Innovate into a Responsible and Sustainable Future

Digital transformation is constantly creating new frontiers and opportunities for economies and industries worldwide. Globally, the market for digital transformation is expected to grow from US$469.8 billion in 2020 to US$1009.8 billion in 2025. AI will be one of the fastest-growing segments in this timeframe.

This creates a massive potential for job creation. According to the World Economic Forum, 6 million jobs could be created in the electricity and logistics sectors alone from 2016 to 2025 as a result of digitalisation.

At the same time, digital transformation exposes us to rising vulnerabilities. AI bias has become more prominent in ethical discussions in recent years, and for good reason — human bias in creating algorithms and training sets results in biased decision-making. In 2018, Amazon scrapped its AI recruiting engine after unveiling bias against women applicants. Racial bias has been detected in algorithms used by the US healthcare system and in Google’s automatic image-labelling service.

And even as Industry 4.0 technologies herald the possibilities of making more efficient use of resources, these systems have also been found to have a negative impact on sustainability due to their intensive use of raw materials and energy, as well as poor waste disposal practices.

As the COVID-19 pandemic set in, some of these issues have been rapidly brought to the fore. How can we better harness such new technologies while reining in their negative impact? We examine these issues from the ethical and sustainable perspectives by two thought leaders from the World Economic Forum who spoke at the Deep Tech Summit 2020 hosted by SGInnovate.

Insights by Ms Kay Firth-Butterfield, Head of AI and Machine Learning and Member of the Executive Committee, World Economic Forum

Since the emergence of AI and machine learning, why has it been particularly challenging to regulate these frontier technologies?

AI changes — you only have to look at Alpha Zero as an example of this ability to adapt. This makes it difficult to regulate, because what are you regulating? Companies have come up with ideas for internal regulation and governments like Singapore have created alternatives to old-fashioned regulation.

For example, my team worked with the Singapore government to create an ethical framework for companies that are going to be using innovation with Artificial Intelligence. There is that old phrase about innovation being impeded by regulation. Well here, Singapore put together something that will not impede innovation, but will give a roadmap to companies as they begin to innovate. Creating ethical frameworks for AI actually builds resilience for the future — because if we get it wrong and we have deployed it in education, healthcare, agriculture, aeronautics, then we have a big problem.

How can we build a more responsible and sustainable future, powered by AI?

AI can be an excellent tool to help human beings in the future — but it is vital that we build firm governance foundations for applications of the technology now. That could be based on the level of risk of the application, although not necessarily.

I have been talking about ethical or responsible AI, but I think that businesses should think of it as being problems that they have to solve if they want their AI tools to work well. One Gartner study says that by 2022, if you do not start tackling bias, 85% of algorithms that you create will be erroneous. There is no point in putting R&D into creating algorithms if you are going to end up with that problem. So, I think that it is an important place to start: what are the problems and how do we deal with the problems so that we can go on and do some of the fantastic work that we are capable of doing?

I may sound as if I am a naysayer, but I am really not. I believe passionately in the power of AI to do good. But we do need to make sure that we do not bring the problem along with us. Our duty to the world as a whole is to see that everybody has their boats lifted by the Fourth Industrial Revolution.

You have been an advocate of evening out the AI gender gap. What measures can be taken to change the ratio?

The only way to do this job well is to bring diverse teams into the creation of AI applications. That means not just diversity of gender, but also race, culture, age and educational background. Humanities and sciences are equally necessary to the creation of AI applications that advance human well-being.

How far along are technology businesses around the world in having a strong diversity and inclusion strategy to attract top talent and drive innovative results? What do you think organisations can do, or do better, to further support the growth of diversity and inclusion in AI and technology?

Even organisations that have been trying to attract women for years have problems; even the most progressive ones cannot attract enough women as developers of AI because they are not out there. We need to change our education system, but also remember that science and the development of AI do not occur in a vacuum. We need those with a close understanding of society too — an area traditionally understood and studied by women. Also, women are particularly hit by the pandemic, so things are likely to be worse than better if governments do not support them in getting back into the workforce.

Insights by Ms Antonia Gawel, Head of Circular Economy Initiative, World Economic Forum

How are businesses capitalising on the circular economy today? What are the key challenges and gaps we face in pursuing a global circular economy?

Let me take two sectors. One is electronics waste (e-waste). On one side, it is a positive story. And on the other side, it is quite a frightening one.

E-waste is the largest growing sector of waste globally, which is unsurprising — we are all probably sitting in front of about five or six electronic devices at the moment. A positive thing is that it is keeping us connected. The other side of that, though, is that there is about $63 billion worth of value in unleveraged electronic waste every year. It is just sitting there.

The challenge here is that the costs and benefits of getting to those resources, extracting them, and integrating them back into the system are not always aligned. There are, however, companies that have recognised this and are starting to take action. We are working with companies like Dell, Philips, Apple and a number of others who have set clear targets to be able to integrate materials back into their production system, as well as rethink the way that they design those products to be able to do that effectively. Because in the design phase, if you are not thinking about the recovery of materials, it is going to be a lot harder to re-capture them back into your system.

There are challenges to doing this in practice. One is economics. The distributed nature of a lot of these products makes it quite challenging to get the materials back, but it is not unsolvable.

The other thing is that to be able to implement this, policies need to be aligned. In a number of countries — and for good reason — a lot of these waste materials and products are classified as hazardous waste. Careful regulations have been put in place. But this makes it difficult to move these things back to production manufacturing sites.

And so we need to rethink a system that has, from a regulatory policy perspective, been designed to control the management of dumping hazardous waste and shift towards thinking about the safe recovery of materials to reintegrate them into the production systems.

Plastics are another example. Some of the biggest plastics users in the system are now setting firm targets to recover all of that plastic to be able to make sure that it isn't having a hazardous impact on the environment.

But I do want to emphasise that, that is not enough. It is not just about waste. This is the important thing about the circular economy: we need to look at the systems upstream. Why do we have so much plastic in our system that we need to eliminate? We do not need all of this material in the system in the first place. So we’re trying to push two agendas: cleaning up waste, as well as rethinking the design of the way that we distribute goods and services such that we don't need plastic material in the first place.

How can we unlock opportunities to foster stronger innovations towards building a circular economy?

In terms of innovation, the startup space is the area that gives me the most hope and enthusiasm when it comes to the circular economy. It is these disruptors, innovators and entrepreneurs that are leveraging the technological tools that we have today to be able to come up with new ways of thinking.

Yes, measuring today's circularity is important, but the mindset that the circular economy provides us with is one that enables us to think outside of the current system and the current silos to ask: “How can we rethink and do things completely differently?” And this is where the entrepreneurs and innovators have an incredibly important role to play.

The question is, how do you create the incentives and the opportunity for investors to invest in innovation related to the circular economy, and for entrepreneurs to play in that ecosystem?

How can we build a better ecosystem to support entrepreneurs and players to create a sustainable circular economy?

If you think about the plastics movement, the challenge of single-use plastics and their impact on the environment have been around for decades. A number of agencies have been reporting on this, and scientists have been studying this. But it was in 2016 or 2017 that suddenly, the sentiment changed among the public — there was an uptick in recognition that this was not something people desired.

And around five to 10 years before that, some early-moving entrepreneurs had already started finding solutions for everything — from new delivery models to better service customers, to a used packaging model to alternative solutions to plastics like bio-based materials.

But since 2017 or 2018, when the big corporates and governments suddenly started to pay attention to this issue, you started seeing a lot more funds. Morgan Stanley even launched a big fund for the circular economy. A lot of dedicated funds now are going into supporting startups to find alternatives to plastics

You always need your trailblazers and early movers, and this is where the startup ecosystem begins to build some momentum. But actually, the tipping point comes when you have the market buyers, as well as the policy and the finance available to scale those businesses and incentivise more entrance into the market. You need the conditions around entrepreneurs to facilitate that scale and success. It is not possible to fight against the curve forever.

We then need to create systems that enable these entrepreneurs to connect to those players, to play their trailblazing role, to change the policies and to create the markets and systems.

How has the pandemic affected the circular economy? What can we learn from it to build a better, sustainable environment?

COVID-19 has certainly put a spotlight on how fundamentally unsustainable the economics of a lot of our large-scale value chains are. That is, in particular, connected to the workers in those value chains — and it is connected to the pricing and the fact that a lot of the externalities in our products are not accounted for.

Take the fashion textiles industry as an example. With the rapid drop in demand during the pandemic, millions of workers were let go without any social security or safety net at all. These are the workers that are producing the clothes that we wear half as long, throw away twice as quickly, and buy double the amount of.

So these things are connected. The pandemic has unearthed the unsustainable economic conditions that, in the COVID context, have hit the [workers] the most. It’s a wake-up call for us to look at the entire system to say: “Look, how do we rebuild this? How do we build this back in a way that is not only more sustainable for the individuals within that supply chain, but also impacts the environment?”

Take a lot of the workers within the circular economy. The waste pickers who work in a lot of countries have been brought to the fore, with a recognition that they do not have the necessary equipment to be safe. But this is the livelihood that they require to be able to sustain their families.

I hope that we step back and look at the system that has been created and rethink the economics of it that ultimately impact the way we are extracting resources from the environment, the incentives for the circular economy, and the individuals within that system who are suffering incredibly as a result of COVID. It is easy for us to forget about that when we sit in places like Europe and North America where the systems are better. I hope we will not forget.

Learn more about what we at SGInnovate, together with our global partners, are doing to advance innovations for social and economic good through the Deep Tech for Good initiative.