligence arrives at its predictions, so that it is no longer a mystery which no one fully understands, but one which we can use to base a substantial number of important decisions.”
– Serge Belongie, Professor at DIKU and Director of the Pioneer Centre for AI
“For all of the Nordic countries, I would like to see more Nordic collaboration. We already share many strengths, such as our common values, trust in public authorities, and a lot of data having been collected over a long period of time.”
– Klas Pettersen, CEO at NORA.ai
“Nordic-level collaboration plays a crucial role in AI development in Sweden. We know from the past that research and teamwork played a critical role in developing new telecommunication technology generations with Nokia, Ericsson, and many others. Although the main industrial sectors are quite different from one another in Nordic countries, strong collaboration between private and public sectors and academia is vital.”
– Karl Henrik Johansson, Director at Digital Futures and Professor at KTH Royal Institute of Technology
“Our job in the government is to help them better understand the principles of AI and to overcome these fears, while still using AI responsibly. As public authorities, we have a special responsibility to ensure that citizens’ data are handled securely, and that decisions that affect individuals are correct and transparent. I believe that this is possible, and that AI will be essential for providing better public services in the future.”
– Christine Hafskjold, Senior ICT Policy Adviser at the Norwegian Ministry of Local Government and Regional Development
“Looking at Denmark’s AI scene from a wider perspective, NLP-based products are seeing more backing now than five years ago, and investment volume is slowly climbing. We’re at the dawn of a golden age of language understanding, and AI penetrates all academic domains, not just Computer Science. With most cutting-edge NLP research performed on English content, local languages often become a distant second priority.”
– Mads Rydahl, Strategy Evangelist in Cactus Communications, former product lead on Apple’s Siri, and a seasoned expert in Machine Learning and Natural Language Processing
“I believe the adoption of AI in Sweden is very likely to continue to accelerate in most industries, there is no discussion any longer whether it will impact businesses or no. The top use cases that I see most organizations working on, with various levels of maturity and where AI is creating an impact are; the ‘contact center automation’, (product) ‘feature enhancement - optimization’ and ‘risk analytics’.”
– Vanessa Eriksson, CDO at Zenseact
“It is essential that we track closely the state of AI in the Nordics as AI continues to be the major game changer in the industry and society for years to come.”
– Janne Järvinen, Mission Lead, Digitalization, Business Finland
For more information please contact:
Peter Sarlin, CEO, Silo AI
+358 40 572 7670
About the Nordic State of AI report
Nordic State of AI is an annual report by Silo AI, one of Europe’s largest private AI laboratories. The report concentrates on the state of artificial intelligence in the Nordic region, with the goal of providing business leaders, academics, policy makers as well as anyone interested a comprehensive overview of the Nordic AI market. The report also serves to catalyze new opportunities by bringing the Nordic organizations working with AI closer together.
This year, the report was made in collaboration with 15 governmental or research organizations across Denmark, Finland, Norway and Sweden: Chalmers, Danish Industry, The Pioneer Centre for AI, Business Finland, Finnish Center for Artificial Intelligence, Women in AI Finland, NORA, Norwegian Cognitive Center, Smart Innovation Norway, Digital Norway, Swedish AI Society, Digital Futures, KTH Royal Institute of Technology, Nordic Innovation, and Vainu.io.
Silo AI is one of Europe’s largest private AI labs – a trusted AI partner that brings competitive advantage to product R&D. SIlo AI builds AI-driven solutions and products to enable smart devices, autonomous vehicles, industry 4.0, and smart cities. The company provides its customers a unique access to world-class AI expertise, as well as the Silo OS infrastructure to speed up AI development and deployment.
Established in 2017, Silo AI is on a mission to build a European flagship AI company, with offices currently in Finland, Sweden, Denmark and Switzerland.
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