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Deregulation and User Protection Needed to Create Competitive Arab Tech Scene

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The Arab world needs to fast-track balanced regulation that supports the opportunities created by the Fourth Industrial Revolution while protecting data privacy, if it is to capitalize on the region’s emerging technology scene.

The Middle East and North Africa boasts a growing number of start-ups, with a 31% increase in investments to $900 million in 2018 compared to 2017 across sectors including transport, healthcare and fintech. Such businesses offer the potential for a new wave of economic growth in a part of the world traditionally handicapped by weak infrastructure and a limited industrial base.

“I view the Fourth Industrial Revolution as our opportunity to catch up, as our opportunity to leapfrog and actually get to parity with the rest of the world,” said Mudassir Sheikha, Co-Founder and Chief Executive Officer of ride-hailing firm Careem.

Careem has emerged as a poster-child for the Arab digital economy after it was acquired last month by Uber for $3.1 billion – a milestone for Arab tech deal-making. It comes on the heels of the $580 million purchase of Dubai-based e-commerce company Souq by Amazon in 2017.

After steam, mass production and information technology, the Fourth Industrial Revolution is bringing accelerating cycles of innovation, driven by artificial intelligence, robotics and biotechnology. It offers the promise of new high-tech jobs in a region struggling with high levels of youth unemployment – provided countries can deliver the right educational foundations.

But the rapid pace of change also raises concerns at a time when digital giants such as Facebook are confronted by a growing “techlash” over data privacy. Regional sensitivities over cultural norms add an extra level of complexity.

“It’s a very nuanced situation,” said Wafa Ben-Hassine, Counsel, Middle East and North Africa (MENA) Policy at Access Now, who argues that governments in the region must adopt a user-centred framework to ensure privacy and freedom from surveillance and censorship.

Some countries are already moving to embrace the new technological future, with Bahrain – recently selected as the site of new Amazon data centres – having passed a law allowing data stored there by foreign companies to be governed by laws of their home country.

“We think that is going to be a ground-breaking law,” said Khalid Al Rumaihi, Chief Executive, Bahrain Economic Development Board. “We, of course, have to manage risk but we have to not ignore opportunity.”

The United Arab Emirates, meanwhile, has appointed Omar bin Sultan Al Olama as the world’s first Minister of State for Artificial Intelligence, underscoring the Gulf state’s determination to carve out a niche in the new digital world.

“Not one country is going to lead in the Fourth Industrial Revolution,” Al Olama said. “There are going to be hubs of excellence across the world and each hub is going to champion one or two domains – and we want to champion the domain of government, first and foremost.”

For governments and companies alike, the new digital economy will bring pluses and minuses, especially when it comes to employment prospects – a dilemma showcased vividly by Careem, which has created 1 million jobs since it started operating seven years ago, but could also destroy employment with the arrival of autonomous cars.

In practice, Sheikha said, the impact of self-driving cars will be felt more gradually in the Middle East thanks to cheaper labour costs, with driver costs accounting for an average 25% of trip expenses in the region against 80% in the United States.

In region known for its big governments, it is important that regulations do not create stumbling-blocks to optimizing the benefits of technology, according to Murat Sönmez, Managing Director and Head of the Centre for the Fourth Industrial Revolution Global Network, World Economic Forum. “We need to make sure we don’t get in the way of the potential.”

And Klaus Schwab, Founder and Executive Chairman, World Economic Forum, warned that the Middle East simply cannot afford to be left behind. “Those countries that absorb the potential of the Fourth Industrial Revolution first will be the most competitive countries,” he said. “We have to make sure that countries and regions are not lagging behind.”

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Medicine from the Sky: Telangana Hits Milestone for Drone Delivery of Medical Supplies

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The Government of Telangana has been exploring the use of drones to increase access to healthcare for communities across the state. Drones can dramatically cut transport times and increase supply chain efficiencies. Countries around the world have experimented with drones for last-mile delivery for the past five years, but the first big leap forward took place in Rwanda, where experiments, or pilot projects, matured into national-scale implementations. Through drones, Rwanda cut the delivery time of medical goods from four hours to fifteen minutes, in some cases, and saved thousands of lives in the process.

Now, Telangana is one step closer to actioning its own large-scale programme to deliver blood and transport of medical samples via drone. The Government has adopted a new framework to implement drones for last mile delivery. This will integrate them into the state’s healthcare supply chain. Co-designed with the World Economic Forum and Healthnet Global Limited, an Apollo Hospitals Group company, the framework will become the foundation for the pilot project to test drone delivery and eventually for an RFP.

“Drones are helping people in remote rural areas become connected to important services,” said Timothy Reuter, Head of Aerospace and Drones, World Economic Forum. “Adopting this framework brings Telangana one step closer to rolling out a system that could save lives. It outlines what challenges drones can solve, how to oversee operations and how to implement them. We are looking forward to the next steps of this project.”

“Apollo Hospitals Group company HealthNet Global Limited truly believes that use of Drones for transport of Organs and other Medical aid will contribute to saving many lives. We are happy working with the World Economic Forum and Government of Telangana, as a clinical partner in this drones project, which I am sure is the next step in our journey of remote healthcare delivery,” says Dr. Sangita Reddy, JMD Apollo Hospitals Group.

“Telangana has been a pioneer in using technology for improving the lives of the citizens. Using drones to deliver blood and other medical goods to people in remote and inaccessible areas is an exemplary project that demonstrates use of technology for the social good,” said K.T. Rama Rao, Minister for Information Technology and Electronics and Communication, Industries and Municipal Administration and Urban Development. This project that could save lives would serve as a reference model for other States in India.

The framework outlines the key factors in evaluating drone operations and the technical requirements for each use case. It will ensure government services are used as efficiently as possible and will serve as the starting point for discussions with civil aviation authorities.

This framework is part of the Drones and Tomorrow’s Airspace Portfolio, run out of the World Economic Forum Centre for the Fourth Industrial Revolution India. The Network brings together government, business, start-ups, international organizations and NGOs to co-design innovative policy solutions to accelerate the benefits of emerging technologies such as drones, artificial intelligence, internet of things, and blockchain while mitigating the risks. Pilot projects have already positively impacted the ecosystem of autonomous flight around the world. A first of its kind Performances Based Regulation (PBR) was published in Rwanda, testing the theory that by promoting a risk focused methodology to evaluating operations, instead of traditional prescriptive government mandates, new and socially important use cases can be enabled. Learn more in our Advanced Drone Operations Toolkit: Accelerating the Drone Revolution.

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With 50,000 Start-ups Registered, India Aims For As Many More By 2024

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“There are 50,000 registered start-ups in India, and there will be 50,000 more by 2024 at this pace,” said Guruprasad Mohapatra, Secretary at the Department for Promotion of Industry and Internal Trade of India. There has been tremendous attitudinal change among government departments, he said, speaking for himself as well as colleagues in different parts of government. He added that this change has been accelerated since 2015-16 when a new policy came into effect. Regulators and officials now see potential in start-ups, and are invested in boosting their size and number.

Indian start-ups have come into their own in the last four to five years, agreed Shailendra Singh, Managing Director, Sequoia Capital India, Singapore. The optimism, the ability to dream, the amount and quality of capital available, the sheer size and scale of start-ups, as well as their ambition and ability to execute globally, are remarkable. “It is exciting to back these companies that have both disrupted existing companies and become full-stack online and offline businesses themselves,” he said, “Technology is intrinsic to these companies, not only impacting them at a superficial level.”

Asian start-ups are significantly different from their counterparts in Silicon Valley, Singh said, where markets are deep and very large, and companies have the incentive to do one thing and do it very well. Companies also need not go outside. In Asia, on the other hand, there are “lots of white spaces” and individual markets are very small, so that companies can and must quickly mutate to related businesses. For instance, Indonesian start-up Gojek started as a bike rental service, and then branched out into logistics, payments, delivery, etc.

Sharing the experience of the fast-growing hospitality start-up, OYO, Aditya Ghosh, the company’s Chief Executive Officer said that OYO realized early on that the best way to create higher margins was to own the entire value chain end-to-end – operations, properties, customer experience and so on. It also grew a diversified portfolio with multiple brands offering hotel rooms, holiday homes, cloud kitchens and co-working spaces, resulting in an “omnichannel presence”.

What business needs from the government is investment in infrastructure and ecosystem, much of which relies on removing ground-level constraints, and providing light-touch but adequate regulation that ensures Indian companies enjoy credibility as they scale-up globally. It is essential for businesses to have regular and deep engagement with policy-makers so they can take steps to pre-empt a full-blown a crisis. They must also nurture and train talent to create innovative mindsets for the next wave of start-ups.

India must also overcome some systemic challenges, such as low participation of women in the workforce, said Ankiti Bose, Co-Founder and Chief Executive Officer, Zilingo, Singapore, a four-year-old start-up that has brought technology and seamless connectivity to supply chains in the global clothing industry. With adequate data and regulatory support, Zilingo could “bring in capital at an unprecedented scale” to the fragmented, typically small apparel manufacturers and sellers in India, she said.

Mohapatra emphasized that the government is committed to improving women’s participation – by providing preferential access to capital to women-led start-ups, for instance – but the issue is of wider inclusion. “There are large tracts of India untouched by start-up presence,” he said, adding that the government is committed to spreading its start-up mission to the country’s more disadvantaged areas.

The government is committed to providing technology start-ups with room to experiment and develop without setting tight regulatory boundaries, as it did with the IT sector and the aviation sector earlier, he added.

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UK Government First to Pilot AI Procurement Guidelines Co-Designed with WEF

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The World Economic Forum, the international organization for public-private cooperation, released the world’s first government procurement guidelines for artificial intelligence (AI). The United Kingdom will be the first to pilot or test these guidelines, potentially accelerating the use of artificial intelligence in the public sector.

Governments want to acquire AI solutions to streamline processes and provide insights into key sectors such as transportation, healthcare and public services. However, officials often lack experience in acquiring such solutions and many public institutions are cautious about harnessing this rapidly developing technology at a time when we are only beginning to understand the risks as well as the opportunities.

Growing public concerns around bias, privacy, accountability and transparency of the technology has added an extra layer of complexity to a potential roll out on a national level. The AI Procurement Guidelines for Governments have been designed help officials keep up with this rapidly developing technology and mitigate the risks.

The guidelines were co-designed by the World Economic Forum’s Artificial Intelligence and Machine Learning team and fellows embedded from UK Government’s Office of AI, Deloitte, Salesforce and Splunk. Members of government, academia, civil society and the private sector were consulted throughout a ten-month development process, which incorporated workshops and interviews with government procurement officials and private sector procurement professionals.

The report provides the requirements a government official should address before acquiring and deploying AI solutions and services. It also provides the questions that companies should answer about their AI development and how the data is used and processed. The guidelines also include explanatory text elaborating on how to implement, key questions to ask and case studies.

“AI solutions hold the potential to vastly improve government operations and administer public benefits to citizens in new ways, ranging from traffic management to healthcare delivery to processing tax forms,” said Eddan Katz, AI Project Lead, World Economic Forum. “These guidelines empower governments and international bodies to set the right policies, protocols, and assessment criteria that will facilitate effective, responsible and ethical public use of AI. Once standards are set and widely adopted, we could see new policies emerge to help navigate an uncertain ecosystem.”

“How government buys services for taxpayers has an impact far wider than the public sector – by taking a dynamic approach we can boost innovation, create competitive markets and support public trust in artificial intelligence,” said Minister for Digital Matt Warman. “These new guidelines place the UK at the forefront of procuring AI and will help the public sector better serve the public, make it easier for firms bidding for new contracts and set a world standard in how governments work with artificial intelligence.”

“New uses of AI that are of interest to government will continue to emerge and will bring with them both benefits and risks,” Katz said. “It is important that governments prepare for this future now by investing in building responsible practices for how they procure AI.”

By leveraging the role of governments as market actors, the AI guidelines for procurement could have a significant impact on the shaping of norms throughout the industry of AI solutions providers. The standardization of ethics and risk management expectations will likely extend across other sectors in the market.

The World Economic Forum’s Unlocking Public Sector AI project is bringing together a multistakeholder community to empower government officials to more confidently make responsible purchasing decisions. Over the next six months, governments around the world will test and pilot these guidelines. Further iterations will be published based on feedback learned on the ground.

Additional quotes:

“Splunk has supported the development of these guidelines and worked closely with the WEF and UK Government,” said Lenny Stein, Senior Vice President, Global Affairs, Splunk. “We will help pilot them in the UK and, believe the guidance will enable Governments across the world, transform citizen services and deliver ethically sound and beneficial AI based solutions.”

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