Governing technology in an era of rapid transformation

At the G20 in Osaka this June, the Japanese presidency will look to assert again the importance of multilateral policy coordination and international collaboration at a time when protectionism and bilateral trade deals are en vogue. With issues such as global economic imbalances and uncertainties, security tensions, and global environmental threats headlining, the need to govern the rising power and impact of technology on society and the economy must also be right up there.

Technology is driving massive and rapid shifts across the globe -- from artificial intelligence (AI) profiling and customising our online world, to connected devices multiplying in our lives, autonomous vehicles, drone delivery and, soon, drone mobility, farm robotics and artificial meats, crypto currencies, and even immersive reality guided surgeries. The so-called Fourth Industrial Revolution has just begun and is creating profound changes to our sectors, markets and society.

Each day, more questions arise. Media headlines focus heavily on issues like privacy and security, the growing market power of the tech giants and anti-trust concerns, and the national “AI arms race”, with the US and China as key players. But the story - for media, governments, business and citizens alike - is so much broader. There is no doubt that these emerging technologies will have sweeping impacts on society and the economy over the next generation. Taking AI alone, our estimates at PwC are that AI could increase global GDP by US$15.7 trillion by 2030.

It is not surprising therefore that governments and regulators around the world now have a laser focus on technology. In many cases governments are grappling with the same issues as business executives: what impact will the digital revolution have on the workforce and how can we prepare, upskill and re-skill? How can we encourage, not stifle, innovation while minimising risks and harms? How can we ensure that technologies are implemented in a safe, ethical and trustworthy way? How can we manage potential social influences including on privacy, democracy, crime, and human rights? And how can we unleash the power of new technologies to address our most pressing global challenges, like climate change and inequality?

One thing is certain: governments and businesses need to work together to make sure that technology is actively managed to align with societal needs. This is on the agenda at the #GlobalSolutions Summit in Berlin this week, which brings together policy makers, government representatives, business leaders and members of civil society around the world to discuss how economic progress can once again deliver societal progress.

Disparate approaches, shared problems

As new technologies infuse across our systems, sectors and everyday lives, a rethinking of existing policies, rules and regulations becomes a necessity. In the main, tech firms have enjoyed a period of little government oversight, but a groundswell of emerging regulation is on its way. From threats of more aggressive anti-trust action which could go far beyond big tech, to the inevitable (and continued) emergence of privacy regulation and content regulation, and technology-specific codes of conduct.

With little regulatory precedent to follow, but mounting pressure to act and catch up, we are seeing an increased emergence and divergence of policy and regulatory approaches across jurisdictions.

In recent years, for example, several countries and regions have released national/regional AI strategies to promote AI development and to address these important questions. The result is vastly different approaches across jurisdictions. Policies include pledging investment into direct R&D, focusing on public-private partnerships, labour market reforms, training and attracting talent, opening government data, data protection laws such as the European Union’s General Data Protection Regulation (GDPR), AI and blockchain legal frameworks, codes of conduct such as that forthcoming in the EU for AI, policies for promoting tech inclusion such as India’s #AI4All program, and even creating a Ministry for AI in the example of the United Arab Emirates.

The status quo thus far has been that policy has been developed in a competitive and uncoordinated manner, often in reaction to recognising potential harm. Reforms are emerging on a jurisdiction by jurisdiction basis, meaning differences and at worst conflicting requirements. Technology meanwhile is intrinsically borderless and goes global fast.

It would be naive to think that countries won’t pursue individual strategies, but shifting to a more collaborative, cooperative and coordinated approach will be critical to harness the potential of technology for society, and minimise harm.

A way forward - collaborate and coordinate

Given we still are in the early days of the technology revolution, we stand at a critical juncture to make decisions and put in place a governance architecture with profound and lasting impacts on society. Collaboration and coordination internationally will be critical, and is needed urgently.

Building a more global solution to governance, or at least a globally coordinated set of priorities and best practices, will be crucial. Here are some priority recommendations for G20 policymakers:

1. Develop and agree global standards and codes of conduct, including, for example, responsible technology policy to manage the controversial aspects of emerging technologies, such as algorithmic bias, transparency and accountability in AI, or the environmental performance of blockchain platforms or autonomous vehicles.
2. Support partnerships, including between nations and the public and private sector, to seize the economic, social, and environmental benefits of emerging technologies, including incentivisung cross-industry and multi-disciplinary collaboration.
3. Establish international policy-industry expert groups and task forces, to advise policy makers on good practice (eg. the EU’s new AI4EU AI on demand platform, and High-Level Expert Group on Artificial Intelligence).
4. Invest in Tech for societal impact, including academic, basic R&D investment and innovation finance mechanisms (e.g. accelerators, incubators, blended finance) to help unlock and scale emerging tech solutions that address pressing societal challenges (e.g. health, climate change, inclusion).
5. Tackle skills and labour challenges, with inclusion front of mind. Think ahead, together (internationally and public-private), about the markets, value chains and the workforce of the future. This includes labour market reforms, policies to upskill and re-skill, education for the era of human+machines, support for entrepreneurs, and social safety nets in a period of structural transition.
6. Deal with data governance, openness and privacy. There is a looming fight over defining the boundaries of privacy and acceptable business uses of our personal information data that needs international collaboration, with location data being at the heart of discussions in 2019. From data oversight and monitoring requirements to maintain visibility into data collection mechanisms, intent of data collection, data provenance, and usage guidelines. New laws will need to thread the needle between protecting personal information and enabling useful innovation including supporting open data environments.
7. Address infrastructure, data and technology access, to maximise opportunity and inclusion. This includes building appropriate cloud-providing infrastructure, data and connectivity infrastructure, facilitating fit-for-purpose data access and annotation, along with responsible data management and open platforms for access to technology tools.

The positive scenario for our future won’t emerge unguided; there will be trade-offs and challenges as well as opportunities as sectors and countries undergo rapid transition. To realise the huge potential of technology for society, governments will need to collaborate and take an agile approach to targeted regulation and supportive policy development. This will cut across technology, education, sectoral, environmental and broader structural policy-making to manage the transition at hand e.g. reinforcing social safety nets and fiscal reforms.

While each country must consider its specific needs, regional and global collaboration and coordination is vital. As with all global challenges, a global framework and commitment to collaborate will create more innovation and allow us to channel technology to help solve society’s most complex and pressing global issues.

For more insights, visit pwc.com/commonpurpose.

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