Nordic countries lack a unified approach to AI

Nordic countries are lacking a coherent, joined-up strategic approach to take more advantage of joint cross-border collaboration on artificial intelligence (AI), according to a recent report from Helsinki-based private lab Silo AI.

The State of Nordic AI report concludes that although Nordic states share a unified view on the ethical use of AI and the prioritisation of human wellbeing with AI, they lack a common “Nordic vision” to maximise the value potential from joint cross-border collaboration in primary areas such as innovation-led research and downstream commercial development. 

The report does, however, highlight improvements within the Nordic AI sphere, such as the visible shift in 2021 to increase adoption of AI in small to medium-sized enterprises (SMEs) across all countries in the region, but Denmark, Sweden and Finland in particular.

The State of Nordic AI report also reveals higher levels of public and private funding for AI initiatives, with Sweden dominant.

Silo AI’s report is a spin-off from the organisation’s expansion in July 2021, when it launched the Nordic region’s First Artificial Intelligence Accelerator (FAIA) as a central part of its long-term plan to build a European flagship AI company to deliver AI-driven solutions to companies in the autonomous vehicle, Industry 4.0, communications networks, smart devices and smart city sectors.

The Nordic-level FAIA aims to expand Silo AI’s existing services to all Nordic markets, with a specific focus on helping established companies take their first steps with AI-driven products, said Alexander Törnroth, Silo AI’s ecosystem lead, who heads up FAIA’s operations.

“We want to grow our activities to other Nordic countries to support the increasing need to accelerate scaling AI across a variety of industries,” he said. “As the market matures, we plan to focus on helping smaller, more traditional organisations overcome their questions and doubts.”

The report’s findings bolster the view that the Nordic states have the potential to become major global players in the development and commercialisation of AI systems, products and services. The report notes that McKinsey has placed Nordic countries in the top quartile for AI readiness.

The report further notes that the Nordic countries are ranked in the global top 10 by Oxford Insights on the Government AI Readiness Index. Only the US and the UK were ranked above Finland, followed by Sweden (5th), Denmark (8th) and Norway (10th). In driving AI, the Nordic countries benefit from a high level of digitisation, skilled workforce, data quality, accessibility and transparency.

The State of Nordic AI report refers to global AI talent studies that find about 2% of the worldwide AI talent, including data scientists, researchers and data engineers, are located in the Nordic region. Sweden is deemed to have the largest talent pool of all the Nordic states.

The report estimates that 24,000 Nordic organisations are currently “experimenting with AI”. Among these, 4,359 organisations are assessed as using AI in their day-to-day business activities, while the more advanced Nordic enterprises deploy AI in core functions to create competitive advantages in central areas covering customer services, products, and research and development (R&D).

The report identifies a lack of time and financial resources, as well as challenges related to data and scaling, as the principal impediments for SMEs to integrate AI more widely into their businesses and at a greater speed.

With much untapped potential to develop a joint “Nordic vision” to advance AI at a more global level, the State of Nordic AI report highlights significant differences in the level of funding for both private and public AI initiatives across the region.

The report ranks Sweden – the largest of the five Nordic economies – as being the front-runner for ICT investments. Sweden boasts not only the highest investment in IT, as a percentage of its GDP, but has a particularly high share of investments directed to software and databases.

At about €43, Denmark is ranked as having the highest per-capita investments in AI in the European Union, followed by Finland in third position with €36 per capita. Sweden is ranked fourth with a per-capita spend of €28 on AI investments. The report also underlines Finland’s and Denmark’s rising level of investment in talent, skills and lifelong learning, putting them ahead of Sweden in this category.

Compared with Finland and Denmark, Sweden invests at a much higher level in data, technology and infrastructure. In these three important segments, Sweden is investing at four times the rate of Finland and is more than 50% above Denmark’s investment level.

A significant finding from the State of Nordic AI report is that Finland has the highest number of companies using AI in business in the Nordic region. The report links Finland’s strong and mature tech innovation culture to its continuing capacity to succeed in commercialising solutions powered by AI.

The report places Finland ahead of its Nordic neighbours for investing in both public and private infrastructure that helps SMEs to introduce and integrate AI technology into their corporate strategies as an essential tool to promote business growth and development.

Finland’s experience with growing AI within its economy is providing a model for other Nordic countries, said Peter Sarlin, CEO of Silo AI.

“More and more Nordic organisations are using artificial intelligence in their core operations,” he said. “This means that companies are incorporating AI into their own products and services. In this way, Nordic firms can ensure that their products remain competitive.”

Although the greatest uptake in AI technology is currently concentrated on large Nordic enterprises, SMEs across the region are also increasing their investments to use AI more broadly in their operations, said Sarlin.

“What is interesting is that the uptake is led by different industries in each of the four countries – by major export industries such as forestry and shipbuilding in Finland, by the energy sector in Norway, by healthcare in Denmark and by telecommunications in Sweden,” he added.

But Nordic countries, including Finland, could miss out on their potential to become major global pioneers and players in the AI domain if they fail to scale up investments in innovation-led R&D to drive commercialisation of AI products and services, said Samuel Kaski, head of the Finnish Centre for AI.

“Finland is a case in point,” he said. “The country has a real opportunity to remain one of the pioneers globally, given the accelerating rate of artificial intelligence utilisation in business and society at large. The fear right now is that if we don’t invest at the same level in AI research as other leading countries, we run the risk of lagging behind as a nation.”