AI in the Amsterdam Area generates five-fold return on investment, research finds
Every €1 invested in research and development in AI in the Amsterdam Area can generate more than €5 in economic prosperity in the long term, according to a study carried out by SEO Economic Research.
Strong returns on AI investment
AI in the Amsterdam Area has the potential to generate a five-fold return on investment.
The estimate is the outcome of a study of the R&D investments in AI (PDF), carried out by SEO Economic Research on behalf of the Amsterdam coalition AI Technology for People and Amsterdam Data Science.
It calculated that each euro invested by the government in R&D for AI can generate between €1.50 and €5.30 in the long run. The return depends on whether the project takes place in a geographical knowledge hub, whether the project is more fundamental or more applied, and what the adoption capacity of the application domain is.
The framework also includes an economic justification for public investments in AI – that the expected benefits to society exceed the costs. This is especially the case for fundamental research, which would not - or would find it very difficult to - get off the ground without public investment.
Lynda Hardman, manager Research & Strategy at CWI and director of Amsterdam Data Science, said the investment cycle begins with fundamental research: “The ecosystem strengthens itself by attracting and retaining top academic talent. This makes the region attractive for large companies but also for students. Highly educated graduates then participate in the ecosystem by either working for existing companies or beginning their own startups."
AI innovation in the Amsterdam Area
This drive in returns could be down to the scale and quality of research in AI within the Amsterdam region; there are four universities and research centres with dedicated AI faculties – UvA, VU, HvA and CWI – as well as academies giving students real-world practice.
In addition, industries for which AI is essential are strongly represented in Amsterdam, such as finance, tech, the creative industries and business services, and academic labs that work closely with industry are pushing applications to market faster.