Public sector AI deployment could boost GDP

The integration of artificial intelligence could provide an economic boost of some £2.6 billion to the Northern Ireland economy by 2030 but will likely cause a “small decrease” in jobs, MLAs have been told.

Requested by the Committee for the Economy, the Assembly’s Research and Information Service (RaISe) prepared a briefing paper to provide MLAs with an overview of AI deployment in the public sector. Furthermore, it highlights governmental data reporting on key potential economic impacts of AI deployment.

Featuring estimations from PricewaterhouseCoopers (PwC), the briefing paper states that AI use across the economy could increase Northern Ireland’s GDP by £2.6 billion.

A 2021 study undertaken by the then-Department for Business, Energy and Industrial Strategy (BEIS) in Whitehall also notes that Northern Ireland is likely to experience a small decrease in total net jobs as a result of AI deployment over a 20-year period (2021 to 2041). Meanwhile, net job gains are envisaged for Belfast, Causeway Coast and Glens, Derry and Strabane, and Lisburn and Castlereagh. All other local councils in Northern Ireland are predicted to experience net job losses; with Armagh, Banbridge and Craigavon estimated to experience the greatest number of job losses.

Defining artificial intelligence

In the absence of a universal definition of AI, the RaISe paper focuses on the Organisation for Economic Co-operation and Development (OECD) member countries’ definition which was agreed in 2023.

“An AI system is a machine-based system that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments. Different AI systems vary in their levels of autonomy and adaptiveness after deployment.”

Current regulation

In February 2024, the Department for Science, Innovation and Technology (DSIT) in Whitehall published A pro-innovation approach to AI regulation, which sets out the UK’s approach to AI regulation in government. The approach aims to consist of regulating AI using existing laws, enforced by existing regulators, rather than introducing new laws and a new dedicated regulator; creating an AI “cross-sector and outcome-based” regulatory framework.

The UK Government asked specific regulators to publish their strategic plans by 30 April 2024. Moreover, in its February 2024 AI Command Paper, DSIT announced a £10 million package to boost regulator AI capabilities.

Meanwhile, a private members’ bill (PMB) on AI regulation was introduced by Chris Holmes in the House of Lords in November 2023 and was sent to the House of Commons in May 2024, seeking to establish a new AI authority to regulate AI, contrary to the Government’s approach. However, the dissolution of Parliament on 30 May 2024 for the general election means that the Private Members’ Bill has fallen.

Reflecting on regulation elsewhere, the EU is introducing AI regulation through the AI Act. First introduced in 2021, the AI Act was approved by the Council of the European Union in May 2024.

In Northern Ireland, the RaISe paper indicates that academic AI innovation is currently concentrated in Queen’s University Belfast (QUB) and Ulster University (UU).

In March 2024, Invest Northern Ireland and the Department for the Economy announced a £16.3 million investment in an AI Collaboration Centre (AICC) – based at UU and operated in partnership with QUB – focusing on increasing business awareness, thus aiming to boost competitiveness and productivity.

Impact of AI in Northern Ireland

A study produced by DSIT in 2023 found that Northern Ireland was the trading location for just 1 per cent of AI businesses. Based on the estimated 3,170 active AI companies in the United Kingdom, this translates as just 32 companies trading in Northern Ireland.

The paper states: “Although the number of dedicated and diversified AI companies operating in Northern Ireland is relatively low by United Kingdom comparison, there is visible activity taking place across business, academia, and governments.”

Moreover, a study by the Whitehall Department for BEIS – dissolved in February 2023 – estimates that approximately 7 per cent of UK jobs face a high probability of automation over a five-year period; increasing to 18 per cent over 10 years and to just under 30 per cent after 20 years. It also noted that across the UK on average, AI was forecast to generate jobs through productivity and economic growth. Despite this projection, the study also acknowledges that there will be a “small decrease” in jobs within Northern Ireland specifically between 2021 and 2041.

The study also found that there would be a variation of AI’s impact on jobs on a sectoral basis. Net job gains were estimated in areas such as health and social work, professional and scientific, education, information and communication, and other sectors. Net job losses were likely in manufacturing, transport and logistics, public administration and defence, and wholesale and retail.

Uptake of AI in the public sector

An autumn 2023 National Audit Office survey of 87 UK government bodies found that 37 per cent had deployed AI at that point in time, with 82 per cent reporting their intention in the next 12 months.

Of the organisations that had deployed AI, 66 per cent had done so to support operational decision making, 59 per cent to support research or monitoring, and 59 per cent to improve internal processes. A smaller proportion of 19 per cent had deployed AI to directly provide a service to the public.

In January 2024, agendaNi asked Northern Ireland’s nine Executive departments and the Northern Ireland Office about their deployment of AI applications and if there are current guidelines in place regarding the use of AI.

The Northern Ireland Office responded stating that civil servants are “encouraged to use new technology that improves the productivity of government so we can deliver more for less”.

The Executive Office also stated that an “AI based tool is used to provide accurate subtitles to improve the accessibility of social media videos” and there is a “commitment to explore the benefits that can be derived from AI, while ensuring there is awareness of the associated risks”.

Furthermore, the only department at that time which stated that it was currently using AI was the Department for the Economy. The Department of Infrastructure did not reply to the request, and the remaining six outlined that they are yet to use AI.