November 14, 2020

Exploring the Business Case for Responsible AI

According to a report produced by The Economist Intelligence Unit (The EIU), "Lofty estimates of the future value of artificial intelligence (AI) reflect the growing role it is playing throughout the economy, supporting greater output capacity and productivity improvements."

Sponsored by Google Cloud, "The report is a timely call to action on responsible AI development and explores the key considerations that technology companies must take into account when designing, developing and implementing artificial intelligence (AI) responsibly. The purpose of the report is to highlight the value of responsible AI practices in an increasingly AI-driven world. The findings are based on an extensive evidence review, an expert interview program and an executive survey program."

Entitled Staying ahead of the curve: The business case for responsible AI, the report offers a conceptual toolkit to help firms realize the full potential of AI, while balancing critical questions around ethics and responsibility. Moreover, "While many ethical AI guidelines have been published globally, many firms have yet to meaningfully implement these, and need to do so in order to realize the full benefits of AI. The core purpose of this study is to assess the full benefits of responsible AI, both short- and long-term, and to outline the necessary investments to support it, as firms design, develop and implement the technology."

Below are the report's key findings:
  • Responsible AI should be seen as a potential source of competitive advantage, not only as a reactive measure to assuage ethical concerns.
  • Firms that incorporate responsible AI practices throughout the product development lifecycle will build competitive advantage through enhanced product quality.
  • Responsible AI can significantly benefit talent acquisition, retention and engagement, especially given employees' growing scrutiny of their employer’s ethics, beliefs and practices.
  • Companies' growing reliance on user data is emphasizing the need for better data management, security and privacy, which will in turn fuel growth in the AI industry.
  • AI regulation is imminent and firms should invest in readiness.
  • Responsible AI can improve a firm's top- and bottom-line growth by increasing customer engagement, broadening revenue streams, offering procurement advantages in competitive bidding processes, and increasing pricing power in the marketplace.
  • Societal belief in the virtue of technology companies remains high, but heightened focus on the sector has increased the trust and branding risks associated with a lack of responsible AI.

With respect to the first finding that responsible AI should be seen as a potential source of competitive advantage, the report says "Firms that shift their AI development processes to align with more responsible practices are likely to see reduced medium- and long-term downside risks associated with challenges such as dealing with a data breach. However, this study shows that the benefits of responsible AI actually extend far beyond risk management. For instance, improved data security and privacy can boost the availability and use of reliable data, and clearer 'interpretability' can make it easier to understand AI use cases within a business. Among EIU executive survey respondents, 90% agree that the potential long-term benefits and cost savings associated with implementing responsible AI far outweigh the initial costs."

Regarding the finding the AI regulation is imminent and firms should invest in readiness, the report notes that "Despite concerns about overregulation, many stakeholders in the broader AI ecosystem believe that the current lack of regulatory clarity may be feeding uncertainty, undermining public acceptance of the technology and stalling investment. EIU survey data confirms this, with over 85% of business leaders from across sectors reporting that formal AI regulation is long overdue. Regulation is coming, and it is incumbent on market leaders to invest themselves in the process in order to promote a responsible and balanced approach, rooted in the realities of AI technology and its applications. Preparedness for regulation is essential. Companies that invest in responsible AI practices now will be able to engage with regulators and act as industry advisors in crucial conversations about future regulations, potentially preventing the development of sweeping or overly restrictive AI regulations."

As for the final finding, the report suggests that "In the technology industry, the connection between trust and branding (including publicity) has never been stronger. A number of recent scandals have increased external scrutiny of industry practices, and 64% of EIU survey respondents report that these scandals have made them more distrustful of the technology sector. These developments have occurred against the backdrop of the fourth industrial revolution, and amid growing skepticism in many quarters about the overall benefits of new technologies. As a result, firms must realize that decisions made today about AI ethics could have long-lasting implications for how their brands are perceived in the marketplace."

Do you agree with the report's findings? What are your recommendations on how a business can implement responsible AI practices?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

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