Artificial Intelligence Diffusion Through the UK’s Knowledge Transfer Partnerships Programme

Artificial Intelligence (AI) is rapidly changing how organisations innovate, make decisions, and develop products and services. Although its impact has accelerated in recent years, industry adoption has actually unfolded over decades. Studying this evolution reveals how businesses have adopted AI but, more broadly, provides insights into how disruptive frontier technologies move into industrial use. However, opportunities to examine such major technological transitions over extended periods are rare.

For more than 50 years, Innovate UK’s Knowledge Transfer Partnership (KTP) scheme has helped transfer academic expertise into industry, particularly to small and medium-sized enterprises (SMEs), through a broadly consistent, demand-led funding model. This report examines KTP projects awarded between 2007 and 2021, tracing the shift from computationally intensive projects to projects explicitly focused on applying AI. Over this period, the number of AI-focused projects increased fivefold, while their technical sophistication grew and participation broadened across regions, knowledge organisations, and businesses of different sizes.

The findings show that records from open innovation programmes can provide early indications of industry demand for emerging technologies, while there is still time for policymakers and programme designers to respond. They also highlight four policy priorities: developing domain-specific expertise across a wider range of knowledge organisations; continuing to support frontier technologies as adoption grows; extending support to smaller firms and more regions; and creating follow-on pathways that help organisations retain and reuse newly acquired capabilities.

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