New AI Regulations Are Coming: Is Your Organization Ready?

New AI Regulations Are Coming: Is Your Organization Ready?

This article, published on April 30, 2021, by Andrew Burt, addresses the critical need for organizations to prepare for the evolving landscape of Artificial Intelligence (AI) regulations.

Emerging Trends in AI Regulation

The piece highlights three significant trends in AI regulation emerging in the U.S. and EU:

• Increased Focus on Specific AI Applications: Regulators are increasingly scrutinizing AI systems used in high-risk areas such as hiring, credit scoring, and law enforcement.
• Emphasis on Transparency and Explainability: There's a growing demand for AI systems to be transparent in their decision-making processes, making them explainable to users and regulators.
• Development of Risk-Based Frameworks: Many regulatory approaches are adopting a risk-based model, categorizing AI systems by their potential harm and applying stricter rules to higher-risk applications.

Why Organizations Must Prepare

Organizations that fail to prepare for these regulatory shifts risk several consequences:

• Legal and Financial Penalties: Non-compliance can lead to significant fines and legal repercussions.
• Reputational Damage: A failure to adhere to ethical AI practices and regulations can harm a company's brand image and customer trust.
• Operational Disruptions: New regulations may require significant changes to AI development, deployment, and data management processes, potentially causing operational disruptions if not managed proactively.
• Loss of Competitive Advantage: Companies that embrace responsible AI and comply with regulations may gain a competitive edge by building trust and demonstrating ethical leadership.

Key Steps for Organizational Readiness

To navigate the evolving regulatory environment, organizations should consider the following steps:

1. Establish AI Governance: Implement robust governance frameworks that define roles, responsibilities, and processes for AI development and deployment.
2. Conduct AI Risk Assessments: Proactively identify and assess the risks associated with AI systems, particularly those in high-risk applications.
3. Prioritize Transparency and Explainability: Develop methods to ensure AI systems are understandable and their decisions can be explained.
4. Invest in Compliance Expertise: Build internal capabilities or seek external expertise in AI law, ethics, and policy.
5. Stay Informed: Continuously monitor regulatory developments in key markets like the U.S. and EU.
6. Foster an Ethical AI Culture: Promote a culture of responsible AI development and use throughout the organization.

Product Information

The article is available as a product (Item #H06C8P) from Harvard Business Review Press, published on April 30, 2021. It is offered in various formats including PDF, Audio MP3, Audio M4A, Audio CDROM, Audio Cassette, Bundle, DVD, Event Live Conference, Event Virtual Conference, Word Document, Electronic Book, ePub, Financial, Ebook, Hardcover/Hardcopy, Paperback Book, Paperback/Softbound, Web Based HTML, Kit, License, Magazine, Mobi, Multimedia CDROM, Multimedia Windows Media, Powerpoint, Microsoft Excel Spreadsheet, XML, and Zip File. The price is $11.95 USD.

Related Products

The article is also related to other HBR products such as:

• "AI Regulation Is Coming" by François Candelon, Rodolphe Charme di Carlo, Midas De Bondt, Theodoros Evgeniou.
• "Coming of the New Organization" by Peter F. Drucker.
• "Is Your Data Infrastructure Ready for AI?" by Seth Earley, Josh Bernoff.

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