The Strategist

Who is the world leader in AI research and development?

02/04/2019 - 10:52

Developments in the field of artificial intelligence (AI) are considered almost the key direction of scientific and technological progress in the 21st century. But which countries and companies on our planet are leading in creating "thinking" and self-learning machines and computer programs? It is widely believed that North America is still ahead, but Asia is about to overtake it, while Europe is increasingly lagging behind.

However, this picture simplifies the situation too much; the balance of power in this very dynamically developing field is much more complex. This is evidenced by two studies published January 31. One was presented by the Institute of German Economics (IW) in Cologne, the other by the World Intellectual Property Organization (WIPO) in Geneva, one of the specialized UN agencies.

Authors of the Cologne study chose a very original criterion for their rating. They decided to evaluate success and competitiveness in the field of AI of individual countries (and the European Union as a whole) in terms of the number of young innovative companies (start-ups) working in this field.

At the same time, they, in particular, relied on a list of 3,500 startups from 67 countries, compiled in 2018 by the German consulting company Roland Berger. Other sources included the European Statistical Office Eurostat, the Organization for Economic Cooperation and Development (OECD), the World Bank (WB) and the Chinese Xinhua news agency.

The list of 15 global leaders was headed by the United States, the second place was taken by the European Union (currently 28 countries), and the third went to China. There are no big surprises, except for the fact that Europeans are significantly behind the Americans by the number of startups developing various aspects of AI (about 730 firms vs. 1,400), but are clearly ahead of China (400).

One of the main surprises of the study is that Israel, where the population is simply incomparably smaller, took the fourth place after these three economic giants. In the 5th place is Great Britain (its upcoming exit from the EU will clearly weaken its collective positions); the second representative of North America - Canada – is in 6th place, and Japan took the 7th place.

Prevalence of European countries in the second half is noteworthy: France (8), Germany (9), Sweden (11), Finland (12), Spain (14), Switzerland (15). There are only two Asian states: India (10) and South Korea (13). 

However, not absolute, but relative numbers are far more significant for innovative potential of any state. IW researchers compared number of startups with the total number of enterprises in the country and its population. According to these two criteria, the world leader in the field of artificial intelligence is Israel.

Finland has been ranked 2nd in the number of start-ups developing AI for 1 million residents, and Sweden took the 3rd place. Next are the United States, Great Britain, Canada, Switzerland, France, the EU, and Germany. Thus, there is not a single (densely populated) Asian country in the first ten. South Korea is on the 13th place, China is on the second last, India is on the last.

In other words, young artificial intelligence firms are much more common in Europe and North America, and they rely on a much wider base than in Asia. This conclusion is fully confirmed by the ranking by the number of startups in the field of AI per 1000 operating enterprises. Here, the United States took the 2nd place after Israel, and Finland was again at the 3rd. They were followed by Switzerland, Canada, Great Britain, Sweden and India, Germany (9) and Japan (10). South Korea took the 14th place and China - 15.

Of course, start-ups are very indicative, but are not the only and certainly not the main criterion for assessing success of individual countries and regions in development of artificial intelligence. The Cologne Institute understands this perfectly well. Another criterion may be number of patents in the field of AI, the Geneva-based World Intellectual Property Organization decided to explore this aspect.

An integral part of the extensive report prepared by WIPO is a list of 30 companies and research centers that registered the largest number of patents in the field of AI in 2013-2016 (the data of the last two years have not yet been published). During this period, as many AI inventions were patented on the planet as in all the 60 previous years (the very first developments date back to the 1950s). The number of patents in the field of avionics and autonomous driving has been growing especially fast lately.

The American corporation IBM with 8290 patents is leading In the WIPO ranking by a large margin. The 2nd American company Microsoft won the 5930 patents. Next are the Japanese Toshiba, the South Korean Samsung, and then NEC, Fujitsu, Hitachi, Panasonic, Canon. They are all from Japan.
The report’s authors emphasize that of the 20 largest copyright holders of new patents in the field of artificial intelligence, 12 are Japanese companies. If we compare these data with the research of the Cologne Institute, the conclusion is clear: Japan is one of the global leaders in the field of AI, and the technology there is developed not by young startups, but by traditional giants of the electronic industry.

But it seems that there is an opposite situation in Europe. In any case, large European companies are represented rather modestly in the list compiled by WIPO. Only the German technology concern Siemens was in the top twenty. It took 11th place after the American company Alphabet (Google) and was before the Japanese Sony and Toyota. The German concern Bosch was at 21st place. The top 30 also includes the Netherlands Philips and the Finnish Nokia.

As for China, it was represented by the state-owned energy concern State Grid Corporation of China (15th place), private internet giant Baidu (26th), the Chinese Academy of Sciences (17th), as well as by two universities at the end of the list.

Thus, the conclusion is obvious: the sphere of artificial intelligence develops mainly due to private initiative, by large joint-stock companies and young start-ups in the USA, Europe, Japan (relatively speaking, in the Western world). In China, however, it is mainly a public matter, which is handled by mainly state-owned enterprises and budget-funded research institutions.

This conclusion is supported by additional facts that are indicated by the authors of the WIPO study. Thus, there are 110 universities from China among the 500 most active private and state recipients of patents in the field of artificial intelligence.