KNOWLEDGE HUB


Regulating the Revolution

30 June

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The fourth industrial revolution (4IR), a digital age characterised by automation, connectivity, artificial intelligence (AI) and robotics has brought about unprecedented change – from virtual currencies to the Internet of Things (IoT). Entire economies are evolving and the worlds is changing as a result.

The 4IR has the potential to address some of the world’s most critical challenges, enabling more accurate and less invasive medical treatments, re-modelling cities to be ‘smart’, driving inclusive trade and transforming manufacturing. However, as organisations embrace the 4IR, they are also opening themselves up to increasingly complex and fast changing security issues such as data loss, intellectual property theft, business interruptions, fraud, reputational damage, cyber extortion and physical asset damage, to name a few. 4IR technology has been designed to serve all of society, whether that be AI, robotics or machine learning. The trust we are placing in this technology creates a dire need for it to remain ethical and honourable. Yet, the pace of change is such that there are concerns that loopholes and gaps are being left vulnerable to exploitation, either by criminals, or by the technology itself. For instance, there are many examples of when technology has sped away from regulation. Take Napster’s unique sharing digital music sharing capability – which came under fire from the music industry when it was accused of violating copyright laws through the way its platform functioned. Although it was technology-enabled, the courts believed its sole purpose was facilitating copyright infringement and ruled that the 80 million users that had downloaded Napster were breaking the law. In addition, the Cambridge Analytica scandal saw tens of millions of Facebook users’ data being accessed without their permission, highlighting the need for review and scrutiny of respective governance. 

 

The breach showed that even democratic governments were not able to safeguard electoral processes against cybercrime. In addition, one of the key 4IR breakthrough technologies – that of Blockchain, remains unregulated with no international standards governing its use, this is despite the fact that blockchains are not immune to attack. Today, digital technologies are enabling new platforms and business models that may be beyond what regulators have yet encountered. Consequently, despite almost universal agreement of the need for governance that encourages solid security practices, there is a dearth of clear and concise standards or frameworks capable of installing the necessary measures that address the security dimensions of the 4IR. For instance, the grey area of determining who is liable for harm caused by the digital platforms that enable the use of 4IR technologies, such as artificial intelligence and 3D printing remains open to discussion. Here, the advent of ‘machine learning’ (the ability for computers to learn and adapt according to past interactions), causes significant issues of liability. As Gary Coleman, Global Industry and Senior Client Advisor for Deloitte explains; “If a computer is learning from its interactions, how can the manufacturer know what the computer will do? Is the company liable if a computer it manufactured ‘learns’ an action that causes harm? 

 

Or, in the case of 3D printing, how are product liability laws applied?” As a suggested approach to bridging the governance gaps, public policy labs or innovation hubs have sprung up all over the world. These organisations have attempted to find ways to implement experimental, creative and citizen-centred approaches to the way policies are made, enabling new governance solutions. For example, OPM Innovation Lab in Washington, DC, the Laboratorio Para La Ciudad in Mexico City and the Human Experience Lab in Singapore or the EU Policy Lab which develops innovative policies for the 28 countries of the European Union. However, even as specialists, these organisations are struggling to navigate and enact structural changes to existing, cumbersome governance models. In order to realise the full benefits of the 4IR, organisations from all sectors must seek to drive collaboration in the effort to design policy that guides and encourages innovation. International private and public sectors should be encouraged to work together to collaborate and share knowledge with a view to establishing a framework that does not hinder innovation but provides guidelines that allows growth during this change. 

 

This means encouraging businesses around the world to; proactively understand and address security implications arising from the adoption of the 4IR in their sector; design, deploy and scale emerging technologies that minimise environmental and social impacts by considering ethical frameworks whilst promoting resilience and sustainability; and working together to form a new, dynamic approach to governance that informs an international framework of standards that ensure that 4IR technology is implemented in the most sustainable and inclusive way possible. Indeed, with so many regulatory questions surfacing as new business models are launched using 4IR technology, some business owners are taking a proactive role. For instance, technology companies are working with the EU to reshape privacy rules that impact their data mining business models and the drone industry has been successful in moving EU rules to a risk-based system, allowing for waivers on a case-by-case basis versus waiting for a new set of regulations to be written for each scenario. Organisations across all sectors should consider following this lead, working with governments and stakeholders to develop regulations that are flexible, transparent, and participatory. In particular, more should be done to design new models of collaboration between the public and private sectors. 

 

The impact of 4IR stands to be era defining but without a coordinated international approach, we risk missing opportunities without fully understanding the consequences of what we are creating. There is a sense of urgency that didn’t exist with previous revolutions – to think big, act quickly and lay the foundations for a new, fair, trustworthy, technology-based and global society. Success in this endeavour depends on collaboration and a drive to protect the progress the 4IR has made so far.

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