Artificial Intelligence, an area of expertise for the French startups
The French startups set an example in the race for artificial intelligence (A.I.) as France is willing to become a leader in this field. Indeed, the stakes are huge with an increasingly growing market, a strong national dynamic and the ambition of President Emmanuel Macron to make France a “Startup Nation”. A.I. is more and more present in our lives today, whether directly on our smartphones, with virtual assistants or even in the field of services.
What are the opportunities and potential failures on this market for start-ups?
What is Artificial Intelligence?
To set up briefly the historical context, the A.I. is a research field born in the 1950’s with Alan Turing and other mathematicians and physicians. As for a definition, The Encyclopedia Britannica states A.I. as “the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings.”. Those tasks include, among others, visual perception, speech recognition, decision-making and translation between languages.
For a long time fantasized, artificial intelligence is increasingly gaining ground in our daily lives. With his assistant Siri, Apple quickly bet on the A.I. It was without counting on the other GAFA companies to follow in the footsteps of Google's personal assistants or Amazon with Alexa, to name but a few.
The stakes of artificial intelligence
Following the pace of the United States and China, France takes the plunge in the artificial intelligence as the French government launched its official A.I. research program in November 2018. If the French government has allocated this program significant resources, it is because A.I. represents power and economical stakes. Today, the government has a twofold objective: to make France one of the top five A.I. expert countries in the world and the leader in Europe.
States and compagnies are therefore competing with each other and multiple the declarations of their ambitions to become leaders in this sector and the means they plan to set up to win the race for A.I. This competition has become so intense that some experts in geopolitics have drawn parallels between the race for spatial conquest during the Cold War and the one for A.I. They state a « Sputnik moment » as the moment when each State rub bit in to surpass the presumed advance of the other ones. The United States are now facing China in the A.I. race as they faced the USSR during the spatial conquest of the Cold War.
In this « war for talents », France does not want to be left behind. Indeed, France has many talented persons, brilliant scientists, physicians and mathematicians but also many talented ones to come if they are trained correctly. This is why the ambition of Emmanuel Macron of making France a leader in A.I. is possible only by boosting researches. Thus, 1 billion euros will be invested in researches, coming both from the public and the private sector. Some selected faculties will receive investments to develop adapted teaching programs and to open 40 new research chairs. A part of those significant investments will be dedicated to buy new machines and supercomputers for researchers. In 2018, thanks to its renowned schools and its investments in A.I., France was chosen by the giant Samsung to set up its new artificial intelligence research center. A first victory.
Nevertheless, France is still significantly behind schedule faced with Internet giants like GAFA and BATX. Those compagnies have used A.I. to put the client relationship at the heart of their business and have now such an advance that it is impossible for France to catch up. The problem comes from the brain drain that France is witnessing with its best scientists and researchers moving to the USA or China to work for giant enterprises and the difficulties for the French enterprises to reach the critical size. Too many of them are too small to play a significant role, France needs internet giants like Google, AliExpress or Amazon.
The French startups in A.I., a huge potential…
In the French ecosystem, the startups play a leading role as they are the driving forces of the innovations. They develop A.I. in the automotive sector, with the autopilot, in the customer relationship with accurate chatbots, in the health sector with apps analyzing the global health of the body, or in the assurance field with efficient anti-fraud systems.
About 280 startups are specialized in A.I. and between 2015 et 2018, 845 million have been invested in those startups, four times more than the other startups. Thus, startups in the A.I. are all the rage. Not only do many fundraisings exceed 10 million euros but the average investment in the A.I. startups is 3 times bigger than the one for the other startups. Besides fundraising, the startups also benefit from a good follow-up. Indeed, France has the world’s biggest incubator: Station F.
They can also benefit from a special follow-up with big companies like Microsoft with the Microsoft A.I. Factory or Ubisoft, one of the video game world leaders. The initiative « France is A.I. » aims at promoting the French A.I. ecosystem, helping the startups to find fundraisings and making an annual conference. This ecosystem is one of the most dynamic in Europe as the French startups are numerous in this field. This sector is very promising, and the actors of this ecosystem do their best to succeed.
…Which could be better exploited
Yet, the French startups are too small actors to make a difference in front of big ones like the companies from the United States and China. Not only does this issue concerns France but also European countries that have a dynamic A.I. market like the United Kingdom or Germany. For now, the European A.I. ecosystem is limited to startups, without big companies.
The European ecosystem is under the absolute domination of the United States which gather half of the startups of the A.I. sector. Since then, the solution suggested by a Roland Berger survey would be for the European countries to team up on this strategic field instead of competing with each other and without cooperation. Indeed, the United Kingdom is willing to become the European leader in A.I. by making huge investments, coming from the public sector. Yet, the best strategy is for the European countries leader in the A.I. like Germany, France or the United Kingdom is to make common cause against USA and China. As the Brexit makes a collaboration between the United Kingdom and the other European countries quite difficult, the best solution for France would be to cooperate with Germany and share researches and crucial innovations. They have no other choice to succeed but to do it together.
The first step would be for the French and the German government to find an agreement on a common investment policy. They both have to boost their public financing but also to encourage their respective enterprises to invest in the artificial intelligence if they want to be key actors of the artificial intelligence and make their voice heard in the ethical debate surrounding the A.I.
The A.I. is now needed in every sector: industry, agriculture, medicine or fashion and attracts many entrepreneurs although the challenge is to build a viable project. Many entrepreneurs think they have found a groundbreaking app concept whereas their idea is not feasible with current technologies or would require colossal investments. The best way to develop such a project is to find actors that can guide you through your entrepreneurial journey. With forty years of proven experience, ESCadrille Toulouse Junior Conseil is used to help the entrepreneurs and enterprises to test the viability of their ideas and their potential economical success. We already worked for companies in artificial intelligence and we will be pleased to help you and your company to become part of this very promising and dynamic French ecosystem.
No one can ignore the growth of artificial intelligence anymore. With a Europe-wide collaboration, France could provide itself the means to achieve its ambitions and become a leading country in A.I. Watch this space...
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