The rapid growth of responsible AI

New applications of AI can help businesses unlock new levels of productivity while also ensuring the technology benefits everyone.

Artificial intelligence has become big business — and the pace of innovation is only picking up. According to Deutsche Bank, 175,072 AI patents were filed between 2012 and 2022, with more than half of them coming in those final three years. The bank anticipates a dramatic spike this year and next in companies adopting AI applications, especially in such fields as product development, sales, marketing and human resources. Legal firms now use AI to generate contracts; travel companies rely on chatbots to provide help during the booking process. Already, the global AI market is worth roughly U.S.$136.6 billion, and it’s on track to reach U.S.$1.3 trillion by 2032. Patents for AI innovations, as seen in the figure below, are being filed in many different sectors. From 2022 to 2030, AI use by organizations around the world is expected to expand at a compound annual growth rate of more than 38 percent.

Patent families by co-occurrence of application fields with machine learning and functional applications

Machine learning co-occurs most frequently with the life and medical sciences and telecommunications fields; computer vision with telecommunications and transportation

Source: WIPO Technology Trends

It’s clear that AI adoption is climbing at a breakneck rate. Experts predict that as computational power grows exponentially, the capabilities of these AI applications — in reasoning, in accuracy, in specialization and in personalization — will skyrocket. At the same time, regulations and policy can take much longer to develop. The European Union spent three years drafting its 125-page law to regulate artificial intelligence, introduced in April 2021. But none of those 125 pages mentioned generative AI, the breakthrough that powers applications like ChatGPT and that blindsided lawmakers. While regulators work to catch up, business leaders need to take their own steps to ensure that the technology being developed and used today doesn’t have harmful consequences. Policy-makers are having to play catch up. For instance, a bipartisan group of U.S. House representatives proposed new legislation in January to regulate the use of AI to create clones or likenesses of artists. As the technology develops, it’s important for business leaders and policy-makers to ensure AI is used in the service of society.

Canada leads and lags in AI

For more than 30 years, Canadian scientists have played a vital role in developing the foundation for AI technologies. In 2017, Canada became the first nation to launch a national AI strategy. When it comes to average year-over-year growth in AI talent concentration, as well as publications per capita from AI researchers, Canada outpaces all other G7 nations. Canada has one of the highest rates of AI patents filed and one of the highest per-capita levels of VC investment in AI enablers, developers and users. McKinsey recently named Toronto one of 16 global hubs focused on advancing AI and its technologies.

But when it comes to businesses actually using AI, the story looks quite different — and Canada is in danger of falling behind. A recent KPMG survey reported that only 35 percent of large Canadian businesses currently use AI in their operations, compared to 72 percent of large U.S. businesses. Small businesses fare even worse: by 2021 only 3 percent were using AI, Toronto Metropolitan University found in a recent report, and rates of adoption are lower still among several equity-seeking groups. Currently, companies owned by women, Indigenous people and people with disabilities are far less likely than other companies to use AI.

By failing to take advantage of AI, businesses miss out on many opportunities to remain competitive with their global peers and, especially, to boost their productivity, which is directly tied to higher wages and higher standards of living in this country.

Number of enablers, developers and users who received VC investment in FY22 per province

Source: Deloitte

AI R&D funding, FY2022

Source: Deloitte

Definitions

Artificial intelligence (AI) is the science and engineering of making computer programs that can simulate human intelligence.

Generative AI is a type of artificial intelligence technology that can produce text, images, audio and synthetic data.

Machine learning is a branch of artificial intelligence, in which computer systems are able to learn and adapt by using algorithms and statistical models to analyze data.

Responsible AI is the practice of designing, developing and using artificial intelligence with good intention to support employees and businesses and fairly benefit customers and society.

Tech stewardship is a professional identity, orientation and practice that enables people to identify work-related opportunities that help make positive use of technology.

Barriers to adoption

“Weak productivity growth has been a serial problem in Canada,” says Bank of Canada governor Tiff Maclem. AI offers the potential to address that head-on, unlocking new capabilities and increasing efficiencies across a myriad of sectors. Google estimates generative AI could save the average worker in Canada about 100 hours a year. And research from Goldman Sachs suggests generative AI could spur productivity growth by 1.5 percentage points over 10 years. All told, according to estimates by McKinsey, generative AI’s impact on productivity could add the equivalent of up to $4.4 trillion in value to the global economy every year.

That said, implementing new technologies demands resources as well as considerable time: it can take up to five years to fully integrate AI into an enterprise. A significant majority of Canadian businesses have yet to implement this technology. According to the 2021 Survey of Digital Technology and Internet Use conducted by Statistics Canada, the biggest barrier to adoption is a lack of motivation: 69 percent of businesses that don’t use AI say they have not identified a business need for it. The next-biggest barrier is a lack of awareness: 28 percent of those businesses acknowledge that they don’t know what tools are available. The cost of AI technologies and the skills gap in companies’ workforce were also cited as obstacles to adoption, as were legal, privacy and security concerns.

When it comes to generative AI specifically, a recent report from the AI Accelerator Institute found that a  lack of knowledge is the main reason companies don’t use these models. Some businesses have misconceptions about generative AI’s limitations, while some overestimate what the technology can do, leading to disappointment. Others are concerned around data privacy and intellectual property, or are distrustful of the outputs.

Improved awareness of the uses and benefits of generative AI can help to alleviate decision-makers’ concerns. Testing out AI applications can establish how companies might use this technology to solve specific problems in their business or industry. Many Canadian startups are gaining the trust of corporations by implementing good practices to ensure the technology will be used responsibly, as well as demonstrating real-world use cases of their AI solutions and offering free trials.

Understanding the benefits of responsible AI

New technologies also bring new risks, and when it comes to AI, there can be a lack of transparency in how algorithms make decisions, and how those decisions can replicate and reinforce biases. There are also concerns about how companies address data privacy when using AI tools. These issues can negatively impact customers’ trust in businesses that use AI.

Responsible AI involves designing, developing and using AI systems that are safe, transparent, traceable and non-discriminatory — and governments around the world are making it a priority. The European Union Artificial Intelligence Act (EU AI Act) categorizes AI systems according to the level of risk they pose to fundamental rights and user safety. The Government of Canada has established guiding principles on the effective and ethical use of AI, and in December called out special consideration for vulnerable groups such as children and communities that have historically experienced discrimination and bias. Investors and corporations are also increasingly looking for companies to adhere to certain principles to help ensure the responsible application of AI. Radical Ventures recently released an assessment tool to help VCs assess early-stage AI businesses, and some organizations are incorporating responsible AI as part of the ESG framework.

The widespread use of responsible AI, most importantly, benefits society. But responsible AI can also benefit businesses by minimizing bias in their data, ensuring transparency in their processes, supporting internal governance of AI systems, and protecting the privacy and security of client data.

Supporting tech stewardship

To ensure that new technologies are beneficial for everyone, businesses and customers must actively engage in tech stewardship. This practice involves the development and use of technology that is purposeful, responsible, inclusive and regenerative. It’s achieved by designing and implementing technology with the intention of creating a positive impact; by anticipating, monitoring and managing the complex impacts of technology; by broadening who and what is involved in decision-making; and by choosing to care for the environment, the economy, communities and individuals.

“There is a tendency to view technology too narrowly. By better understanding the full impacts of technology on people and society, and considering the underlying values that are involved, tech stewards uncover new opportunities”
– Mark Abbott, director of Tech Stewardship

Canadian ventures can differentiate themselves as tech stewards by considering any technology’s social and ethical implications. They can also empower their teams to use technology that drives business success while creating a positive impact. This can promote tech stewardship across networks and industries.

“There is a tendency to view technology too narrowly. By better understanding the full impacts of technology on people and society, and considering the underlying values that are involved, tech stewards uncover new opportunities,” says Mark Abbott, director of Tech Stewardship at MaRS Discovery District. “For companies, this can yield opportunities to grow profit and positive impact. Beyond specific opportunities, building tech stewardship into a company’s culture can lead to sustainable competitive advantage as it enables them to more quickly and effectively realize the potential of the technologies of today and tomorrow.”

By the numbers

*Startups are defined as companies that were active in the last five years, have received at least one investment deal in the last five years that is more than U.S.$1 million. AI companies included those that are either AI developers, offered AI services, used AI to drive their services, or had plans to implement AI in their businesses within two years.

Source: Deloitte

Canadian ventures engaged in responsible AI

The following six ventures in the MaRS portfolio are leaders in AI and machine learning. These companies are working on solutions that can help companies use AI responsibly to enhance their productivity, identify key insights, improve customer service and transform their business.

Combined, these six ventures:

• Employ more than 465 people
• Have earned more than $27 million in revenue
• Raised more than $278 million in capital

Interested in innovations in applied AI? Reach out to [email protected] for insights and discussions on potential partnerships.

This article first appeared on MaRS Discovery District.