Nordic State of AI - Central Observations 5/5: AI Readiness

Nordic AI Readiness: Bridging the gap between government and industry

AI has emerged as a pivotal technology revolutionizing industries and shaping the future of economies. As nations vie for technological supremacy, AI readiness becomes a critical benchmark for evaluating the potential to harness AI's transformative power. 

In this five-part blog series, we will dive into the central observations of the Nordic State of AI report, an annual report examining AI adoption across leading Nordic multinational companies by surveying their current use of AI. In this fifth and final part, we will give a comprehensive overview of AI readiness in the Nordic countries, highlighting strengths, challenges, and opportunities related to it. 

AI readiness refers to the extent to which a country, organization, or sector is prepared to adopt, implement, and scale AI technologies effectively. This readiness includes factors such as infrastructure, talent, regulatory frameworks, and cultural attitudes toward innovation. High AI readiness indicates a robust ecosystem that can support the seamless integration of AI into various facets of society and business.

The Nordic AI Paradox: High public readiness, lower integration  in the tech sector

The Nordic countries – Denmark, Finland, Iceland, Norway, and Sweden—are often lauded for their high quality of life, strong educational systems, and innovative economies. According to the Nordic State of AI report, these countries generally score high on AI readiness, particularly in the public sector, which has been proactive in adopting AI to enhance public services and governance.

The Nordic region's public sector has demonstrated significant AI readiness, with all countries except Iceland ranking in the top 15 of the Government AI Readiness Index by Oxford Insights​​. This strong performance is attributed to strategic investments in digital infrastructure, comprehensive data policies, and a forward-thinking approach to AI governance. Finland, notably, is ranked 4th globally, reflecting its commitment to leveraging AI for the public good.

Despite high readiness scores in the public sector, the Nordic technology sector faces challenges. The report highlights a gap between government readiness and technological implementation within industries. While the Nordic countries score 5 points higher in governmental readiness compared to the USA, they lag by a whopping 23 points in technology implementation. As mentioned earlier, Nordic companies are experimenting with AI in the early stages of adoption, focusing on short-term efficiency gains rather than integrating AI into the core of their business operations.

“The big part of why Nordic tech companies are falling behind the US is the lack of ambition, desire to take risks, and the uncertainty of AI’s future.”‍

‍Niko Vuokko, PhD, CTO, Silo AI

Challenges in industrial AI readiness

Nordic companies face several challenges in achieving AI readiness in the industrial sector. A major issue is the decentralization of AI projects, which leads to inconsistent data management practices and hinders scalability. Additionally, the lack of clear frameworks for assessing AI project success, such as ROI metrics, results in uncertain outcomes and reduced confidence in AI investments.

Investment priorities also pose a challenge, with companies focusing more on training and competence development than on recruiting new AI talent. This trend may limit the infusion of fresh perspectives and skills necessary for AI growth.

Regulatory compliance, particularly with the EU AI Act, requires significant resources but offers a strategic advantage through early compliance efforts. Companies must balance these demands to effectively navigate the regulatory landscape.

To enhance AI readiness, Nordic companies need cohesive data management, clear evaluation frameworks, balanced investment in talent, and proactive regulatory compliance. Addressing these issues will enable better AI integration and competitive advantage.

How to enhance AI readiness?

The report and its findings showcase recommendations for bridging the gap between high public sector readiness and lagging industry adoption:

• Develop Comprehensive AI Strategies: Companies need clear, long-term AI strategies that align with their business goals and have the buy-in of their leadership team. These strategies should include detailed roadmaps for AI integration, covering technological and organizational changes.

• Enhance Data Management Practices: It is essential to establish shared practices for data management. Companies must invest in strong data infrastructure and adopt standard data governance frameworks to ensure data quality and accessibility. Shared data practices also reduce the investment needed for each AI project compared to setting up individual systems for each project.

• Focus on Core Business Integration: Rather than viewing AI as a tool for isolated projects, companies should integrate AI into their core operations and products. This approach will help achieve sustainable competitive advantage and higher returns on AI investments.

• Foster AI Literacy Across the Organization: Building a baseline level of AI literacy among non-technical staff is essential. This knowledge will enable better collaboration between technical and domain experts, enhancing the overall effectiveness of AI initiatives.

• Leverage Public-Private Partnerships: Given the high readiness in the public sector, private companies should seek partnerships with government entities to leverage public sector expertise and resources. These collaborations can accelerate AI adoption and innovation.

Toward AI readiness: The Nordics are well positioned, but a concentrated effort is necessary

Thanks to their strong public sector readiness and innovative culture, the Nordic countries are well-positioned to lead in the global AI landscape. However, to fully capitalize on AI's potential, a concerted effort needs to be made to address the challenges within the technology sector. 

By developing comprehensive strategies, improving data management, and fostering a culture of AI literacy, the Nordic region can enhance its AI readiness and secure a competitive edge in the digital age.

The journey toward AI readiness is complex and multifaceted, requiring continuous adaptation and learning. The insights from the Nordic State of AI report provide a valuable roadmap for navigating this journey, ensuring that the Nordic countries remain at the forefront of AI innovation and implementation.

The annual Nordic State of AI report provides an overview of the use of artificial intelligence in the Nordic region, with the goal of offering business leaders, academics, policymakers, as well as anyone interested, a comprehensive view of the latest changes and developments in Nordic AI.