1. The early years system is stretched with little room to stop and experiment

The ECEC system faces significant financial constraints, high workloads for practitioners, and challenges in attracting and retaining qualified staff. These factors leave little room to stop and improve, with nurseries prioritising immediate needs over exploring innovative ways to improve outcomes (eg, new technologies).

The ECEC system in the UK faces significant challenges, including financial constraints, high workloads for practitioners, and difficulties in attracting and retaining qualified staff. These pressures result in nurseries prioritising meeting their core responsibilities over innovation or testing new products and services. Nurseries operate on tight margins, making it difficult to invest in new technologies.

Government funding often does not cover the full cost of nursery places, and funding models do not account for administrative time, so practitioners have very little time outside of their child-facing roles in which to explore or implement new approaches. High staff turnover, with rates as high as 40% in some settings, creates a constant need for training, further limiting the capacity for experimentation and innovation.

2. Tech readiness across ECEC is low

Many ECEC settings exhibit low levels of technological readiness, stemming from a combination of factors such as poor physical infrastructure and digital skills. New tools need to integrate as seamlessly as possible into current ways of working.

We heard that ECEC practitioners may be sceptical of new technologies for several reasons including fatigue from previous initiatives that failed to deliver a positive impact, and awareness that there are limited resources for successful tech integration.

Early years settings do not consistently have access to reliable hardware and connectivity. We heard that limited broadband access and outdated hardware such as laptops and tablets are common issues​.

3. ECEC is a tough market for innovators to operate, especially if the ambition is to reach disadvantaged families

The UK nursery market is highly fragmented, with the majority of nurseries being small- or medium-sized enterprises. This fragmentation makes it difficult for innovators to achieve scale with new technologies. Although large nursery chains exist these often cater for families with higher income.

Innovators face challenges in accessing ECEC settings for testing and gathering feedback on AI solutions, and investment in new technology-based solutions for early years education is limited. Understandably, given the standards they adhere to and limited time for experimentation, nurseries may demand robust evidence of benefits before considering new technologies, which limits opportunities for testing and improving new solutions.

Tech innovation targeting early years settings is considered less attractive for venture investment, primarily due to the fragmented market and low purchasing power of nurseries.

4. Deep tech innovation requires expensive and scarce expertise

There is a concern that innovators in the early years space could lack the expertise to effectively leverage AI, limiting the impact of AI-driven solutions. Whilst innovators don’t necessarily need deep AI expertise, they do require the ability to assess different models for their specific use cases.

This barrier may not necessarily be universal across the early years development space. Innovators have successfully deployed AI without needing advanced skills by relying on existing AI models and tools, often described as ‘wrappers’. However, such tools are relatively easily replicated and therefore less attractive for investment. For more complex AI applications, particularly those requiring custom models, the lack of AI expertise can be a significant barrier.

The early years workforce holds a deep understanding of the problems that need addressing, but there aren’t opportunities for practitioners who have the ideas and aptitude to create new solutions to get the support and funding they’d need to bring their ideas to reality.

5. There are limited well-established ways to determine whether new AI solutions are trustworthy and safe

The lack of clear regulation around AI tools in early years education can create levels of uncertainty for both practitioners and innovators. We heard that concerns around trustworthiness and regulation of child-facing products were much higher than for practitioner-facing products, which contributes to the rationale for our focus on practitioner-facing interventions.

The innovators we spoke to did not see regulation (or lack of regulation) as a barrier. We heard that ECEC settings tend to group AI with any other tech and subject it to the same standards, this means they look for trustworthiness, safeguarding and GDPR compliance, and were satisfied with this approach.

We observed that when the issue of AI in the early years is raised, practitioners' concerns associated with AI tech interacting directly with children are brought to the fore and influence the initial reaction until they are reassured about how risks are mitigated or that children are not the intended audience.