AI and the exceptional scale of opportunity in the Midlands: new cluster report published

A new Midlands Engine cluster snapshot report finds our region’s emerging Artificial Intelligence cluster offers growing opportunities and benefits for the Midlands economy and society.

Underpinned by a growing number of firms adopting AI technologies and a thriving talent ecosystem, the Midlands is well placed to capitalise on the opportunity AI represents.

The snapshot finds that this is driven by a skilled, technical workforce leading the way within organisations, including Midlands universities with AI-specific expertise.

In partnership with the The Data City, the report identifies companies operating at a local level and the universities working on AI projects within the New Economy cluster.

The snapshot looks at the cluster through four lenses:

AI businesses are growing

There are over 300 artificial intelligence businesses active in the Midlands, representing 11% of the UK AI company population.

This has grown year on year, with the number of AI companies in our region growing by 122% between 2013 and 2022.

Midlands universities are AI innovators

Universities in the Midlands are central to fostering innovation in AI. The snapshot showcases how the funding universities receive for AI projects (£18.5m since 2017) goes into developing real solutions for global challenges.

To address the need for improved crop yields to support a growing population, for instance, the University of Nottingham’s BREAKTHRU project is using AI to assess which wheat varieties are more effective at thriving in compacted soil.

Employees are city-based

The snapshot also illustrates where those employees working in AI companies are based across the Midlands. High density populations include Birmingham, Derby, Nottingham and Leicester. There are also high populations in areas of the West Midlands around Birmingham, including North Warwickshire and Solihull.

But AI is suffering underinvestment

While £39m worth of investment has gone into the Midlands, AI companies in the region are underfunded in comparison to the rest of the UK.

The snapshot identifies that Midlands-based AI companies raised just 0.71% of the total equity received in the UK from 2017 to 2021 by high-growth companies in this sector, despite making up 10.4% of the sector’s population.

This could be due to a focus by funders on AI companies in more established tech hubs of the UK, particularly those in close proximity to academic institutions with AI specialisms, such as Oxford, Cambridge and London.

Driving up AI investment from across the public, private and academic sectors will be critical to maximising the Midlands’ AI potential, both in terms of its adoption across key industries (e.g. manufacturing, services, construction) and growing the region’s technology service offer in itself.

Read the full report here