According to a survey conducted by the Artificial Intelligence Observatory of the School of Management of Milan’s Polytechnic, the artificial intelligence market is worth 300 million, with a +15% increase in AI present in 53% of companies, while 40% have operational projects, despite the budget reduction caused by the health emergency.
The Artificial Intelligence market responded well to the health emergency, recording 15% growth compared to 2019 and reaching a value of €300 million, 77% of which commissioned by Italian companies (€230 million) and 23% as project exports (€70 million). Expenditure is driven by the software component, which is worth 62% of the market, services are worth 38%, and the hardware component is marginal. Most investments are dedicated to intelligent data processing projects (33%), algorithms for analysing and extracting information from data, while the initiatives which have grown the most in terms of resources are chatbots and virtual assistants (10%, +28%). Although budget problems due to the pandemic have been a strong barrier to the deployment of AI solutions (indicated by 35% of companies), these are now present in 53% of medium-large Italian companies and the number of companies with fully operational projects underway has grown from 20% in 2019 to the current 40%.
During the past twelve months, Artificial Intelligence has attracted growing interest from institutions: the ‘Italian Strategy for Artificial Intelligence’ has been published, the foundations have been laid for the birth of the Italian Institute for Artificial Intelligence (I3A), a national hub which will be based in Turin to coordinate the various research activities and contribute to the development of the sector, and AI has been mentioned in the European recovery plan as one of the key technologies for economic recovery and digital transformation. And it is now a familiar concept to consumers too, with 94% having heard of AI at least once and 51% having used products and services with artificial intelligence capabilities. These are some of the results of the survey by the Artificial Intelligence Observatory of the School of Management of Milan’s Polytechnic presented during the online conference “All-In: focusing on artificial intelligence for the recovery of the Country System”. The health crisis, therefore, has not stopped innovation and growth in the Artificial Intelligence market, but it has certainly focused attention on certain types of projects, accelerating, for example, forecasting initiatives (demand assessment), anomaly detection (discovery of online fraud), object detection (such as the recognition of DPI in images) and even more so chatbots and virtual assistants, driven by the online shift in customer relations. Business maturity has also increased, with a strong growth in fully operational projects.
The resilience shown by the AI sector during the emergency seems to allow us to look forward to 2021 with optimism, and the efforts at European level to define guidelines to regulate the development of artificial intelligence algorithms are also positive.
The European Commission has published a white paper laying the foundations for the protection of consumer rights, while in October 2020 the European Parliament adopted three resolutions dealing respectively with ethical aspects, the issue of civil liability and intellectual property rights relating to robotics and AI. In 2020, international institutions devoted much attention to Artificial Intelligence because of its potential uses, but also because of the ethical implications which may affect businesses, citizens and society as a whole. According to an analysis conducted by the Observatory on 94 real cases of ethical issues related to the use of AI technology, the most frequent critical issues are potential distortions in the design phase of the AI solution (bias, 23%), violation of freedoms (freedom, 19%), centralisation of financial/technological or cultural resources by big tech companies (trust, 17%), and privacy issues (11%).
Investments are mainly in software and algorithms
The Artificial Intelligence market is mainly driven by software, on which 62% of spending is concentrated, driven by the sale of commercial software licences and the development of customised software or algorithms. Services cover the remaining 38% of the market and are mainly represented by system integration and consulting, while investments in hardware are still marginal. The AI projects attracting the largest investments are algorithms for analysing and extracting information from data (intelligent data processing), which account for 33% of expenditure (+15%).
These are followed by solutions for interpreting natural language (natural language processing) with 18% of the market (+9%), algorithms to suggest content to customers in line with their individual preferences (recommendation systems) with 18% (+15%) and solutions with which AI automates certain activities of a project and governs the various phases (intelligent robotic process automation), which are worth 11% of expenditure (+15%). The remaining 20% of the market is equally divided between chatbots and virtual assistants (10%), which are the projects with the most significant growth (+28%), and computer vision initiatives (10%, +15%), which analyse the content of an image in contexts such as surveillance in public places or monitoring a production line. The most active sector as an investor in AI solutions is finance (23%), followed by energy/utilities (14%), manufacturing (13%), telco and media (12%) and insurance (11%).
More artificial intelligence projects
More than half of the 235 medium-large Italian companies analysed by the Observatory have activated at least one AI project during 2020.
However, significant differences emerge between large companies, where these initiatives are present in 61% of cases and focus on organisational and cultural growth as well as on the exploitation of data and the development of algorithms, and medium-sized companies, which still appear to be less mature and have active projects in only 21% of cases. 91% of the sample had a positive view of AI initiatives, with results above (45%) or in line (46%) with expectations; only 9% hoped for better results. The pandemic has not slowed down companies’ approach to AI, but it did reduce available resources. Budget cuts were the main barrier to adopting AI solutions, mentioned by 35% of the sample, especially in smaller concerns and in the most affected sectors such as manufacturing. The other barriers most frequently reported by companies were low top management commitment (34%), limited corporate digital culture (26%) and difficulty in defining how to apply AI within the business (26%). Artificial intelligence is now familiar to almost all Italian consumers: 94% have heard of it at least once, and the majority have a correct conception of it, linked to the automation of specific tasks (65%), driving vehicles without human intervention (60%), interaction between man and machine (58%) and logical reasoning (40%). More than half of the users (51%) have already used products and services which include artificial intelligence features, mainly phone voice assistants (65%), smart speakers such as smart home speakers (62%) and systems providing suggestions on eCommerce sites (58%). The overall assessment of AI is positive for 83% of users surveyed, a percentage which rises to 91% when considering users of products and services with AI functionality.