AI and the Role of Governance

Stablecoin and NFTs in 2022. Bitcoin in 2019 and 2014. Sub-prime mortgages, 2008. Dot-com in 2000.

Could AI end up on this notorious list?

We're at the crest of a massive wave of interest in AI technology. This will translate to a period of growth and investment, likely helping us shake off the current period of economic stagnation coming out of the pandemic. Start-ups and innovative, established players will lead the charge, leveraging the latest AI tools to increase productivity, improve cost structures, add new customer value, and open up new markets.

It's easy to get excited about the value AI can introduce to the economy:

• Product development: AI can analyze vast amounts of data, identify patterns, and generate insights, leading to novel product ideas and features.
• Automated content creation: AI can generate content, from articles to music compositions. Creatives can collaborate with AI to produce engaging content at scale.
• Personalization and customer experience: AI can tailor experiences by understanding individual preferences, allowing businesses to design personalized (one-to-one) campaigns at scale.
• Creative process augmentation: AI can provide tools that assist artists, writers, and designers to automate repetitive tasks, allowing creatives to focus on ideation.
• Predictive analytics: AI can predict market trends, demand, and consumer behaviour, allowing leaders to leverage these insights to develop innovative solutions.
• Healthcare innovations: AI can assist medical professionals in diagnosis and treatment, creating an opportunity for healthcare startups to develop cost-effective solutions.

The list expands with each passing day, and as FOMO sets in for business leaders and stakeholders, our adoption of AI is taking on the characteristics of a stampede.

As companies seek a First Mover position to capture these benefits, there is a race to introduce AI at scale and implement it before competitors can adapt and adopt.

During a gold rush, you can dig for gold, but you won't get very far without a shovel. In this "AI gold rush", the shovel-sellers that we need, and that will become incredibly important for the sustainability of this movement, are individuals or firms that understand and can provide governance frameworks for the responsible, ethical, and compliant use of emerging AI tools and technologies.

Here's why governance will be a critical competency for businesses:

• Responsible and ethical usage: AI governance promotes responsible and ethical AI practices within organizations. It ensures that AI systems are developed and deployed with consideration for societal impact, fairness, and transparency.
• Legal compliance: Companies must adhere to various laws and regulations when implementing AI. Governance frameworks help organizations stay compliant with data protection, confidentiality, and intellectual property rules.
• Risk management: Effective governance identifies and manages risks associated with AI adoption. It helps companies assess potential pitfalls, such as bias, security vulnerabilities, and unintended consequences like algorithmic discrimination.
• Consistency and standardization: Governance frameworks establish consistent practices across the organization. Standardized processes for AI development, deployment, and monitoring ensure reliability and reduce variability.
• Skill development: Governance encourages skill-building in AI-related areas. Training employees on ethical AI practices, security protocols, and compliance requirements enhances their capabilities and confidence in handling AI technologies.
• Trust and transparency: Transparent governance practices foster trust among stakeholders. When companies demonstrate responsible AI usage, customers, investors, and employees feel more confident in the organization's commitment to ethical behaviour.
• Alignment with strategic goals: Governance aligns AI adoption with long-term strategic objectives. By integrating AI into business strategies, companies can maximize its benefits while minimizing risks.

The companies that get this right will sustainably reap the benefits of incorporating AI tech into their business models and workflows.

As we tighten our laces for the race to the AI finish line, we should exercise caution. If we are not careful, if we fail to invest in proper AI governance and risk management, we may be setting ourselves up for something none of us can predict. A few disastrous security breaches, a few high-profile discrimination cases, a back-lash from law makers that dampens enthusiasm for AI adoption, and the wind could quickly drop out of AI's sails and damage investor confidence in AI.

Let's learn from the bubbles of the past 25 years, and balance enthusiasm and technological fervor with a healthy dose of prudence and stewardship. Grab a shovel, and dig in for a methodical, safe, and sustainable journey leveraging AI.