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Artificial intelligence: EU must ensure a fair and safe use for consumers

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Parliament’s Internal Market and Consumer Protection Committee approved on Thursday a resolution addressing several challenges arising from the rapid development of artificial intelligence (AI) and automated decision-making (ADM) technologies.

When consumers interact with an ADM system, they should be “properly informed about how it functions, about how to reach a human with decision-making powers, and about how the system’s decisions can be checked and corrected”, says the committee.

Those systems should only use high-quality and unbiased data sets and “explainable and unbiased algorithms” in order to boost consumer trust and acceptance, states the resolution. Review structures should be set up to remedy possible mistakes in automated decisions. It should also be possible for consumers to seek human review of, and redress for, automated decisions that are final and permanent.

“Humans must always be ultimately responsible for, and able to overrule, decisions” that are taken via ADM processes, especially in relation to the medical, legal and accounting professions and the banking sector, MEPs underline.

Adjust safety and liability rules to the new technologies

AI-enabled products may evolve and act in ways not envisaged when they were first placed on the market. MEPs urge the Commission to table proposals adapting the EU’s safety rules for products (e.g. directives on machinery and toy safety) to ensure that consumers are protected from harm, manufacturers are clear on their obligations and users are informed about how to use those products.

The Product Liability Directive, adopted over 30 years ago, would also need to be updated to adapt concepts such as ‘product’ ‘damage’ and ‘defect’ as well as rules governing the burden of proof, says the committee.

MEPs call for a risk-assessment scheme for AI and ADM and for a common EU approach to help secure the benefits of those processes and mitigate the risks across the EU.

Check differentiated pricing and discrimination

Under EU law, traders must inform consumers when the price of goods or services has been personalised on the basis of ADM, MEPs recall, asking the Commission to closely monitor the implementation of those rules. It must also check how the EU regulation banning unjustified geo-blocking is applied to ensure that ADM is not being used to discriminate against consumers based on their nationality, place of residence or temporary location.

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Petra De Sutter (Greens/EFA, BE), Chair of the Internal Market and Consumer Protection Committee, said: “Technology in the field of artificial intelligence and automated decision-making is advancing at a remarkable pace. The committee has today welcomed the potential of these advances, while at the same time highlighting three important issues that need to be addressed. We have to make sure that consumer protection and trust is ensured, that the EU’s rules on safety and liability for products and services are fit for purpose in the digital age and that the data sets used in automated decision-making systems are of high-quality and are unbiased”.

Next steps

The resolution, approved in committee by 39 votes in favour, none against and four abstentions, will be voted on by the full House in a forthcoming plenary session. It will further feed into Parliament’s work on this topic.

After the vote in plenary, the resolution will be transmitted to the EU Council (member states) and the Commission, so that they take into account MEPs’ views on AI and ADM. The Commission announced that it is due to present its plans for a European approach to AI on 19 February 2020.

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Growing Intra-Africa Trade through Digital Transformation of Customs and Borders

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The digital transformation of customs and borders in Africa could improve efficiencies in processes, such as administration at customs and borders, and yield trade gains on the continent of $20 billion a year. A new report by the World Economic Forum, Growing Intra-Africa Trade through Digital Transformation of customs and borders, launched today at the Annual Meeting 2022 in Davos, provides a pragmatic perspective on the non-tariff barriers in border and customs services that can be exponentially improved through digital transformation to increase intra-Africa trade.

The report, written in collaboration with Deloitte, is launched at the convening of the Forum Friends of the Africa Continental Free Trade Area (AfCFTA), a multistakeholder group that supports implementation of the goals set out by AfCFTA through public-private collaborations. The group comprises Paul Kagame, President of Rwanda,; Wamkele Mene, Secretary-General, of the African Continental Free Trade Area Secretariat; Patrice Motsepe, Founder and Executive Chairman, African Rainbow Minerals; and Jim Ovia, Chairman, Zenith Bank among others.

The AfCFTA implementation, which started in January 2021, has the potential to increase intra-African trade from its current 18% of total trade to 50% by 2030. It also has the potential to lift 30 million people out of extreme poverty. However, achieving its full potential depends on putting in place significant policy reforms and trade facilitation measures.

Kavitha Prag, Africa Lead, Enterprise Technology and Performance at Deloitte Africa, said: “The African Free Trade Area agreement can be a great catalyst for Africa’s growth and development, but its full realization hinges on the introduction of efficiencies, including the improvement of customs processes. Digital transformation of border posts and customs is thus a crucial and necessary step in the implementation of the protocol, especially for many of Africa’s landlocked countries.”

Various countries and the regional economic communities are making efforts to build better trade networks enabled by world-class logistics networks that can withstand recent supply chain shocks such as the COVID-19 pandemic and geopolitical tensions.

The report highlights insights from the Logistic Performance Index as well as key insights from case studies demonstrating the quantifiable value of digital reforms in countries such as Ghana, Kenya and Uganda. The paper is a call to action for more integrated digital reforms that can drive higher impact through public-private partnerships that sets the course for Africa’s post-pandemic recovery and growth.

“Even after tariffs are lowered, and simplified procedures put in place, the full benefits of the AfCFTA will not be realized unless non-tariff barriers to trade are also addressed,” said Chido Munyati, Head of Africa at the World Economic Forum. “Policy-makers can make a difference by implementing digital solutions.”

The report calls on the following policy support to enable digital transformation:

– Legislative support and acceptance that embraces new practices such as e-signatures or the use of drones to monitor cargo

– Buy-in from the various agencies that enable these operations to embrace digital reforms and embed them in their processes

– Take action based on demand-driven interventions that lead to higher adoption of rates by all organizations and position intra-Africa trade as more cost- and time-competitive

– Develop skills of services agents that can maximize the potential of the digital solutions

– Better co-ordination among AfCFTA members to establish Single Customs Territories

The World Bank notes that while African exports of goods and services have seen their fastest growth in the past decade, the volumes remain low at just three per cent of global trade. The bank says boosting intra-regional trade requires improvement of physical integration, such as cross-border energy, transport and connectivity infrastructure, strengthening cooperation by harmonizing customs rules and procedures, and facilitating business integration through regional electronic settlement systems, an electronic cargo-tracking system, and easing restrictions on services trade.

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Digital Tech Can Reduce Emissions by up to 20% in High-Emitting Industries

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Digital technologies can reduce greenhouse gas emissions by up to 20% by 2050 in the three highest-emitting sectors: energy, mobility and materials. As businesses and governments respond to global calls for action to tackle climate change, significant efforts must be put in place to achieve net zero.

These new estimates are the result of a collaboration between the World Economic Forum and Accenture. However, a large gap remains between commitments and action. Estimates of current commitments indicate a projected emissions reduction of merely 7.5% when a 55% reduction is needed. Closing this gap will require high-emitting sectors to rethink efficiency, circularity and sustainability.

Digital solutions that can cut global emissions

Energy, materials and mobility constitute the highest emission sectors, contributing 43%, 26% and 24% respectively of total emissions in 2020. These industries can use four digital technologies to decarbonize their operations and value chains: foundational technologies such as big data analytics; decision-making technologies such as artificial intelligence/machine learning and digital twins; enabling technologies such as cloud, 5G, blockchain and augmented reality; and sensing and control technologies such as internet of things, drones and automation.

According to the estimates, digital solutions can reduce emissions by up to 8% in the energy sector by enhancing carbon-intensive processes, improving energy efficiency in buildings, and deploying and managing renewable energy.

In the materials sector, digital solutions can improve mining and upstream production and enhance efficiency and circularity of materials, reducing up to 7% of GHG emissions by 2050. The mobility sector can reduce emissions by up to 5% by supporting the transition from fossil fuel combustion to green molecules, improving supply chain efficiencies and optimizing travel routes.

“Digital technologies and business models are readily available levers for companies to accelerate their climate and energy transitions. Technology can bring transparency, efficiency and circularity to business processes and value chains. Shared learning and action by industry leaders and climate coalitions will be key to realizing the benefits of technology at scale while keeping its carbon footprint low,” said Manju George, Head of Platform Strategy, Digital Economy, World Economic Forum.

Lighthouse examples show what’s possible

The Forum is curating an inventory of lighthouse examples, companies that are leading the way in implementing digital technologies to reduce their carbon footprint and deliver economic growth to inspire more adoption and collaboration.

“The combination of digital and sustainability is already creating significant value across industries but many companies are still seeking the practical, strategic and impactful actions they must take now to realize the full impact of their ambitions and commitments,” said Kathleen O’Reilly, Global Lead, Accenture Strategy.“While every digital transformation will look different, the use of real-time data to enable sustainable decision-making, new-skilling opportunities for workforces to scale digital, and collaboration both within the organization and across the value chain will be core to the success of all.”

In each sector, digital technologies must be deployed together with new climate technologies and business models to deliver net zero. In addition, efforts to reduce emissions from the digital technologies themselves must continue, keeping their net impact on the planet overwhelmingly positive.

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Growing Alliance to Accelerate Digital Healthcare, Education, Finance

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The EDISON Alliance for digital inclusion has launched a new programme to accelerate digital inclusion in the “life critical” sectors of health, education and finance.

A network of “Lighthouse Countries” including Bahrain, Bangladesh and Rwanda will work with the United Nations Development Programme (UNDP) on the new programme in their respective countries. By facilitating new partnerships, incentivizing projects and unlocking capital at scale, the Lighthouse Countries Network will further the EDISON Alliance’s 1 billion lives vision of providing affordable digital solutions by 2025.

“More than a third of the world is still offline and left behind,” said Derek O’Halloran, Member of the Executive Committee, World Economic Forum. “Many countries are making great progress, but much work still needs to be done. The Lighthouse Country Network will provide a platform for countries both to learn from each other, showcase their successes and access a global network of partners and resources to accelerate their national goals”.

Inclusive digital transformation is a huge mission for any country that cannot be achieved by governments alone, and would require active participation from the local ecosystem – both public and private sector, said Achim Steiner, Administrator, UNDP. “We are glad to support the Lighthouse Countries Network, and we hope it will bring new momentum to more countries,” he said.

Rwanda continues to move towards a cashless economy supported by mobile payments. Working with the EDISON Alliance as a Lighthouse Country, it will prioritize innovative partnerships towards equitable and affordable access to smart mobile devices. “We are excited about the partnership possibilities on the important issue of devices, financial inclusion and broader digitalization that we can achieve through the EDISON Alliance,” said Paula Ingabire, Minister for ICT and Innovation, Rwanda.

Bahrain is prioritizing digital inclusion in education to provide digital skills and literacy training to students and to empower women and girls to enter Science, Technology, Engineering, and Mathematics (STEM) careers. The country will work with fellow EDISON Alliance member, Women in Tech, towards these goals. “Bahrain’s partnership with the EDISON Alliance reflects the Kingdom’s strong commitment to building an economy of ideas and creativity in which we invest in human capital and in which individuals make a return on investment in themselves,” said Shaikh Salman bin Khalifa Al Khalifa, Minister of Finance and National Economy, Bahrain.

Bangladesh is focusing on delivering affordable digital education to students by equipping teachers with digital skills. “Through the Lighthouse Countries Network, we hope to share our learnings with countries facing similar challenges, and partner with fellow EDISON Alliance Champions to better prepare our teachers and students with skills, education, employment and entrepreneurship – narrowing the digital skills gap and offering more opportunities for youth in Bangladesh,” said Zunaid Ahmed Palak, Minister of State for ICT, Bangladesh.

The World Economic Forum’s EDISON Alliance brings together leaders from across industries and governments to mobilize a global movement for digital inclusion. Less than one year since launching its 1 Billion Lives Challenge, the alliance has doubled the number of commitments from governments, organizations and companies to accelerate digitally inclusive solutions. This includes recent commitments from Bahrain, BBVA, Bharti Enterprises, Crescent Enterprises, Darsel, Dell, Digital Opportunity Trust, Ericsson, Inmarsat, Hewlett Packard Enterprise, Kredivo, NITI Aayog, and Nokia.

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