Artificial intelligence (AI) is the coolest game in town. Everyone is excited about it. Multimillion-dollar investment announcements in the sector are now a regular occurrence.
From the big dominant tech players such as Google, Microsoft and Meta, to Elon Musk’s newest venture and soaring AI stocks in the top global stock exchanges, AI developments are now a priority for businesses all over the world. Many companies and industries are already integrating AI systems into their products and services.
As usual, lawmakers are behind the speed of technology. However, politicians are finally catching up, mostly driven by the “potential existential risk” of AI.
As regulatory pressures increase, companies in the Nearshore should prepare for what will likely become a rapidly changing operational landscape around AI.
AI regulations are slowly coming into force in various countries, including France, Germany, China and Canada.
At a multilateral level, in 2021, more than 190 countries adopted the first-ever UN-sponsored global agreement on the ethics of artificial intelligence. Two years before that, around 40 countries signed the Organization for Economic Co-operation and Development (OECD) Principles on Artificial Intelligence.
Companies in the Nearshore should prepare for what will likely become a rapidly changing operational landscape around AI
The list of regulatory actions will likely continue to increase in the next few months and years. In the US, lawmakers are aggressively looking into legislative options on AI. In a recent congressional hearing, OpenAI CEO Sam Altman urged lawmakers to regulate AI, arguing that the technology requires robust government oversight.
Potential Extraterritorial Nature of AI Regulation
Even when governments implement national AI guidelines, these regulations will likely have an extraterritorial effect. For companies in the BPO/KPO industry, the ramifications of these actions might impact the core of their businesses.
BPO/KPO firms usually operate with third-party data and manage employees and client relationships in various jurisdictions simultaneously.
Any regulatory action in the US has the potential to affect nearshore operations as well.
Companies with this exposure should prepare contingency plans to effectively respond to market changes and guarantee business continuity.
Learning From the Past
Fortunately, there are multiple recent experiences of technological regulatory changes. From recent steps to protect users’ privacy online, to banning practices such as revenge porn and a limit to online bullying, lawmakers are now taking more action.
However, it is clear that regulators usually take their time before implementing strong measures. AI remains mostly unregulated, but that does not mean that it will stay that way.
Companies should study past experiences in leading markets to develop legal and business strategies that allow them to use this technology within any future framework.
Who is Ready?
Recent studies show that there is a significant disparity between industries and geographies in terms of AI readiness.
A Boston Consulting Group (BCG) survey proved that Asia-Pacific companies are more likely than their counterparts in Europe and North America to have an AI ethics officer. In the same poll, the telecommunications, technology and consumer sectors reported the highest levels of preparedness.
How are Latin America and the Caribbean doing on this matter? A few countries in the region have developed or are in the process of developing a national AI strategy. Argentina, Brazil, Chile, Colombia, Mexico, Peru and Uruguay lead a growing AI interest in the region. However, as in many other jurisdictions, lawmakers and regulators are slow.
Responsibility VS Competitive Advantage
AI is producing an arms race among many companies. Even Elon Musk called for a pause in the development of AI systems in order to better understand the implications of the technology.
It is not a surprise to see so many leading firms competing for AI dominance. This tech brings incredible competitive advantages.
However, regulatory actions will likely impose robust guidelines for safety reasons. Companies that get ahead of this development by guaranteeing responsible internal processes for AI use will regain advantage over competitors.
Engineering Talent Plus Ethical Leadership
Companies in the nearshore and elsewhere will continue to fight for the best engineering talent, but acquiring executives with a proven ability to lead teams and successful experiences in AI implementation will become a more common battle.
White collar and creative professionals are increasingly worried about being replaced by AI. ChatGPT proved that the work of an AI system can get very close to the real deal.
As companies plan how to reduce costs, eliminate redundancies and increase efficiency, using AI becomes a very obvious solution. However, companies should not implement AI automation across the board; at least not until there are more clear regulations.
Governments are unlikely to allow AI systems to indiscriminately replace a significant amount of workers, creating massive unemployment and social friction as a consequence.
Human capital has remained at the core of the BPO/KPO industry for a long time. A good rule of thumb for every company thinking about AI is: people should remain the priority.