The European Union’s AI Act comes into effect this month. It is an important step in establishing a regulatory framework for an increasingly powerful technology that has the potential to shape the future of Irish business.
As the groundbreaking Act moves from legislation to implementation over the coming three years, commentary has intensified on its likely impact on innovation. Critics argue that stringent regulation could stifle Europe’s ability to compete globally, particularly against AI powerhouses such as the US and China. Some believe that it could lock Irish businesses into an “AI dark age”.
In truth, the relationship between regulation and innovation is nuanced. While the US is pushing ahead with a lighter-touch approach to regulation, arguably leading to quicker technological advancements, a path without boundaries is fraught with risk.
With our strong transatlantic ties and our role as the EU headquarters for many global technology firms, Ireland can help mitigate fears of an “AI slow lane” by positioning the State as the leading regulatory hub in Europe. By taking the lead in how rules under the EU’s AI Act are implemented over the coming years, Ireland can have a first-mover advantage, setting out an approach that enables businesses to innovate while building trust in this evolving technology.
Effective regulation can coexist with innovation. A well-crafted regulatory framework provides clarity and certainty for businesses, helping to secure investments and foster a stable environment for technological advancements.
As we look to bring the new rules surrounding AI to life, we can learn from similar deployments in the past. GDPR, for example, helped to protect personal data but it’s not without its critics. Some technology firms based in Ireland have claimed GDPR has posed challenges for AI innovation by limiting data access and creating data barriers between European countries.
Regulatory sandboxes are one of the tools that can be deployed to help Irish businesses to innovate responsibly. They provide a safe space in which businesses can test AI products and services under a regulator’s supervision.
These sandboxes have been successfully employed in the UK fintech industry and enabled the development of autonomous vehicles in Singapore. Above all, they illustrate how innovation can thrive within a controlled, safe environment that allows for safe experimentation.
However, a collaborative approach to regulation alone will not be enough to position Ireland as an AI leader. Additional steps are required to foster a world-leading AI environment that can compete with that of the US and China.
The Irish Management Institute (IMI) is working closely with Irish chief executives, technology officers and HR leaders to understand the complex leadership challenges posed by AI and the ingredients needed to unlock its business benefits.
While a pro-innovation approach to policy is critical in the long term for businesses adopting AI technologies, it doesn’t automatically lead to organisations and their people embracing AI at speed right now.
Business leaders have a pivotal role to play. In fact, they are the most important stakeholder in driving change and creating a culture of innovation where employees can successfully create and adapt to evolving technologies. It is not surprising that “leadership capabilities” emerged as the top business priority in the latest IMI Leadership Barometer.
The creation and deployment of successful AI initiatives will hinge not solely on technology, but also on the organisational structures and leadership strategies that guide and facilitate them. We have seen first-hand that the biggest enabler of successful digital transformation projects is not the technology itself, but the organisational and leadership structures around the project.
“Skills” emerged as the second most important business priority for leaders navigating the era of AI. Our research shows only one in four business leaders feel they have the skills and capabilities to harness AI within their organisations.
Even more concerning, the OECD has raised concerns about the competitive vulnerability of Irish workers to the deployment of AI and automation, with a lack of participation in lifelong learning placing many Irish workers at risk of falling behind.
It is vital that Government, industry and the education and learning sector come together to close the emerging AI skills gap. Collectively, we need to ensure that every leader has the capability to lead their team through change while also ensuring every staff member has the skills and tools to understand, use and create value with and from AI.
In a world increasingly shaped by AI, the most successful teams are not necessarily technology experts but their organisations place a strong emphasis on continuous learning and upskilling.
The EU AI Act heralds a new era of technological governance, and Ireland stands at a crossroads. We have a real opportunity to shape the future of AI as regulatory leaders in Europe.
Ireland’s approach to AI is ours to shape. The time to lead is now. By acting with clarity, courage and a collaborative spirit, Ireland can play a key role in creating real and sustainable value from the AI revolution under way.
Shane O’Sullivan is chief executive of the Irish Management Institute
