In the last 12 months, the global legislative landscape in online safety has changed significantly with the introduction of landmark regulatory regimes. On 26 October 2023, the UK’s Online Safety Act received Royal Assent, placing legal responsibility on over 100,000 regulated services to prevent and rapidly remove illegal content – such as terrorist content and revenge pornography – making the internet safer for children and giving adults more choice over what they see online. In parallel, international progress on AI Safety, led in large part by the UK, has accelerated with the AI Safety Summit 2023 at Bletchley Park in early November 2023. 

On 13 November 2023, PUBLIC was delighted to host a roundtable discussion exploring the outlook for the online safety tech sector and its role in driving the ‘AI for Good’ agenda - referring here to the movement around leveraging AI to address wider societal challenges. PUBLIC’s CEO, Alexander de Carvalho, and our Director of Strategy & Transformation, Daniel Fitter, co-chaired this collaborative discussion which brought senior public sector leaders Emran Mian (Director General for Digital Technologies & Telecoms at the UK Department for Science, Innovation & Technology) and Fred Langford (Director of Trust & Safety at Ofcom) together with a range of investors and online safety tech industry leaders.

The discussion focused on sharing perspectives on how to best support this growing tech sector in the UK and globally from a policy, regulatory and investment perspective. By bringing together diverse voices, perspectives and levels of current engagement with the online safety tech market, PUBLIC facilitated a lively, thoughtful discussion producing several important takeaways for further consideration and future action.

‍

Key takeaways from the discussion

‍

1. The online safety tech sector can lead the way for ‘AI for Good’ in the UK (and in many ways, it already is)

While we’ve all been witness to the most recent wave of interest and energy around ‘AI for Good’ - with attention being rightly drawn towards how we can champion responsible, outcomes-based implementation of AI across different areas - the online safety tech sector has been doing this, as some might say, “before it was cool.” Online safety tech companies have been leveraging the power of AI to achieve positive outcomes for causes such as child safety, counter-terrorism, addressing online abuse and harassment, and combating online financial crime for many years, and the sector remains at the forefront of navigating the balance between AI’s potential for impact and the need for responsible, ethical use (e.g. Unitary, CheckStep, Cyacomb, SafeToNet).

As the sector continues to grow, AI will continue to play a crucial role in the effective implementation of the Online Safety Act. This sector's expertise in ensuring both the safe use of AI and ‘AI for Good’ positions it as a key player in informing future AI safety initiatives. A core agreement among the roundtable participants was that the online safety tech sector should be looked to as a leader, and for lessons learned, as we continue wider conversations around using AI responsibly to achieve positive outcomes for society.

‍

2. The UK as a global testbed for online safety technology and innovation

The UK has a unique opportunity to position itself as a testbed for online safety tech firms - incubating innovative companies building technologies which have the potential to achieve both impact and commercial success in international markets.

‍

“We are making huge strides in establishing the UK as the safest place in the world to be online, in the wake of Royal Assent of the Online Safety Act (OSA). The OSA gives us a framework through which we can think about things online that we would not tolerate on the street, and we need to consider the opportunity for technology to support this framework. I am encouraged by the continued growth in the online safety tech sector, and hope to see the UK continue as a testbed for innovation into the future.”

Emran Mian (Director General, Digital Technologies and Telecoms at DSIT)

‍

The growing demand signals and increasing revenue within the sector create an environment conducive to experimentation and innovation. The UK has an opportunity to incentivise research and development (R&D) efforts within online safety tech firms to address emerging online harms. However, vetted access to sensitive online harms datasets to train AI/ML solutions remains one of the most significant barriers to innovation and growth flagged by industry leaders. New solutions which enable better data access without compromising data security/privacy will be essential to unlock innovation in this market (e.g. Privacy-Enhancing Technologies) 

Going forward, Government should consider actions to refine product-market fit for global export to ensure solutions developed in the UK are applicable and scalable on a global scale while also ensuring compliance with regulation. This potential for growth beyond the UK market was also flagged as a key metric for attracting larger investor buy-in.

‍

3. There is work left to be done to translate interest into widespread investment in online safety tech

Investors who have yet to take a stake in a safety tech provider raised a number of core barriers to future investment:

‍

• Uncertainty around the customer for specific solutions: In addition to the demand push from new regulatory regimes, there is a need to demonstrate further to platforms the consumer demand for safer user experiences (note: this overlaps with the subsequent point on metrics).
• A lack of common, widely-available investor metrics for online safety tech: A key disconnect between larger investors and online safety tech suppliers is the misalignment between societal and commercial metrics of success, with the majority of companies in this sector being mission-led vs profit-led. This presents a challenge to more widespread investment, but there is scope to develop more quantifiable metrics which demonstrate the commercial viability and scalability of solutions in this space. Participants explored how we might measure the brand protection benefit of online safety tech products for platforms in terms of commercial (vs societal) impact, such as average revenue per user (ARPU) on safer, toxicity-free platforms.
• The need to address a global, not UK-only, market opportunity: The UK is a global leader in online safety legislation and subsequent private sector market growth, but a few investors flagged their caution around taking a parochial approach and the need for large total addressable markets. While the UK legislation and regulation around online safety is closely aligned with EU and broader international approaches, this concern highlights the need for patient capital - or as Chris Steed (Chief Investment Officer & Managing Partner, Paladin Capital Group) prefers to call it, ‘trusted capital’ - to provide long-term support for this global sector.

Industry representatives also laid out what new online safety tech startups need to thrive and grow in the UK:

‍

• The previously mentioned point on increased - and secure - access to data remains an essential ingredient for future growth.
• Broad support - from both industry and investors - for government-backed investment programmes such as the Enterprise Investment Scheme (EIS), in their ability to stimulate more private investment in this sector. There was also support for directing pension fund capital to startups in the sector.
• There was clear appetite for new online safety tech accelerators to provide more support and momentum for new UK-based solutions.
• Again from both industry and investors, there is widespread desire for a roadmap to be developed to encourage larger, multi-stage investors to enter the safety tech market to drive further growth.

The discussion highlighted the appetite for further engagement between industry and investors, in particular to help bridge existing gaps in market understanding and building alignment on success metrics.

PUBLIC continues to support the growth of the online safety tech sector in the UK and globally as part of our work on online safety and AI. Specifically, we are keen to identify funding and partners to take forward a few of the ideas proposed in this discussion, in particular creating an online safety tech investor roadmap. Please reach out to Daniel Fitter or Maya Daver-Massion if you’re interested in working with us on this project.