How can AI policy support economic growth?

How can AI policy support economic growth?

Generative AI is not just a buzzword; it's reshaping industries from healthcare to finance with its remarkable capabilities. As the technology gains traction, its economic benefits are becoming increasingly apparent.

Given the substantial resources and capabilities required to be at the forefront of this market, public policy will play an important role in determining to what extent the UK will be active in and benefit from generative AI. However, policy resources are finite and therefore it is crucial that they are invested in a way that maximises their return for taxpayers.

Frontier's new report, commissioned by Microsoft, provides a strategic framework to guide policymakers on how to prioritise AI policy interventions and an initial application of the framework based on existing evidence.

The key questions for policymakers explored in the report are:

  • How should government prioritise alternative strategic options to support the growth of generative AI in the UK?
  • How can policy best unlock value across the generative AI value chain?
  • Should government support be targeted towards specific layers of the value chain?

Our economic framework considers possible policy options across the value chains. It recommends that in the short term, Government could assign higher priority to policies that support the development of generative AI applications in the UK. In the medium and long term, there are also opportunities to support the development of foundation models in the UK and to increase national compute capacity.

Key policy actions to support the development of generative AI applications could include:

  • Providing direct funding and support access to finance for start-ups and scale-ups in generative AI.
  • Promoting AI safety in sectors like financial services, health, biotech, and professional services, where the UK has strong skills and export potential.
  • Supporting the development of essential skills, including data and prompt engineering.
  • Facilitating collaboration between generative AI start-ups and data providers.

As the UK's AI development landscape rapidly evolves, our framework is designed for future adaptation to address emerging challenges.

To mark the publication of the report commissioned by Microsoft, Frontier hosted a roundtable for key stakeholders to discuss our framework and the different types of policies which could be most effective in supporting the growth of the generative AI sector in the UK.

Click here to read the full report: How Can AI Policy Support Economic Growth?