1. Introduction
This article examines how artificial intelligence and the metaverse can revolutionize service innovation by providing fresh ways to improve client interactions and operational effectiveness. Also, AI technology constitutes one of the pivotal elements of the fourth industrial revolution, precipitating societal transformation and emerging as a significant force in propelling economic development and reconfiguring service innovation [1]. The HFTP is a special economic zone, established by China in the province of Hainan, that is closely associated with innovations in AI [2]. The HFTP aims to comprehensively establish itself as a high-level free trade port with significant international influence by the mid-twentieth century. More importantly, the HFTP places great emphasis on developing service trade, aspiring to promote high-quality economic growth through more open and flexible policies for service innovation, and constructing a high-level, digitized, and intelligent special economic zone. The HFTP offers an ideal environment and policy support for service innovation and transformation. As articulated in the policy document ‘Overall Plan for Smart Hainan (2020–2025), the HFTP is fully committed to building a new type of intelligent island characterized by international openness and interconnectivity, efficient data sharing, refined and innovative governance, convenient and inclusive services, and the organic integration of the physical economy with the digital economy [3]. For the HFTP, innovation in AI products and services is an effective tool to enhance corporate competitiveness. All industries are undergoing innovation and transformation from the physical to the virtual world. Traditional manufacturing industries arranged around products are transforming the utilization of intelligent product service systems, creating, delivering, and capturing value through high-quality AI services [4].
The Hainan Free Trade Port Era means transforming Hainan Province in southern China into a free trade hub that is important to the world. Initiated in 2018 and 2020, China’s plan intends to turn Hainan into a free trade port before 2035 while promoting free trade, investment, and cross-border capital flow. The core aim is to reduce tariffs, relax market access, and create a law-based international business environment. The Hainan FTA is an integral part of China’s comprehensive policy on its integration into global markets, giving a new impetus to economic cooperation with the whole world, particularly within the framework of the Belt and Road project, given the innovations, tourism and high-tech industries of the region.
The initial issue, pertaining to the transformation of enterprises towards the HFTP, implies that the primary concern or emphasis of the debate is how businesses adapt or change regarding the Hainan Free Trade Port (HFTP). These enterprises are direct actors in the innovation process of AI products and services [5]. The development of artificial intelligence has progressed from a model suitable for a single task to a model and system that can be flexibly applied across domains and across industries. This technology is becoming more and more popular. Between 2015 and 2023, global venture capital investment in AI start-ups soared from USD31 billion to USD98 billion. Moreover, the worldwide investment in generative AI has soared from USD1.3 billion in 2022 to USD17.8 billion. However, most start-ups may develop slowly due to their small scale and lack of funds, which are the reasons these start-ups lack sufficient resources to create models [6]. However, HFTP enterprises may lack the capital and technology to innovate AI products and services. For instance, traditional enterprises in the HFTP lack awareness of AI technology and do not possess the consciousness to utilize technologies such as AI, cloud computing, or big data to reduce costs and enhance efficiency [7]. However, at the same time, AI technology also needs strict supervision [8]. OECD attaches great importance to the governance of artificial intelligence. The OECD Principles on Artificial Intelligence were adopted by the OECD in 2019 and updated in 2024. These principles support AI that is innovative, trustworthy, and respectful of human rights and democratic values.
Located at the forefront of China’s economic reform and opening up, Shenzhen is an essential case for understanding global trade and innovation in the Hainan Free Trade Port context. As one of the earliest special economic zones, it has grown into an international technological hub, leading dynamic trade, finance, and technology development. This transformation has shown how free trade policies and economic reforms can quickly spur regional growth. Hence, this makes the case highly relevant for understanding what might occur in Hainan under similar policies. The UK was selected for inclusion in this study because of its global status as a power in trade and leadership in terms of providing scientific and legal frameworks. We stand to benefit from insights into the regulatory framework that underpins free trade; the UK holds particular significance due to its history of leading international best practices in trade and higher legal standards. This makes its experience with international trade agreements, challenges emerging in the post-Brexit environment, and economic policy reforms highly relevant to the goals of the Hainan Free Trade Port in terms of establishing a competitive and law-based international trading environment.
The current legal agenda for innovation in AI products and services is lacking in the HFTP, which is detrimental to innovation and transformation, as shown in Figure 1. The reason is that innovation in AI products and services signifies a progression towards a higher level of AI application, necessitating a more advanced and comprehensive legal system [9]. The decision-making autonomy of AI technologies has diminished human control over AI, making it challenging to assess the potential risks posed by AI comprehensively. AI technology has resulted in welfare benefits in some areas, yet it has also introduced issues in relation to data privacy, security, discrimination, and transparency [10]. In this regard, it is paramount that the government provide a comprehensive and advanced regulatory framework for AI [11].
The matter at hand concerns businesses’ adherence to the law in Hainan Free Trade Port. Technology based on artificial intelligence has several benefits and the potential to increase service industry productivity. Cross-domain business models and integrated legal regulation and compliance with the invention of AI goods and services in the HFTP can lead to better innovation outcomes. For businesses, however, maintaining compliance with changing legislative frameworks in the HFTP presents a difficulty. It is challenging to keep regulations up to date with the rapid advancements in AI, which causes a gap between innovation and compliance. Businesses may have trouble adhering to complicated legal obligations, such as data protection, intellectual property rights, and the moral implications of using AI. However, following a robust legal agenda may help businesses gain the trust of investors, customers, and government agencies. Sustainable growth requires striking a balance between innovation and legal compliance, as breaking the law can lead to penalties, harm to one’s brand, or even removal from the market. For businesses to prosper in the HFTP, they must thus take a proactive approach to incorporating legal compliance into their innovation processes and intertwine legal regulations and compliance with the innovation of AI products and services in the HFTP.
Many authors have researched AI and HFTP, but few scholars have combined the two for further study. The uniqueness of this study lies in its focus on the innovation of AI products and services in the HFTP and its research from the perspectives of enterprise transformation and law, which differs from other achievements. Both AI products and service innovation, as well as the HFTP, are hot topics. The HFTP is an important element of China’s development strategy and an essential hub of the BRI. The HFTP aims to build the world’s largest high-level free port. We conduct an in-depth analysis to understand this issue from a theoretical perspective. From a practical perspective, this article guides governments and companies on the innovation of AI products and services, especially in terms of policy, legislation, and enterprise management. In addition, it will help to improve AI products and service quality, as well as the economic development of the HFTP.
2. Conceptual Framework
2.1. Research Synthesis Concepts Related to AI Products and Service Innovation
AI is regarded as a subdiscipline of computer science, and refers to a series of systems endowed with human-like capabilities capable of performing specific roles and tasks. Artificial intelligence-related technologies encompass a range of techniques, including machine learning, deep learning, natural language processing, and robotics [12]. AI products and service innovation are founded upon the foundation of AI technology. The innovation in artificial intelligence-based products and services broadly encompasses three components. The first involves integrating AI services into products. The second entails embedding AI products within services, as shown in Figure 2. The third aspect is using AI technology to reduce operational and managerial costs [13]. The aim of integrating AI services into products is to transition from product-centric to service-innovation-centric innovation models [14]. Integrating AI products into services is commonly employed in healthcare and hospitality. For instance, service robots in hotels are utilized to enhance the level of service provision and to increase the frequency and efficiency of communication with customers. From a development perspective, artificial intelligence can be divided into three types: perceptual intelligence, cognitive intelligence, and decision-making intelligence. Perceived intelligence endows artificial intelligence with visual and auditory abilities to recognize objects or speech. Cognitive intelligence provides better abilities for induction, reasoning, and acquiring knowledge. Decision intelligence can be used to make optimal plans, i.e., decision support. The application and innovation of artificial intelligence are affecting various industries [15]. An empirical study on 391 small- and medium-sized enterprises in developing countries shows that artificial intelligence can significantly promote the development of enterprises and economic progress by changing service models and promoting product upgrades and operational models [16]. Narrowly defined, innovation in AI products- and services encompasses solely integrating AI services into products [17]. Integrating AI services into products emphasizes creating customized products and services based on a solution-oriented service model, further enhancing the value of the products and services. Innovation in AI products and services encompasses not only innovation in AI products and services, but also focuses on integrating the two, with the service aspect of AI serving as the medium for innovation [18].
2.2. Corporate Transformation Through AI Product and Service Innovation
Product and service innovation emerged as a crucial pillar for enterprises in the Industrial Revolution. AI’s significance in facilitating product and service innovation is extraordinary. It can provide customers with an enhanced product experience and service experience. The fundamental characteristic of AI product and service innovation lies in establishing a product–service system that bundles products and services to offer users a comprehensive solution. Furthermore, intelligent customer service supported by natural language processing and deep learning technologies via, a language model can provide users with 24-h intelligent services, effectively enhancing user satisfaction [19]. However, this necessitates a high level of AI; the Amazon platform utilizes the Internet of Things, big data analytics, and AI technologies to construct an intelligent e-commerce supply chain, extensively employing robots, sensors, and other AI products [20]. This facilitates the simplification and upgrading of corporate business processes. AI services, as a subset of services, can be integrated into other product manufacturing and service industries, thereby enabling the intelligent transformation and upgrading of enterprises [21]. AI technology can, to a certain extent, substitute for human labor through perception, learning, decision-making, and the implementation of actions [22]. Automating processes enables the automatic execution of routine tasks, reducing labor costs and enhancing work efficiency. The production quality is monitored in real time through image recognition and sensor data analysis, reducing the scrap rate [23]. The benefits of AI for productivity improvement, enterprise innovation, and economic development are apparent. Moreover, from a macro perspective, AI will significantly improve a country’s or region’s economic level. For example, for India, AI has substantially increased India’s economic potential. It is estimated that, by 2030, AI will contribute UED 360 billion to USD460 billion to GDP in India [24]. The implementation and impact of artificial intelligence technology worldwide are crucial to driving it effectively internationally. A study on Africa, Asia, Latin America, the Middle East, and the United States indicates that artificial intelligence may infringe upon sensitive data, create discrimination, and exacerbate the digital divide and inequality in international communities [25].
2.3. Legal Regulation of AI Product and Service Innovation
AI product and service innovation and corporate transformation signify the application of AI technology on a broader scale and at a deeper level. The OECD pointed out that AI has been widely used in transportation, agriculture, finance, marketing, advertising, science and technology, health, safety maintenance, government management, and many other fields [26]. Furthermore, AI technologies, such as AI chips, the intelligent recognition of visual and auditory information, intelligent robots, the metaverse, and cognitive neural network models, among other technologies, are continuously evolving and upgrading in response to the needs of enterprises. The risk of legal regulation becomes more pronounced in the innovation process of AI products and services due to the increased involvement of technology and an increased amount of data. The primary aspects of legal regulation concern data privacy, data security, discrimination in AI, unfair contract terms, jurisdictional conflicts, and attribution of responsibility, among others. This is shown in Table 1 [27]. Empirical research conducted by the World Bank indicates that investing in research and development is crucial for developing artificial intelligence. The rapid growth of artificial intelligence in South Korea is due to the robust incentive system and financial support for artificial intelligence companies. Moreover, strong policy support for artificial intelligence from the South Korean government and stakeholder cooperation are also crucial. As of January 2024, the South Korean government has invested USD1.59 billion in artificial intelligence training datasets. This has been put towards incentives for private companies and establishing artificial intelligence foundations. The South Korean government has also established an artificial intelligence center to ensure solid public–private partnerships. As of April 2022, the artificial intelligence Center has provided 191 high-quality AI training datasets. As of June 2021, the artificial intelligence center has provided 381 types of learning data. These datasets and learning data support the development of artificial intelligence [28]. An empirical study by the OECD shows that Germany has made significant achievements in domestic and international legislation on artificial intelligence. Moreover, by 2025, Germany aims to enact a federal regulatory sandbox law to test artificial intelligence and prevent risks. Germany was the first country to release an artificial intelligence strategy and is committed to implementing the regulatory principles of the OECD and the EU on artificial intelligence. Transparent, fair, and effective legislation provides the foundation for developing artificial intelligence in Germany. As an international organization, the EU also provides an excellent international cooperation platform for developing artificial intelligence in Germany [29]. Another empirical study by the OECD on Egypt suggests that business compliance with artificial intelligence is crucial. Even with government incentives and support, companies must respect privacy, protect data, and avoid discrimination when developing and applying artificial intelligence. The OECD indicates that overly strict government compliance requirements may pose difficulties in business development. Therefore, it is necessary to evaluate the impact of compliance requirements on enterprises through sandbox mechanisms [30].
Consequently, various countries have introduced multiple laws or policies about AI, among which the most notable are those of the European Union (EU), China, and the United States, as shown in Table 2. The EU AI Act aims to establish a comprehensive legal framework to regulate the development and use of AI, ensuring its safety and transparency while promoting innovation. Additionally, the EU has established the European Commission on AI, which is tasked with overseeing the implementation of the Act and collaborating with national authorities. Member states must also designate one or more national authorities to supervise compliance with their respective national AI legislations [38]. China has introduced various regulations and policies, such as Deep Synthesis Management Provisions and Interim Measures for the Administration of Generative AI Services. In contrast to the EU, China lacks unified legislation on AI, and has thus failed to establish a practical legal framework. The United States, as a developed nation in terms of AI, has not promulgated unified AI legislation but has formulated partial AI legislation applicable to specific domains. The US has also introduced local regulations and policies, such as Maintaining American Leadership in AI, The National AI Research and Development Strategic Plan, and the California AI Transparency Act.
2.4. The Hainan Free Trade Port of China
The HFTP is China’s largest special economic zone and a crucial component of its strategic layout. Since 2018, it has been progressively established and has become the largest free trade port in the world. According to national economic policies, an opening-up strategy of more proactive implementation should be adopted, for example, building a network of high-standard free trade zones oriented toward the global market and accelerating development in pilot free trade zones like the Hainan Free Trade Port. The joint construction of the BRI has become a highly welcomed international public good and a platform for international cooperation [39] on AI, blockchain, and digital trade [40]. In 2022, the total revenue of the digital industry in Hainan Province reached CNY1279.6 billion, constituting a significant portion of the province’s GDP and representing a year-on-year growth of 5.55% compared to 2021 [41]. Furthermore, the Master Plan for Smart Hainan (2020–2025) underscores the significance of AI for the HFTP. The plan indicates the utilization of next-generation information technologies such as 5G and AI for application innovation and digital industry projects, including aerospace technology, smart tourism, agricultural big data, 5G+ telemedicine, and education [42]. This strategy aims to establish a foundational service system for big data, AI, and blockchain. The development of multilingual AI shopping companions is also envisioned, facilitating personalized and precise marketing targeted at global tourists. Support is provided for compliant enterprises to offer online services such as artificial intelligence-based medical consultations. Additionally, assistance is given to exhibition companies in creating brilliant exhibition halls, e.g., by flexibly employing technological means such as AI and 3D surround-view navigation to enhance the interactive exhibition experience [43].
3. Research Approach
This research approach explores corporate transformation, legal regulation, and compliance issues related to creating innovative AI products and services in the Hainan Free Trade Port. In this light, this research purports to clearly delineate the role of AI innovation within the HFTP and then prescribe pathways for corporate adaptation and legal compliance within a regulatory environment that has been brought to a state of flux. Data collection in this study was performed through a targeted literature review approach. The literature identifying themes and trends has been analyzed, including academic journals, legal texts, research articles, research reports, policies, and case studies. These gave the researchers comprehensive information on trade alteration and regulatory challenges in AI innovation [44]. The actual collection was performed in a manner that considered ethical and legal principles to preserve privacy and compliance. The materials used to develop a systematic framework for appraising corporations’ transformations and associated legal regulations within the HFTP were from credible channels. The researchers also identified the existing lacunas in corporate practices and regulatory frameworks, establishing a mode of compliance that would effectively innovate AI products and services. The insights gained provides practical recommendations for policymakers, scholars, and businesses to improve the general regulatory environment for AI innovation in the HFTP [45]. This article also provides a research method for setting hypotheses and logically verifies them using theoretical knowledge and empirical results. This article provides empirical evidence on the relationship between the innovative development of artificial intelligence in the Hainan Free Trade Port and legal regulation, corporate compliance, and policies and conducts an extensive literature review.
The Hainan Free Trade Port can promote the transformation of enterprises through the release of policies, management, and cooperation with enterprises.
Both government policy support and the internal management of enterprises may benefit the innovation and transformation of artificial intelligence products and services in the Hainan Free Trade Port [46].
The Hainan Free Trade Port can prevent the legal risks that artificial intelligence presents by formulating domestic laws and concluding international laws.
Whether engaging in international cooperation or refining domestic laws, the Hainan Free Trade Port should conduct thorough risk assessments and research before legislating and avoid hastily enacting laws that could undermine public trust in AI products and services [47].
Enterprises in the Hainan Free Trade Port can prevent the legal risksthat artificial intelligence presents by complying with laws and by compliance management.
Effective data quality management within a company can ensure data quality during the data collection and preprocessing stages, preventing the algorithm bias caused by data issues [48]. The transparency and fairness of company contract terms are also essential, and vague and ambiguous terms must be avoided [49].
The main objective of this article is to explore the innovation of AI products and services in the HFTP. The supporting objective is to start from the theory and practice of AI service and product innovation and propose a path for the innovative development of artificial intelligence based on the situation of the HFTP. The article emphasizes the challenges enterprises face in developing AI products and services in the HFTP, including transformation issues, legal risks, discrimination risks, and compliance risks. Corresponding countermeasures are proposed based on these challenges.
3.1. Results
International data from different countries are presented in Table 3, illustrating the AI preparedness index. The AI preparedness index measures a country’s ability to use AI through four criteria. The four standards are digital infrastructure, human capital and labor market policies, innovation and economic integration, and regulation. China’s AI preparedness index is 0.635, which is lower than that of Denmark, the United States, Australia, Japan, and other countries. China’s AI has advanced, but there is still room for progress. However, some Asian and most African countries perform well in AI. The AI preparedness index of South Africa is only 0.496, of the Philippines is 0.498, and of Cambodia is 0.369. As a particular economic region of China, the HFTP has significant artificial intelligence means to develop further and fully cooperate with worldwide AI products and services [50].
The development of AI in some countries is based on assessing the IMF AI preparedness index. It can be found that China, Singapore, the United States, and Japan are at an advanced level. However, China’s AI preparedness index is not as high as expected, although it is better than that of African countries in all aspects. China’s AI is generally good at innovation, economic integration, human capital, the labor market, and regulatory policies. In these aspects, Switzerland, Japan, Singapore, Denmark, Finland, France, Germany, and the United Kingdom performed better, as shown in Table 4. The evaluation factors of the AI preparedness index can fully show the potential and sustainable development ability of a country’s AI development. As a big country in the artificial intelligence field, China should advance become a powerful country in terms of artificial intelligence. Therefore, when carrying out AI product and service innovation, the HFTP should pay full attention to innovation, economic development, human capital utilization, labor market policies, and supervision. This can drive the growth of local AI product and service innovation in the HFTP and help set an example for international cooperation and technical assistance to improve the country’s indicators [51].
Key approaches are shown in Table 5, which compares the many features of AI products and their effects on different industries. Between 2014 and 2023, the global AI products market grew astoundingly, rising from been worth USD4.8 billion to USD86.7 billion. AI applications in healthcare soared from USD600 million to USD21.4 billion in this vast terrain, while the technology of autonomous vehicles saw a sharp increase from USD400 million to USD24.5 billion. Significant progress was also made in the cybersecurity industry, which grew from USD1 billion to USD40 billion, highlighting AI’s crucial role in protecting digital environments. AI’s market value grew from USD1.5 billion to USD35.5 billion in finance. AI businesses skyrocketed from 2000 to over 11,000, corresponding with a USD3 billion to USD92 billion jump in funding and innovation. AI is anticipated to generate over 97 million new jobs by 2023 [52].
3.1.1. AI Investment in Shenzhen
Shenzhen is one of China’s most critical areas for AI innovation and development, as shown in Figure 3. The total amount of AI financing in Shenzhen, China, increased rapidly to its peak from 2013 to 2015. This was a period of rapid expansion for the AI market. The total amount of AI financing in Shenzhen, China, fluctuated from 2015 to 2018 and declined slightly from 2017 to 2019. That means that, after experiencing the investment frenzy, investors gradually became rational. According to the analysis of the number of financing events from 2019 to 2023, the total number of AI investment events is still considerable. This means that, after the rapid development of AI, investors have gradually become rational and cautious. However, it can be seen from the data that investors’ enthusiasm for AI investment still exists [53].
3.1.2. Forecasts of the UK Government
The UK government makes estimates on the development of AI. Based on the data before January 2022, the UK has forecasted the labor expenditure of AI UK from 2020 to 2040, as shown in Figure 4. This prediction distinguishes three cases. In the upside scenario, by 2024, Britain’s AI labor expenditure will increase to GBP 456 billion, with an annual growth rate of 12.1% In the central scenario, Britain’s AI labor expenditure will increase to GBP 304.2 billion, with a yearly growth rate of 9.9%. In the downside scenario, the UK’s AI labor expenditure will also increase to GBP 185.2 billion, with an annual growth rate of 7.2%. Therefore, the rapid growth of AI between 2020 and 2040 has been widely recognized [54].
3.1.3. The Market of Economies
The market of economies classifies advanced and emerging market economies, as shown in Figure 5, and low-income countries, and illustrates the AI preparedness index of the three groups. It can be found that the AI preparedness index of advanced economies is the highest, the index of emerging market economies is in the middle position, and the index of low-income countries is the lowest. As a member of the emerging market economies group, China is expected to fully tap into the potential of the Hainan Free Trade Port to promote international cooperation in AI, share advanced experience with the emerging market economy, and provide technical assistance and investment to low-income countries. This would enable China to play a vital role in promoting global innovation and development [55].
3.1.4. AI Investment Worldwide
From 2012 to 2022, as shown in Figure 6, the global investment in AI began to spiral up, from 2016 to 2021 in particular, after which the global investment in AI spiraled down. This means that the development of AI has gone through a period of barbaric growth and gradually entered the stage of AI governance, which includes paying attention to privacy protection and eliminating AI discrimination. Moreover, investors have gradually become cautious and rational. In addition, AI investment, as shown in Figure 5, is in the realm of sustainable development and environmental protection. The HFTP is famous worldwide as a high-level environmental protection free trade port. Artificial intelligence development is consistent with the goal of the HFTP. The use of AI product service innovation to empower enterprises in the free trade port is conducive enhancing to the purpose of the HFTP by establishing a high-level service trade area [56].
3.1.5. Development Trends of AI Products
Generative AI is the future development trend of AI. HFTP AI product and service innovation must also rely on and develop generative AI. As shown in Figure 7, global investment in generative AI peaked in 2019 and then declined sharply. However, it is worth noting that, since 2022, the investment in generative AI has soared. In 2023, the investment in generative AI declined.
3.1.6. HFTP: China’s Development Space for AI Products
The total global investment in AI and venture capital is concentrated in the following sectors, as shown in Figure 8. The first is software development and maintenance, including digital security sensors, hardware, infrastructure, and managed services. Secondly, AI technology is widely used in traditional industries, such as logistics, wholesale and retail, financial and insurance services, business processes and support services, medical care, pharmaceuticals, and biotechnology. Third, AI technology has also vigorously entered emerging industries, such as robotics, media, social platforms, marketing, mobile devices, and self-driving cars. Providing investment opportunities for AI products and service innovation in the HFTP will provide more development space for the development of AI products and service innovation by reducing the entry threshold and simplifying administrative procedures [57].
4. Analysis and Discussion
The HFTP in China must foster economic development, employment, and investment by advancing AI product and service innovation. The primary reason is the emphasis placed by the HFTP on the development of trade in services. Unlike traditional free trade ports, the HFTP focuses on sustainable development as its objective, leveraging trade in services to drive economic growth and employment. Examples include the tourism industry and the digital economy [58]. The HFTP Law serves as the fundamental basis for establishing the HFTP and forms the foundation of its institutional system. As emphasized in the HFTP Law, the port supports the construction of an open, ecological, service-oriented industrial system, modern services, and high-tech industries. The HFTP applies a negative list management system to cross-border trade for services, accompanied by a supporting system for the payment and transfer of funds. Cross-border trade in services not on the list is managed under the principle of internal and external consistency [59]. From a legal perspective, AI may infringe upon consumers’ rights to knowledge, autonomy, and information processing, among others [60]. Consumers possess the right to comprehend the decision-making processes of AI systems, the information collected, and how such information is utilized. Furthermore, consumers should have the right to use AI to exercise their autonomy rather than being passive recipients of AI systems [61]. When AI products are used with AI services, consumers’ awareness of their rights, data usage conditions, and autonomy may be more severely compromised [62]. Integrating smart devices with data analytics services may result in diminished data collection and utilization transparency, thereby challenging consumers’ right to be informed [63].
The second reason is that the HFTP provides highly favorable conditions for developing AI products and service innovation. Initially, the HFTP attracted foreign talents and investments through preferential tax measures and simplified investment procedures. The HFTP applies a pre-establishment national treatment plus a negative list management system for foreign investment, with exceptions for areas under essential state control [64]. The HFTP Law stipulates that the port encourages establishing a free, convenient, secure, and orderly data management system to promote the openness and development of the data sector. It provides a foundational legal basis for the innovation of AI products and services, as shown in Table 6. The legal context encompasses a variety of domains, including the attraction to the facilitation of the digital industry’s development, intellectual property protection, tax incentives, and the attraction of talent residency.
Examining existing academic achievements, some have already researched the Hainan Free Trade Port. For example, there is research on the e-commerce and supply chain information services of the Hainan Free Trade Port [65], research on the cross-border data flow of Hainan Free Trade Port, etc. [66]. There are also achievements in research from the perspective of Hainan Free Trade Port’s big data platform and digital services [67]. There are also some achievements in the research of artificial intelligence, such as the application of artificial intelligence in medicine [4] and education [68]. The research in this article takes a different approach. The research results are scientifically relevant because this article combines the development of the digital economy in the Hainan Free Trade Port with the innovation of artificial intelligence products and services. Moreover, exploring the relationship between the Hainan Free Trade Port and innovation in artificial intelligence products and services from a new legal perspective endows scientific research with solid relevance. It expands the network of high-standard free trade zones worldwide. This means that the Hainan Free Trade Port is an essential decision in China’s national strategy and plays a critical role in the future development of China’s economy.
The Hainan Free Trade Port does not rank high in terms of artificial intelligence industry development among various provinces, municipalities, and autonomous regions in China, but ranks low. This means that the development of the artificial intelligence industry in Hainan Free Trade Port is far inferior to that of internationally advanced cities such as Beijing and Shanghai, as Table 7 shows.
The top ten provinces (cities) in terms of industrial attractiveness in artificial intelligence are Beijing, Shanghai, Guangdong, Zhejiang, Jiangsu, Shandong, Anhui, Tianjin, Hainan, and Gansu. This means that although the artificial intelligence industry foundation of the Hainan Free Trade Port is currently weak, prospects are very objective. This is because Hainan Free Trade Port aims to build a national first-class free trade port, with service trade as its pillar industry. In addition, the business environment of Hainan Free Trade Port is constantly improving, as shown in Table 8.
4.1. Challenges Faced in AI Product and Service Innovation Enterprises in Transitioning HFTP
Enterprises will face challenges in the process of transformation to AI product and service innovation. The initial challenge is that enterprises in the HFTP may lack the financial resources and expertise to utilize AI technology [69]. The most pronounced challenge in deploying AI products and services stems from limited funding, skills, and expertise. According to the statistics and analysis of the Ministry of Industry and Information Technology of China, the penetration rate of artificial intelligence technology in small and medium-sized enterprises in China is currently 40%, and 60% of these enterprises have not used AI technology. This is mainly limited by capital, technology, talent, and other conditions [70]. The Gross Domestic Product (GDP) of Hainan Province is CNY 7551.18 billion [71], whereas the GDP of Guangdong Province in the same year amounted to CNY 13.57 trillion. The GDP of Shandong, Zhejiang, and Sichuan in 2023 surpassed CNY 9 trillion, CNY 8 trillion, and CNY 6 trillion, respectively [72]. However, it is commendable that the economic growth rate of Hainan Province ranks at the forefront in China, with a year-on-year increase of 9.2% in 2022, significantly higher than the national average [73]. Regarding technology and talent, Hainan Province is confronted with a shortage of skilled personnel. As of 2020, the proportion of individuals in Hainan Province with a university education or higher was only 13.92% [74]. This may result in talent scarcity for AI products and service innovation [75].
4.2. Legal Risks of AI Product Service Innovation in Terms of Data Management in the HFTP
AI technologies inevitably involve the collection, storage, utilization, and processing of vast amounts of data, which may raise issues of data transparency, security, and transnational jurisdiction [76]. Compared to singular AI products or services, the innovation of AI products and service complexes presents more significant data risks, particularly in healthcare, education, and finance [77]. The primary reason is that the interaction and integration of AI services with AI products often involve integrating and sharing data across products and services from different domains and platforms [78]. This innovation across products and services will usher in increasingly complex data challenges, necessitating the resolution of issues regarding the consistency of privacy protection and security measures across diverse data sources, such as data utilization across industries and platforms. Regrettably, Hainan Province has yet to introduce systematic regulations for data management and protection [79]. This implies that the legislation on data management and data protection in Hainan Province is lagging. In December 1997, Hainan Province promulgated and implemented the Measures for Implementing the Law of the People’s Republic of China on the Protection of Consumer Rights and Interests [80]. Regrettably, as of 2024, this legislation remains unamended. In contrast, Guangdong Province’s implementation measures—the Consumer Rights Protection Law of the People’s Republic of China—have evolved, undergoing the latest revision in January 2024 [81]. Some advanced cities in Guangdong Province have even enacted consumer protection legislation related to data management and e-commerce, such as the Shenzhen Special Economic Zone [82].
4.3. Risk of AI Discrimination
AI products and services are highly integrated cross-industry intelligent systems and architectures involving the application of multiple technologies and substantial data as a foundation. The systematic interaction between cross-industry AI products and AI services diminishes transparency and interpretability [83]. Consequently, AI product and service innovations may give rise to more severe and widespread discrimination issues. In the traditional service delivery process, the service industry provides value through service-centric knowledge, and service personnel are required to continuously engage in feedback and communication with consumers and exchange and learn with other service providers [84]. Practitioners must interact frequently with consumers through continuous and immediate high-quality services and comprehend clients’ needs and emotional fluctuations to a certain extent in algorithms. Regarding data, the innovation of AI products and services falls within the domain of temporal innovation. It necessitates comprehensive public policies to govern and steer AI technologies, ensuring that technological advancement is harmonious with societal values. In this regard, the legislative and policy framework of the HFTP is notably weak. As illustrated in Table 2, the HFTP has yet to introduce policies and legal regulations directly related to AI. Compared with advanced regions, Hainan must enhance policy advancement and legal safeguards regarding AI. A particularly salient example is the city of Shanghai in China. Shanghai has successively formulated policies and regulations such as the Implementation Measures for Accelerating the High-Quality Development of AI, the Action Plan for Building Shanghai as a Highland of AI and Constructing a First-Class Innovation Ecosystem (2019–2021), and the Fourteenth Five-Year Plan for the Development of the AI Industry in Shanghai [85].
4.4. The Complexity of Legal Contracts and Evaluation of Hypotheses
The complexity of legal agreements has impeded the innovation of AI products and services in the HFTP. It has also posed challenges to legal services, legal aid, legal training, and internal legal compliance within enterprises in the HFTP. Generally, AI product or service innovations primarily involve procuring, utilizing, and maintaining contracts for individual AI products or services. When AI products and services are integrated, the contracts may involve multiple suppliers and service providers with a high degree of technological integration. This complicates the issues of contract signing, fulfillment, and the attribution of responsibility [86]. During the contract-signing phase, enterprises may need to coordinate contractual obligations and responsibilities among hardware manufacturers, software developers, and service providers. In delineating contractual obligations and responsibilities, ambiguity can lead to frequent disputes during the contract-fulfillment phase. In the contract-fulfillment phase, algorithms’ complexity and opacity complicate the responsibility-allocation issue. Under such circumstances, the contract should specify data quality requirements and responsibility attribution to ensure that AI services’ effectiveness meets expectations [87].
In 2024, an evaluation of the development index of artificial intelligence in Chinese cities proved the effectiveness of artificial intelligence policies, which validated Hypothesis 1. Evaluation is based on five aspects: the density, growth rate, innovation index, capital index, and application depth of the artificial intelligence industry. The survey results show that Shenzhen ranks second in the index evaluation, scoring 90.05. Shanghai ranks third with a total score of 88.88. Chengdu ranks seventh with a total score of 76.9 [88].
The following study validates the policy support portion of Hypothesis 1. China is a significant example of how policy support can promote the innovation and transformation of artificial intelligence products and services in enterprises. Research from the China Academy of Information and Communications Technology (CAICT) of the Ministry of Industry and Information Technology of China shows that the development of artificial intelligence requires the continuous improvement of technical tools, the construction of intelligent computing technology systems, the exploration of industry technology platforms, and the construction of infrastructure, which require massive capital investment and policy support. The study points out that, since 2015, China has issued policies to promote and manage artificial intelligence at the central government level. This has achieved good results and provided a high-quality environment for enterprises to innovate and transform their artificial intelligence products and services. The effectiveness of these policies confirms Hypothesis 1 [89]. The feasibility of Hypothesis 1 can be better verified from two aspects: government funding policy support and business environment policy support. Providing financial support for innovation in artificial intelligence products and services is crucial.
Another key aspect is to provide policy support for the business environment. Hypothesis 1 has been verified again. Another study by the CAICT discusses the development of high-tech enterprises, such as those involving artificial intelligence, from the perspective of the business environment. The study points out that efficient, transparent, fair, and high-quality administrative procedures can create a high-quality business environment that reduces enterprises’ development and transformation costs and promotes innovation in artificial intelligence products and services. Evidence from China confirms this point [90]. Therefore, the HFTP should further strengthen the construction of the business environment, improve the level of administrative services, and promote the innovation and transformation of artificial intelligence products and services in enterprises.
The following study verifies part of Hypothesis 1 regarding corporate cooperation. A study in China shows that guiding academic research institutions in universities to collaborate with industry enterprises is beneficial for promoting enterprise transformation through joint laboratory construction, innovation centers, and other means. Enterprises can cultivate excellent artificial intelligence developers will full cooperation and establish an infrastructure system for the development of artificial intelligence [91]. Another study also discussed AI products and services. Enterprises should collaborate with renowned universities and other scientific research institutions to jointly develop AI technologies and share resources to enhance innovation efficiency [92]. These studies validate the second aspect of Hypothesis 1, which is that the Hainan Free Trade Port can promote the innovation and transformation of artificial intelligence products and services through enterprise cooperation.
A study of global AI regulations shows that legal regulation is central to AI development strategies in various countries. The survey shows that in the development strategy of artificial intelligence in the United States, legal regulation accounts for as much as 17.28%. In the EU strategy, legal regulation accounts for 20.00%. In the UK strategy, legal regulation accounts for 4.08%. Legal regulation is vital in these countries’ innovation and development of artificial intelligence products and services. The role of legal regulation is to provide fair, orderly, and favorable innovation and market environment-related policies [93]. This study confirms the Hypothesis 2. Research shows that artificial intelligence development and governance must be achieved through international cooperation models. International cooperation may not be limited to coordinating regulatory areas but can include practical cooperation in non-regulated regions [7]. This confirms the part about global collaboration in Hypothesis 2.
China’s HFTP should strengthen international cooperation, especially in terms of technical assistance, infrastructure construction, investment, trade, and other nonregulatory areas, to promote innovation in artificial intelligence products and services. In 2024, a survey conducted by the CAICT on artificial intelligence showed that the innovation and development of AI products and services involves interdisciplinary and technological aspects, making the compliance of enterprises crucial. Corporate compliance is conducive to fulfilling legal and social responsibilities in terms of protecting privacy, data security, safety, and ethics. At the same time, by fulfilling these responsibilities, the compliance management approaches of enterprises can promote safer and more effective data transmission and better maintain the relationship between technology and humanity [94]. This study confirmed the feasibility of Hypothesis 3 well.
4.5. Strategies for Promoting the Development of AI Products and Services in HFTP Through Legislation
Innovation in AI products and services plays a crucial role in the development of enterprises; however, the effectiveness of corporate transformation and growth remains a topic worthy of discussion. Firstly, the government of the HFTP ought to introduce policies to support enterprises engaged in the innovation of AI products and services. Several national governments have provided substantial support in this regard. For instance, Shanghai in China offers a subsidy of 1.5% interest for enterprises involved in the construction of AI infrastructure. The city of Chengdu in China provides a maximum subsidy of CNY 2 million to enterprises engaged in the research and development of artificial intelligence-related technologies. In 2023, Shenzhen in China allocated a fund portfolio of CNY 100 billion for AI enterprises [95]. The EU also supports AI product and service innovation by establishing research funds, promoting industrial alliances, and developing industry standards [96,97]. In response, the HFTP should introduce supportive policies and financial incentives specifically tailored for industries related to AI products and services rather than merely offering tax benefits. Secondly, enterprises in the HFTP should proactively undertake a transformation towards AI products and services. Enterprises should collaborate with renowned universities and other scientific research institutions to jointly develop AI technologies and share resources to enhance innovation efficiency [92]. In corporate management and operations, enterprises should strictly adhere to data-related compliance requirements and implement technologies such as data encryption and access control with labor protection laws, providing alternative positions and opportunities [98].
4.6. Strategies for Preventing the Legislation Risks of AI Products in China’s HFTP
On the one hand, the government encourages enterprises to utilize AI technology for digital transformation, while on the other hand, it also refines the legal regulation of AI. The reason is that while AI provides welfare, it also challenges data security, privacy, discrimination, and transparency [99]. In the initial stages of AI development, AI systems were quickly interpretable and controllable. However, with the increasing volume of data and the deepening of technological advancements, the interpretability and controllability of AI have diminished [100]. The HFTP ought to formulate comprehensive and competitive legislation. Notably, the legal regulation of such innovations must balance trust in innovation and overall societal development. The UN encourages the conclusion of treaties between nations and strives to foster regional and multilateral cooperation models. Furthermore, the UN has outlined five guiding principles for the governance of AI, including a people-centered approach, data governance, and the prioritization of public interest. These principles provide a solid foundation for international cooperation. Furthermore, China has signed a Regional Comprehensive Economic Partnership with Southeast Asian countries and has established digital trade regulations [101].
China should formulate a high-level, unified AI law to provide macro guidance for the innovation of AI products and services in the HFTP. In this regard, China can draw on the legislative model of the EU. The EU AI Act, passed in 2023, is divided into three risk management mechanisms, covering AI applications ranging from low to high risk. Certain key areas, including insurance and banking, must be regulated and undergo impact assessments. High-risk systems require strict compliance checks and inspections to ensure compliance with fundamental rights and safety standards. Furthermore, according to the AI Act, the EU will establish a European AI Office to coordinates compliance, implementation, and enforcement. The HFTP should formulate local regulations related to the innovation of AI products and services, which is also the focus of legislation [102,103].
4.7. Legal Compliance Strategies for Enterprises
Enterprises in the HFTP may encounter compliance challenges and uncertainties related to laws and regulations when developing, deploying, and utilizing AI technologies. These risks could lead to legal disputes, fines, and reputational damage [104]. The HFTP should enhance legal compliance among enterprises. Firstly, data management should be considered. Enterprises in the HFTP should fulfill the obligation to inform stakeholders when collecting and processing personal data. Enterprises should notify users of the purposes of data use and obtain explicit consent. Additionally, collecting and using data within the contract framework ensures that data processing is legal and compliant, which helps reduce legal risks. Regarding data security, denying unauthorized access to internal corporate resources is the most critical defensive measure to protect personal data from unauthorized access, leakage, or tampering. Technical and organizational security measures are equally important, necessitating the establishment of internal control mechanisms. Data leakage will result in the risks of infringement, disclosure of trade secrets, and administrative penalties due to the enterprise’s failure to fulfill its obligations to ensure data security [105]. Enterprises can also implement in-process and post-event review measures through periodic security audits [106]. The objective of security audit measures is to ensure the lawful and legitimate utilization of data, which should not exceed the scope authorized by the user. When data are no longer required, enterprises must securely destroy the data following regulations to prevent data leakage and misuse [107]. The protection of intellectual property is equally as important as the prevention of disputes. When AI product and service innovation involves signing contracts with development teams or outsourcing companies, it is imperative to clearly define the ownership and scope of use for protecting patents, trade secrets, copyrights, and other intellectual property rights [108].
5. Conclusions
This research defines broad and narrow concepts of AI product and service innovation through detailed analysis and distinguishes specific applications of AI technology in HFTP in products and services. This theoretical context provides a foundation for subsequent research and aids the academic community in profoundly understanding and discussing AI’s specific applications and innovation models in different fields. Secondly, this research elucidates the transformation pathways of enterprises in the HFTP in the application of AI technology, emphasizing the shift from product-centric to service-centric approaches. This transformation involves not only the application of technology, but also profound changes in enterprise management, operational modes, and culture. It provides theoretical guidance for enterprises leveraging AI technology to enhance their competitiveness by analyzing the risks associated with AI technology; this research highlights the importance of improving legal regulation of AI products and service innovation in the HFTP, touching particularly on challenges related to data privacy, security, and algorithmic bias. It provides a theoretical basis for legislative bodies and policymakers, promoting research on the legal regulation of AI technology. In the digital age, much attention is given to artificial intelligence innovation. However, artificial intelligence itself is also a double-edged sword. It brings both the gospel of innovation and social progress and a wide range of risks. It is crucial to establish an appropriate policy support system, legal supervision boundaries, and a development path for the development of artificial intelligence from moral and safety perspectives. The study also focuses on the indispensable link between enterprise transformation, legal regulation, and legal compliance in the context of AI product and service innovation in the HFTP. This research proposes a comprehensive innovation model for AI technology in cross-industry applications, emphasizing the integration of technology, data, and services.
5.1. Implications
This research uses the HFTP as a case to demonstrate the practical application of AI technology in transforming traditional enterprises. Specifically, these cases illustrate how enterprises in the HFTP leverage AI technology to achieve innovation and transformation and enhance customer experience and operational efficiency through intelligent means. These practical cases provide valuable references for other enterprises, enabling them to draw on successful experiences and implement transformation strategies effectively. In terms of enterprise management and operations, this research offers detailed guidance to help enterprises overcome management challenges when implementing AI technology. The study recommends that enterprises in the HFTP enhance their employees’ technical capabilities through internal training, thereby increasing their understanding and acceptance of AI technology [109]. HFTP enterprises should also establish robust internal control mechanisms to ensure data security and compliance. These management and operational strategies help enterprises implement technological transformation more efficiently and enhance competitiveness. Furthermore, this research proposes a comprehensive innovation model for the application of AI technology across industries, emphasizing the integration of technology, data, and services. This perspective promotes interdisciplinary, innovative research, helping enterprises achieve technological breakthroughs in different fields and enhance service quality and efficiency. Enterprises can utilize AI technology more comprehensively through comprehensive applications across industries to upgrade their business models extensively. This research proposes recommendations for enhancing regulatory frameworks through an analysis of the laws and regulations of governing bodies and countries such as the EU and the United States, as well as regions like Shanghai and Guangdong Province, on AI and data governance. These suggestions offer a reference for policymakers and regulatory authorities in the Hainan Free Trade Port, facilitating establishing a more scientific and practical regulatory system to ensure the healthy development of AI technologies. Moreover, enterprises must focus on technological innovation, ethics, and social responsibility, while advancing technological innovation and establishing a more sustainable business model [110].
5.2. Limitations and Future Research Directions
The research was primarily conducted through analysis and data collection, yet the sample selection may be limited. (1) The reason for this is that, despite a promising future, the HFTP lacks scaled enterprises innovating AI products and services. Concurrently, the free trade port also lacks a systematic policy and legal framework for innovation in AI products and services. Consequently, the restricted sample in the research has a particular impact on the universality of the conclusions. As the HFTP develops, future research should broaden the sample sources, focusing on enterprises with outstanding performance in AI product and service innovation while considering small- and medium-sized enterprises to ensure the conclusions’ broad applicability. (2) Due to AI technology’s rapid development, the research data may lag and fail to reflect the latest technological advancements and market changes. Future studies should establish a dynamic data tracking and analysis mechanism to acquire the latest technical application data and market feedback promptly. For instance, tracking the innovative practices of the latest AI applications, such as generative AI, in various enterprises ensures that the research remains cutting-edge and timely. (3) AI technology encompasses multiple disciplines and fields, rendering its applications and impacts highly complex and diverse. This research may not have comprehensively covered all pertinent areas. Future studies should enhance interdisciplinary collaboration, integrating knowledge and methodologies from diverse fields for a more comprehensive and in-depth analysis. For instance, by combining perspectives from computer science, economics, management, and law, one can delve into the integrated issues in the innovation of AI products and services. (4) The legal regulations and ethical issues surrounding AI are complex and dynamic, and this research may not have been able to comprehensively cover and deeply analyze all pertinent legal and moral concerns. Future studies should continue to focus on the ethical and legal issues of AI technology, explore the establishment of a more comprehensive and flexible legal, regulatory framework and, as a suggestion, research the latest developments in AI legal regulations in the EU and the United States, analyze their impact on corporate innovation, and propose practical legal recommendations.
Conceptualization, methodology, writing—original draft preparation, validation, formal analysis: Y.L. Writing—original draft, resources, data curation, investigation, formal analysis, supervision, conceptualization: S.W., Methodology, writing—review and editing, investigation, supervision, visualization: M.B.K., Project administration, funding acquisition: S.W. All authors have read and agreed to the published version of the manuscript.
Not applicable.
Not applicable.
The original contributions presented in the study are included in the article; further inquiries can be directed to the corresponding author.
The authors declare no conflicts of interest.
Footnotes
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Enlarge this image.Figure 1. The relationship among enterprise transformation, legal compliance, and legal supervision in the AI product service innovation process.
Enlarge this image.Figure 3. Financing in the field of AI in Shenzhen in recent years, The White Book on the Development of AI in 2024. https://www.doc88.com/p-67739503636875.html, accessed on 14 July 2024.
Enlarge this image.Figure 4. Executive Summary: expenditure on labor by scenario, 2020–2040 (GBP billion). AI activity in UK businesses. Source: https://www.gov.uk/government/publications/ai-activity-in-uk-businesses/ai-activity-in-uk-businesses-executive-summary, accessed on 22 July 2024.
Enlarge this image.Figure 6. Global AI and environmentally sustainable development venture capital. Source: OECD AI, live data: https://www.imf.org/external/datamapper/AI_PI@AIPI, accessed on 22 July 2024.
Enlarge this image.Figure 7. Worldwide VC investments in generative AI source: OECD AI live data: https://oecd.ai/en/data, accessed on 11 August 2024.
Enlarge this image.Figure 8. Total VC investments in AI by country and industry. Source: OECD AI, live data: https://oecd.ai/en/data, accessed on 11 August 2024.
The legal risk literature on AI product and service innovation.
| Author(s) | Type(s) of AI Product Service Innovation | Technology Type(s) | Legal Risks Type(s) | Key Points |
|---|---|---|---|---|
| Bangul Khan (2023) [ | Medical industry | Machine learning, deep learning, video capsule endoscopy, metaverse, robots | Privacy leakage, algorithm bias, lack of clinical risk assessment | Due to the importance of protecting privacy data in medical services and the need for ethical innovation in AI products and services, practical risk assessment and risk prevention must be carried out. |
| Lubna Luxmi Dhirani | Automobile industry | Cloud computing, autonomous driving technology, big data, self-healing networks, fuzzy logic model and ant colony optimizer | Data leakage, accountability, algorithmic discrimination, data security | The ethical standards and legal regulation of AI are still being improved. In order to prevent the risks of AI, it is necessary to improve it from both moral and legal aspects. |
| Müller, Benedikt (2023) [ | Cross-industry AI product service innovation | Intelligent robots, natural language processing, deep learning, transfer learning | Algorithm black box and algorithm discrimination | When using data from different disciplines and sources, there may be algorithmic opacity and discrimination issues. |
| F. Lagioia | Online platform retail and service industry | Online platforms, supervised learning, unsupervised learning, and reinforcement learning | Unfair clauses and dispute resolution in consumer contracts | AI systems that automatically analyze text documents can provide valuable insights into the practices of online suppliers |
| Etinosa Igbinenikaro | International trade industry | Robots, virtual assistants, big data | Jurisdictional conflicts and complexity of legal contracts | The complexity of legal compliance issues in different jurisdictions and regulatory bodies. |
| Rajesh Gupta | Retail and service industry | Deep learning, supply chain, smart contracts | Network attacks, privacy breaches | The vulnerabilities of smart contracts may be used for data theft and malicious user attacks. |
| Lilian Edwards | Manufacturing industry | Deep learning, machine learning, big data, cloud computing | Responsibility attribution and high-risk AI | AI product and service innovation involves procurement, outsourcing, and other data sources, making technology and data complex. |
Legislation policies on AI in the EU, China, and the United States.
| Law for AI | Other Relevant Laws and Policies | |
|---|---|---|
| EU | AI Act | General Data Protection Regulation |
| China | Algorithmic Recommendation | |
| United States | AI Training Act | Maintaining American Leadership in AI: The National AI Research and Development Strategic Plan |
AI preparedness index of some countries in the world.
| Area | Country | AI Preparedness Index | Area | Country | AI Preparedness Index |
|---|---|---|---|---|---|
| Asia | Bangladesh | 0.384 | America and Oceania | Argentina | 0.473 |
| Brunei Darussalam | 0.495 | Australia | 0.727 | ||
| Cambodia | 0.369 | Bahamas | 0.457 | ||
| China | 0.635 | Barbados | 0.504 | ||
| India | 0.492 | Brazil | 0.501 | ||
| Indonesia | 0.516 | Bolivia | 0.376 | ||
| Iraq | 0.269 | Chile | 0.585 | ||
| Israel | 0.725 | Canada | 0.713 | ||
| Iran | 0.378 | Colombia | 0.489 | ||
| Jordan | 0.482 | Costa Rica | 0.540 | ||
| Kazakhstan | 0.552 | Guatemala | 0.390 | ||
| Korea, Republic of | 0.726 | Honduras | 0.341 | ||
| Malaysia | 0.632 | Jamaica | 0.433 | ||
| Mongolia | 0.484 | Mexico | 0.532 | ||
| Pakistan | 0.368 | Nicaragua | 0.331 | ||
| Philippines | 0.498 | United States | 0.771 | ||
| Tajikistan | 0.366 | Panama | 0.501 | ||
| Thailand | 0.535 | Paraguay | 0.409 | ||
| Uzbekistan | 0.346 | Peru | 0.491 | ||
| Vietnam | 0.481 | Uruguay | 0.548 | ||
| Europe | Austria | 0.724 | Africa | Algeria | 0.370 |
| Belgium | 0.672 | Angola | 0.259 | ||
| Cyprus | 0.632 | Botswana | 0.412 | ||
| Czech Republic | 0.646 | Burundi | 0.294 | ||
| Denmark | 0.778 | Cabo Verde | 0.432 | ||
| Finland | 0.758 | Cameroon | 0.341 | ||
| France | 0.697 | Central African Republic | 0.184 | ||
| Germany | 0.753 | Comoros | 0.254 | ||
| Greece | 0.581 | Congo, Dem. Rep. of the | 0.247 | ||
| Iceland | 0.700 | Djibouti | 0.318 | ||
| Ireland | 0.693 | Egypt | 0.394 | ||
| Italy | 0.620 | Ethiopia | 0.253 | ||
| Moldova | 0.480 | Kenya | 0.445 | ||
| Netherlands | 0.766 | Libya | 0.244 | ||
| Norway | 0.705 | ||||
| Russian Federation | 0.559 | Morocco | 0.429 | ||
| Spain | 0.648 | Nigeria | 0.336 | ||
| Switzerland | 0.757 | South Africa | 0.496 | ||
| Ukraine | 0.512 | South Sudan, Republic of | 0.105 | ||
| United Kingdom | 0.730 | Tanzania | 0.352 |
Source: AI preparedness index by IMF:
Evaluation factors of the AI preparedness index for some countries in world.
| Area | Country | Digital Infrastructure | Innovation and Economic Integration | Human Capital and Labor Market Policies | Regulation and Ethics |
|---|---|---|---|---|---|
| Asia | Bangladesh | 0.09 | 0.11 | 0.09 | 0.10 |
| Cambodia | 0.08 | 0.11 | 0.09 | 0.08 | |
| China | 0.19 | 0.15 | 0.15 | 0.15 | |
| India | 0.11 | 0.11 | 0.12 | 0.15 | |
| Indonesia | 0.12 | 0.11 | 0.13 | 0.16 | |
| Iran | 0.12 | 0.09 | 0.11 | 0.06 | |
| Iraq | 0.07 | 0.04 | 0.11 | 0.06 | |
| Israel | 0.17 | 0.19 | 0.17 | 0.19 | |
| Japan | 0.18 | 0.18 | 0.17 | 0.20 | |
| Jordan | 0.09 | 0.13 | 0.13 | 0.13 | |
| Kazakhstan | 0.15 | 0.11 | 0.16 | 0.13 | |
| Malaysia | 0.15 | 0.14 | 0.17 | 0.17 | |
| Pakistan | 0.08 | 0.09 | 0.10 | 0.11 | |
| Philippines | 0.10 | 0.12 | 0.15 | 0.12 | |
| Singapore | 0.21 | 0.18 | 0.20 | 0.22 | |
| Thailand | 0.14 | 0.12 | 0.14 | 0.13 | |
| United Arab Emirates | 0.15 | 0.15 | 0.15 | 0.17 | |
| Europe | Austria | 0.19 | 0.17 | 0.16 | 0.20 |
| Denmark | 0.20 | 0.18 | 0.18 | 0.22 | |
| Finland | 0.19 | 0.17 | 0.17 | 0.23 | |
| France | 0.18 | 0.17 | 0.16 | 0.18 | |
| Germany | 0.19 | 0.18 | 0.18 | 0.20 | |
| Greece | 0.15 | 0.15 | 0.14 | 0.14 | |
| Italy | 0.17 | 0.16 | 0.13 | 0.15 | |
| Russia Federation | 0.16 | 0.12 | 0.16 | 0.12 | |
| Spain | 0.17 | 0.16 | 0.15 | 0.17 | |
| Switzerland | 0.19 | 0.17 | 0.19 | 0.21 | |
| United Kingdom | 0.18 | 0.16 | 0.17 | 0.21 | |
| America and Oceania | Argentina | 0.13 | 0.09 | 0.12 | 0.14 |
| Australia | 0.18 | 0.16 | 0.17 | 0.21 | |
| Brazil | 0.14 | 0.11 | 0.12 | 0.14 | |
| Canada | 0.17 | 0.16 | 0.17 | 0.21 | |
| United States | 0.19 | 0.18 | 0.18 | 0.22 | |
| Africa | Algeria | 0.08 | 0.07 | 0.14 | 0.07 |
| Angola | 0.06 | 0.09 | 0.07 | 0.05 | |
| Egypt | 0.09 | 0.10 | 0.12 | 0.08 | |
| Ethiopia | 0.05 | 0.07 | 0.06 | 0.07 | |
| Kenya | 0.10 | 0.11 | 0.11 | 0.13 | |
| Morocco | 0.10 | 0.11 | 0.12 | 0.10 | |
| Nigeria | 0.08 | 0.09 | 0.09 | 0.07 | |
| South Africa | 0.12 | 0.11 | 0.12 | 0.14 | |
| Sudan | 0.02 | 0.05 | 0.04 | 0.01 | |
| Tanzania | 0.06 | 0.10 | 0.09 | 0.09 | |
| Zambia | 0.07 | 0.10 | 0.11 | 0.09 |
Source: AI preparedness index by IMF:
Artificial intelligence products and services.
| Duration | Global AI Market Size | AI in Healthcare | AI in Autonomous Vehicles | AI in Cybersecurity | AI in Finance | AI Startups | AI Investment | AI and Employment | Consumer AI Products |
|---|---|---|---|---|---|---|---|---|---|
| 2014 | USD4.8 billion | USD600 million | USD400 million | USD1 billion | USD1.5 billion | 2000+ | USD3 billion | - | USD200 million |
| 2015 | USD7.4 billion | USD1 billion | USD800 million | USD1.5 billion | USD2.3 billion | 3500+ | USD5 billion | - | USD500 million |
| 2016 | USD10.1 billion | USD2.1 billion | USD1.2 billion | USD2.5 billion | USD3.7 billion | 4500+ | USD9 billion | - | USD1.1 billion |
| 2017 | USD16.1 billion | USD3.2 billion | USD2.1 billion | USD4.5 billion | USD5.6 billion | 5700+ | USD15 billion | - | USD2.5 billion |
| 2018 | USD21.5 billion | USD4.9 billion | USD3.5 billion | USD7 billion | USD8.2 billion | 7100+ | USD20 billion | - | USD5 billion |
| 2019 | USD28.4 billion | USD6.8 billion | USD5.5 billion | USD10 billion | USD11.7 billion | 8500+ | USD26 billion | 15 million new jobs | USD8 billion |
| 2020 | USD35.8 billion | USD9.1 billion | USD8.3 billion | USD15 billion | USD16 billion | 9500+ | USD40 billion | 23 million new jobs | USD12 billion |
| 2021 | USD50.1 billion | USD12.6 billion | USD12.4 billion | USD20 billion | USD21.4 billion | 10,000+ | USD60 billion | 40 million new jobs | USD18 billion |
| 2022 | USD68.1 billion | USD16.8 billion | USD17.9 billion | USD30 billion | USD28.6 billion | 10,500+ | USD80 billion | 65 million new jobs | USD24 billion |
| 2023 | USD86.7 billion | USD21.4 billion | USD24.5 billion | USD40 billion | USD35.5 billion | 11,000+ | USD92 billion | 97 million new jobs | USD34 billion |
Sources:
Policies and regulations related to AI product and service innovation in HFTP.
| Policies in HFTP | Law and Regulations in HFTP |
|---|---|
| Overall Plan for the Construction of HFTP | HFTP Law |
| Three-Year Action Plan for Cultivating a Data Factors Market in Hainan Province (2024–2026) | Regulations on the Promotion of the Digital Economy in HFTP (Draft) |
| Special Administrative Measures for Access to Foreign Investment in HFTP (Negative List) | Regulations on the Development of HFTP International Data Center (Draft) |
| Several Policies and Measures for Accelerating the Development of the Blockchain Industry in Hainan Province | Regulations on the Promotion of the Old City Science and Technology Park of HFTP (Draft) |
| Three-Year Action Plan for Accelerating the Innovative Development of Industrial Internet in Hainan Province (2021–2023) | Regulations of Haikou National High and New Technology Industrial Development Zone |
| Several Measures for Supporting the Development of Innovative Pharmaceuticals and Instruments in Hainan Province | Regulations of Hainan Province on the Development and Application of Big Data |
| Implementation Plan for Accelerating the Innovative Development of Medical Education in Hainan Province | Regulations on the Protection of Intellectual Property Rights in HFTP |
| Overall Plan for Smart Hainan (2020–2025) | Measures for the Administration of the Negative List of Cross-Border Trade in Services in HFTP |
| Several Measures for Accelerating the Development of Digital Therapy Industry in Hainan Province | Measures for the Administration of the Accreditation of Provincial Industrial Innovation Service Complexes in Hainan Province |
| Implementation Plan for the Construction of Innovative Provinces in Hainan Province | Detailed Rules for the Implementation of Registration of Data Products in Data Products Supermarkets of Hainan Province |
Evaluation of the development of AI industry in 31 provinces in China in 2023.
| Province (City, District) | Rank | Province (City, District) | Rank |
|---|---|---|---|
| Beijing | 1 | Henan | 17 |
| Guangdong | 2 | Liaoning | 18 |
| Shanghai | 3 | Hebei | 19 |
| Zhejiang | 4 | Jiangxi | 20 |
| Jiangsu | 5 | Guangxi | 21 |
| Anhui | 6 | Jilin | 22 |
| Shandong | 7 | Shanxi | 23 |
| Tianjin | 8 | Heilongjiang | 24 |
| Sichuan | 9 | Hainan | 25 |
| Hunan | 10 | Yunnan | 26 |
| Hubei | 11 | Xinjiang | 27 |
| Fujian | 12 | Nei Monggol | 28 |
| Shaanxi | 13 | Qinghai | 29 |
| Chongqing | 14 | Ningxia | 30 |
| Gansu | 15 | Xizang | 31 |
| Guizhou | 16 |
Source: China Electronics Information Industry Development Research Institute CCID Research Institute.
Evaluation of the attractiveness of the AI industry in 31 provinces in China.
| Province (City, District) | Business Environment | Policy | Carrier Situation | Rank | Province (City, District) | Business Environment | Policy | Carrier Situation | Rank |
|---|---|---|---|---|---|---|---|---|---|
| Beijing | Excellent | Excellent | Excellent | 1 | Guangxi | Poor | Poor | Poor | 17 |
| Shanghai | Good | Excellent | Excellent | 2 | Qinghai | Poor | Poor | Poor | 18 |
| Guangdong | Excellent | Good | Excellent | 3 | Henan | Average | Poor | Poor | 19 |
| Zhejiang | Good | Good | Excellent | 4 | Xinjiang | Poor | Poor | Poor | 20 |
| Jiangsu | Good | Good | Good | 5 | Hunan | Average | Average | Average | 21 |
| Shandong | Good | Average | Good | 6 | Ningxia | Poor | Poor | Poor | 22 |
| Anhui | Good | Good | Poor | 7 | Hebei | Average | Poor | Poor | 23 |
| Tianjin | Average | Good | Good | 8 | Heilongjiang | Average | Poor | Poor | 24 |
| Hainan | Average | Poor | Poor | 9 | Shanxi | Average | Poor | Poor | 25 |
| Gansu | Average | Poor | Poor | 10 | Jilin | Average | Poor | Poor | 26 |
| Guizhou | Average | Poor | Poor | 11 | Chongqing | Average | Average | Average | 27 |
| Hubei | Average | Average | Average | 12 | Yunnan | Average | Poor | Poor | 28 |
| Shaanxi | Average | Poor | Average | 13 | Liaoning | Average | Average | Poor | 29 |
| Jiangxi | Average | Poor | Average | 14 | Nei Monggol | Poor | Poor | Poor | 30 |
| Sichuan | Average | Good | Poor | 15 | Xizang | Poor | Poor | Poor | 31 |
| Fujian | Average | Average | Poor | 16 |
Source: China Electronics Information Industry Development Research Institute CCID Research Institute.
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