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Industrial applications of artificial intelligence and big data

The deployment of artificial intelligence (AI) is critical for the success of small and medium-sized enterprises (SMEs) in the EU. In industrial sectors in particular, AI solutions are becoming ever more important as they help to optimize production processes, predict machinery failures and develop more efficient smart services. European industry can also harness big data and the smart use of ICT to enhance productivity and performance, and pave the way for innovation. 

Critical industrial applications of AI for SMEs

We launched a study to explore the most critical AI applications to accelerate their uptake by SMEs within strategic European value chains. Small and medium enterprises (SMEs) struggle more than large companies to keep up with the pace of digital transformation and industrial transition in general. They face specific challenges that could hamper wide AI adoption, reducing overall economic benefits for the European economy.

The study finds that there is a sound base of existing EU and national policy and initiatives that promote the uptake of advanced technologies. Yet, the key to success is to maintain policy focus on strategic priorities and increase coordination among them. See the reports on artificial intelligence for more insights.

Reports on Artificial Intelligence – critical industrial applications

Background

Artificial intelligence (AI) is now a priority for businesses, but also for policymakers, academic research institutions and the broader public. AI techniques are expected to bring benefits for governments, citizens and businesses, including in the fight against Covid-19, enabling resilience and improving green, sustainable growth. At the same time, AI has the potential to disrupt and possibly displace business models as well as impact the way people live and work.

The study advocates that while AI’s incremental GDP impact is initially moderate (up to 1.8% of additional cumulative GDP growth by 2025), there is significant potential in the longer-term (up to 13.5% of cumulative GDP growth by 2030), with disparities between regions and different industries. However, the potential of AI will fully materialise if European businesses, and in particular SMEs, are properly supported in their AI transition and grasp the competitive advantages it can provide.

AI is likely to have the largest economic impact on

  • manufacturing and the Industrial Internet of Things – IIoT, with overall AI impact potential in Europe of up to €200 billion by 2030
  • mobility, with AI impact potential of €300 billion
  • smart health, with AI impact potential of €105 billion

Foresight analysis of the effects of AI and automation technologies on the European labour market demonstrates significant effects in at least four ways

  1. labour substitution (with capital) is likely to displace parts of the workforce
  2. investment in AI and AI-enabled product and service innovation may create new direct jobs
  3. wealth creation may create positive spillover effects for the economy
  4. AI could enable higher participation in global flows (data and trade), creating additional jobs

These topics were initially debated during the conference, ‘A European perspective on Artificial Intelligence: Paving the way for SMEs’ AI adoption in key industrial value chains‘ held in Brussels in February 2020, with over 200 stakeholders.

Business-to-business big data sharing and access

In spite of huge economic potential (see below), data sharing between companies has not taken off at sufficient scale. The Commission seeks to identify and address any undue hurdles hindering data sharing and the use of privately-held data by other companies, as announced in the February 2020 Communication, ‘A European strategy for data’.

On business-to-business (B2B) data sharing, we are deploying two big data pilot projects to explore the innovation potential and innovative business models created by sharing data between data-producing/controlling entities and third-party businesses, notably SMEs. These pilot projects are being carried out in two strategic value chains: smart health (where the aim is to use data on diabetes from healthcare providers) and automotive (where sharing in-vehicle data produced by connected vehicles will be examined). Both projects are part of the ‘Big data and B2B platforms: the next frontier for Europe’s industry and enterprises’ study being carried out from 2019 to 2021.

Background

By harnessing the intelligence of big data and digital platforms, European industries can enhance productivity and performance, increase profitability, strengthen their competitive advantage, reduce risk, and pave the way for innovation. According to the Big data and B2B platforms report by the Strategic Forum on Digital Entrepreneurship, industrial companies are expected to make 3.6% per year in cost reductions over the next five years by basing business decisions on big data analytics. The big data European economy is expected to grow almost three times by 2025, reaching an estimated €829 billion, or 5.8% of EU GDP.

Sourse: https://ec.europa.eu/growth/industry/policy/advanced-technologies/industrial-applications-artificial-intelligence-and-big-data_en

Regulatory framework proposal on Artificial Intelligence

The Commission is proposing the first ever legal framework on AI, which addresses the risks of AI and positions Europe to play a leading role globally.

The regulatory proposal aims to provide AI developers, deployers and users with clear requirements and obligations regarding specific uses of AI. At the same time, the proposal seeks to reduce administrative and financial burdens for business, in particular small and medium-sized enterprises (SMEs). 

The proposal is part of a wider AI package, which also includes the updated Coordinated Plan on AI. Together they guarantee the safety and fundamental rights of people and businesses, while strengthening AI uptake, investment and innovation across the EU.

Why do we need rules on AI?

The proposed AI regulation ensures that Europeans can trust what AI has to offer. While most AI systems pose limited to no risk and can be used to solve many societal challenges, certain AI systems create risks that need to be addressed to avoid undesirable outcomes. 

For example, it is often not possible to find out why an AI system has made a decision or prediction and reached a certain outcome. So, it may become difficult to assess whether someone has been unfairly disadvantaged, such as in a hiring decision or in an application for a public benefit scheme.

Although existing legislation provides some protection, it is insufficient to address the specific challenges AI systems may bring.

The proposed rules will:

  • address risks specifically created by AI applications
  • propose a list of high-risk applications 
  • set clear requirements for AI systems for high risk applications
  • define specific obligations for AI users and providers of high risk applications
  • propose a conformity assessment before the AI system is put into service or placed on the market
  • propose enforcement after such an AI system is placed in the market
  • propose a governance structure at European and national level

A risk-based approach

source: digital-strategy.ec.europa.eu

Unacceptable risk: All AI systems considered a clear threat to the safety, livelihoods and rights of people will be banned, from social scoring by governments to toys using voice assistance that encourages dangerous behaviour.

High-risk: AI systems identified as high-risk include AI technology used in:

  • Critical infrastructures (e.g. transport), that could put the life and health of citizens at risk; 
  • Educational or vocational training, that may determine the access to education and professional course of someone’s life (e.g. scoring of exams); 
  • Safety components of products (e.g. AI application in robot-assisted surgery);
  • Employment, workers management and access to self-employment (e.g. CV-sorting software for recruitment procedures);
  • Essential private and public services (e.g. credit scoring denying citizens opportunity to obtain a loan); 
  • Law enforcement that may interfere with people’s fundamental rights (e.g. evaluation of the reliability of evidence);
  • Migration, asylum and border control management (e.g. verification of authenticity of travel documents);
  • Administration of justice and democratic processes (e.g. applying the law to a concrete set of facts).

High-risk AI systems will be subject to strict obligations before they can be put on the market: 

  • Adequate risk assessment and mitigation systems;
  • High quality of the datasets feeding the system to minimise risks and discriminatory outcomes; 
  • Logging of activity to ensure traceability of results
  • Detailed documentation providing all information necessary on the system and its purpose for authorities to assess its compliance; 
  • Clear and adequate information to the user; 
  • Appropriate human oversight measures to minimise risk; 
  • High level of robustness, security and accuracy.

In particular, all remote biometric identification systems are considered high risk and subject to strict requirements. Their live use in publicly accessible spaces for law enforcement purposes is prohibited in principle. Narrow exceptions are strictly defined  and regulated (such as where strictly necessary to search for a missing child, to prevent a specific and imminent terrorist threat or to detect, locate, identify or prosecute a perpetrator or suspect of a serious criminal offence). Such use is subject to authorisation by a judicial or other independent body and to appropriate limits in time, geographic reach and the data bases searched.

Limited risk, i.e. AI systems with specific transparency obligations: When using AI systems such as chatbots, users should be aware that they are interacting with a machine so they can take an informed decision to continue or step back. 

Minimal risk: The proposal allows the free use of applications such as AI-enabled video games or spam filters. The vast majority of AI systems currently used in the EU fall into this category, where they represent minimal or no risk. 

How does it all work in practice for providers of high risk AI systems?

Once the AI system is on the market, authorities are in charge of the market surveillance, users ensure human oversight and monitoring, and providers have a post-market monitoring system in place. Providers and users will also report serious incidents and malfunctioning.

Future-proof legislation

As AI is a fast evolving technology, the proposal is based on a future-proof approach, allowing rules to adapt to technological change. AI applications should remain trustworthy even after they have been placed on the market. This requires ongoing quality and risk management by providers. 

Next steps

Following the Commission’s proposal in April 2021, the regulation could enter into force in the second half of 2022 in a transitional period. In this period, standards would be mandated and developed, and the governance structures set up would be operational. The second half of 2024 is the earliest time the regulation could become applicable to operators with the standards ready and the first conformity assessments carried out.

Source: https://digital-strategy.ec.europa.eu/

Digital transformation: importance, benefits and EU policy

Learn how the EU is helping to shape a digital transformation in Europe to benefit people, companies and the environment.

The digital transformation is one of the EU’s priorities. The European Parliament is helping to shape the policies that will strengthen Europe’s capacities in new digital technologies, open new opportunities for businesses and consumers, support the EU’s green transition and help it to reach climate neutrality by 2050, support people’s digital skills and training for workers, and help digitalise public services, while ensuring the respect of basic rights and values.

In May 2021, Parliament adopted a report on shaping the digital future of Europe, calling on the European Commission to further tackle challenges posed by the digital transition and especially take advantage of the opportunities of the digital single market, improve the use of artificial intelligence and support digital innovation and skills.

What is digital transformation?
  • Digital transformation is the integration of digital technologies by companies and the impact of the technologies on society.
  • Digital platforms, the Internet of Things, cloud computing and artificial intelligence are among the technologies affecting …
  • … sectors from transport to energy, agri-food, telecommunications, financial services, factory production and health care, and transforming people’s lives.
  • Technologies could help to optimise production, reduce emissions and waste, boost companies’ competitive advantages and bring new services and products to consumers.

Funding of the EU’s digital priorities

Digital plays an essential role in all EU policies. The Covid crisis accentuated the need for a response that will benefit society and competitiveness in the long run. Digital solutions present important opportunities and are essential to ensuring Europe’s recovery and competitive position in the global economy.

The EU’s plan for economic recovery demands that member states allocate at least 20% of the €672.5 billion Recovery and Resilience Facility to digital transition. Investment programmes such as the research and innovation-centred Horizon Europe and infrastructure-centred Connecting Europe Facility allocate substantial amounts for digital advancements as well.

While the general EU policy is to endorse digital goals through all programmes, some investment programmes and new rules specifically aim to achieve them.

Digital Europe programme

In April 2021, Parliament adopted the Digital Europe programme, the EU’s first financial instrument focused specifically on bringing technology to businesses and people. It aims to invest in digital infrastructure so that strategic technologies can help boost Europe’s competitiveness and green transition, as well as ensure technological sovereignty. It will invest €7.6 billion in five areas: supercomputing (€2.2 billion), arfitifical intelligence (€2.1 billion), cybersecurity (€1.6 billion), advanced digital skills (€0.6 billion), and ensuring a wide use of digital technologies across the economy and society (€1.1 billion).

Online safety and platform economy

Online platforms are an important part of the economy and people’s lives. They present significant opportunities as marketplaces and are important communication channels. However, there also pose significant challenges.

The EU is working on new digital services legislation, aiming to foster competitiveness, innovation and growth, while boosting online security, tackling illegal content, and ensuring the protection of free speech, press freedom and democracy.

Read more on why and how the EU wants to regulate the platform economy

Among measures to ensure safety online, the Parliament adopted new rules to prevent the dissemination of terrorist content online in April 2021. MEPs are also considering rules on a new European cybersecurity centre. In May 2021, MEPs backed a new European cybersecurity centre and network that will increase Europe’s capacity against cyber threats.

Artificial intelligence and data strategy

Artificial intelligence (AI) could benefit people by imroving health care, making cars safer and  enabling tailored services. It can improve production processes and bring a competitive advantage to European businesses, including in sectors where EU companies already enjoy strong positions, such as the green and circular economy, machinery, farming and tourism.

To ensure Europe makes the most of AI’s potential, MEPs have accentuated the need for human-centric AI legislation, aimed at establishing a framework that will be trustworthy, can implement ethical standards, support jobs, help build competitive “AI made in Europe” and influence global standards. The Commission presented its proposal for AI regulation on 21 April 2021.

Read more on how MEPs want to regulate artificial intelligence

The success of AI development in Europe ilargely depends on a successful European data strategy. Parliament has stressed the potential of industrial and public data for EU companies and researchers and called for European data spaces, big data infrastructure and legislation that will contribute to trustworthiness.

More on what Parliament wants for the European data strategy

Digital skills and education

The Covid-19 pandemic has demonstrated how important digital skills are for work and interactions, but has also accentuated the digital skills gap and the need to increase digital education. The Parliament wants the European skills agenda to ensure people and businesses can take full advantage of technological advancements.

42% of EU citizens lack basic digital skills

Fair taxation of the digital economy

Most tax rules were established well before the digital economy existed. To reduce tax avoidance and make taxes fairer, MEPs are calling for a global minimum tax rate and new taxation rights that would allow more taxes to be paid where value is created and not where tax rates are lowest.

Artificial Intelligence: first quantitative study of its kind finds uptake by businesses across Europe is on the rise

The European Commission has published the first quantitative overview on the uptake of Artificial Intelligence (AI) technologies among European enterprises. This study will help monitor the adoption of AI in Member States and further assess the challenges faced by enterprises, for their internal organisation and externally.

AI uptake across European enterprises

The robust survey found that four in ten (42%) enterprises have adopted at least one AI technology, with a quarter of them having already adopted at least two. Almost twice the proportion of large enterprises (39%) use two or more AI technologies compared to micro (21%) and small enterprises (22%). A total of 18% have plans to adopt AI in the next two years, while 40% of the enterprises participating do not use AI, nor do they plan to in the future. Overall awareness of AI amongst companies is however high across the EU, standing at 78%.

Challenges to AI technology adoption across Europe

The study also found three key internal barriers that enterprises are facing when adopting AI technologies: 57% experienced difficulties in hiring new staff with the right skills, while just over half (52%) said the cost of adopting AI technology was a barrier for their enterprise. The cost of adapting operational processes was also one of the three key issues (49%). Reducing uncertainty can be beneficial, as enterprises find liability for potential damages (33%), data standardisation (33%) and regulatory obstacles (29%) to be major external challenges to AI adoption.

Next steps

The “European enterprise survey on the use of technologies based on artificial intelligence”, will be used to monitor the adoption of AI across Member States and to assess the obstacles and barriers in the use of AI. In addition, it will present an overview of AI-related skills in the workforce. It will also help the Commission to shape future policy initiatives in the field of AI.

Background

The study was carried out for the European Commission by the market research company Ipsos together with iCite. A robust survey instrument was designed and fielded in EU Member States, as well as Norway, Iceland and the UK. A total of 9640 enterprises took part between January and March 2020. The five key performance indicators measured by the survey were AI awareness, adoption, sourcing, external and internal obstacles to adoption. The study used Computer Assisted Telephone Interviewing to obtain representative country estimates.

Artificial intelligence has become an area of strategic importance and a key driver of economic development. It can bring solutions to many societal challenges from treating diseases to minimising the environmental impact of farming. However, socio-economic, legal and ethical impacts have to be carefully addressed.

Source: https://digital-strategy.ec.europa.eu/