From creating works of art to creating sustainable supply chains, artificial intelligence (AI) has become a crucial tool in countless economic sectors worldwide. As global companies increasingly use AI to gain a competitive advantage, governments are also working hard to drive innovation and growth with AI.
In recent years, Asian countries have increased their efforts to support the rapid growth of their digital economies. This includes measures to equip companies with the necessary tools and infrastructure to use new technologies such as AI, to support innovation and to increase global trust in them.
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Singapore has unveiled the world’s first AI governance testing framework and toolkit. It’s called AI Verify and is currently a Minimum Viable Product in the pilot phase.
Singapore has unveiled the world’s first AI governance testing framework and toolkit. It’s called AI Verify and is currently a Minimum Viable Product in the pilot phase.The “innovative controller”
“We believe there is no contradiction in being an innovative regulator,” said Lew Chuen Hong, Managing Director of Infocomm Media Development Authority (IMDA) in Singapore. “And the real role of the regulator is to lay the foundations for trust so that businesses, governments and consumers have the confidence to innovate and shape digital.”
As AI quickly becomes ubiquitous in everyday activities, calls for more robust governance to ensure AI systems are fair, transparent, and secure are increasing. For example, the European Union is negotiating a new AI law and the US Federal Trade Commission is working on new laws that will allow it to rule on issues of AI discrimination, fraud and related data breaches.
In Asia, countries like Korea, India, and Singapore are trying to forge their own paths in AI ethics and governance. Among them, Singapore is taking a balanced approach by working with various stakeholders to build a more trustworthy AI environment.
In 2020, Singapore released its Model AI Governance Framework to provide detailed guidance – with actionable measures and practices – to help organizations use AI responsibly. In addition to presenting use cases from various industries, IMDA has also worked with the World Economic Forum’s Center for the Fourth Industrial Revolution to publish a guide to help organizations align their AI governance practices with the framework.
Put AI governance to the test
In 2022, Singapore took another step forward to help companies validate the implementation of responsible AI. The island nation introduced the world’s first AI governance testing framework and toolkit, called AI Verify, which aims to provide a standardized method for verifying the performance of AI systems against internationally recognized ethical principles.
AI Verify is currently a pilot minimum viable product and testing framework that includes process reviews and technical testing. First, the technical tests focus on checking the fairness, robustness, and explainability of some supervised learning models. Organizations testing with AI Verify can use the generated reports to improve their AI models and show how their AI systems compare to claimed performance. Rather than setting ethical standards, AI Verify helps companies be more transparent about their AI implementation.
After feedback and preliminary testing with partners such as Singapore-based bank DBS, Google, Meta, Microsoft, Singapore Airlines and Standard Chartered Bank, AI Verify is available for international pilots. Policy makers, regulators, AI system developers and business owners can participate and provide feedback on the global viability of the framework.
Robust growth, high digital penetration
The role of AI governance becomes even more important as Asia’s digital economy continues to grow. While the US has been hit by a tech slowdown – with more than 91,000 layoffs in 2022 – Asia seems unfazed. According to an October 2022 report by Google, Temasek and Bain & Company, Southeast Asia’s leading digital economies are expected to be worth S$200 billion (US$149 billion) in 2022, a 20% increase from 2021 The region’s digital economy is expected to reach S$300 billion (US$224 billion) by 2025.
Asia’s ability to weather a digital downturn that has plagued others lies in “major shifts on both the demand side and the supply side,” says Simon Chesterman, senior director of AI governance at AI Singapore. On the demand side, a combination of high internet usage, high penetration of digital devices such as smartphones, and population-level convenience with technological innovation has meant that many Asian individuals and businesses have rapidly embraced the digital economy, Chesterman explains.
By February 2023, 93% of businesses in Singapore had adopted some form of digital technology, up 19 percentage points from 2018, according to IMDA. That explains an important difference with some Western economies, says Chesterman. “In rapidly developing economies, people are more willing to embrace change because they see the benefits,” he says. “The more comfortable you feel, the more resilient you may be to change.”
This willingness to embrace digital technologies has only increased with the global pandemic. Three-quarters (76%) of people in Southeast Asia viewed technology as a enabler rather than an obstacle during the peak of Covid-19, according to an August 2022 report by VMware – which beat the global average by four percentage points – and 77% say that digitization improves both their work and their lifestyle.
Strong demand in the region has been fueled by a steady supply of innovation from the region’s vast business network, backed by direct government support. Increased public funding in Hong Kong, for example, led to the creation of 3,755 start-ups in 2021, a 12% year-on-year increase, which is a record for the SAR. The Government of Singapore has allocated S$25 billion (US$18 billion) for research, innovation and business from 2021 to 2025, and the growth of the digital economy has been identified as one of the key pillars of this initiative.
Building a digital ecosystem
Meanwhile, Singapore’s IMDA, which bills itself as the “architect” of the island’s digital future, has launched a series of initiatives to establish the city-state as a global and regional technology hub. It has made strategic investments in both hard and soft infrastructure to accelerate digital economic growth in the country. Singapore has achieved nationwide standalone 5G coverage (over 95%) three years ahead of schedule, and IMDA has rolled out digital utilities like TradeTrust, streamlining the exchange of electronic documents.
IMDA also plays a pivotal role in creating a strong digital talent pipeline and a progressive regulatory framework to encourage innovation. The aim is to drive growth in the digital economy by strengthening the credibility and trustworthiness of digital products and services. In June 2022, for example, it opened a S$36.3 million Digital Trust Center as part of the country’s R&D effort focused on strengthening the legitimacy of digital systems.
A fine balance
Government intervention often takes a two-pronged approach, explains Chesterman: “Governments should regulate to avoid market failures, as it is inefficient to expect individual consumers to negotiate this themselves. The second reason governments regulate is that we have certain values and principles that we adhere to, even if it’s not designed for efficiency.”
However, there are challenges, Chesterman adds. In order to develop globally accepted standards, a delicate balance needs to be struck between a viable framework and over-regulation through mechanisms such as Digital Economy Agreements. Finding a way to develop a framework that can evolve at the same rate as the technology itself is also crucial.
Singapore rose to the challenge with AI Verify. Its pioneering work in AI governance, coupled with ongoing infrastructure investments to support the country’s digital economy, demonstrates the sector’s importance to the region’s growth prospects. It also shows the need for authorities in the region to work with international partners to ensure that such a digital economy is both open and interoperable. This is especially true for cities like Hong Kong and geographically small countries like Singapore.
“Small states like Singapore need open trade to survive,” says Lew. “A strong and resilient digital economy means businesses can thrive here globally, where size or geography is irrelevant. Investments in such technologies and innovations are crucial for long-term competitiveness and value creation.”
This content was created by Insights, the custom content arm of MIT Technology Review. It was not written by the editors of MIT Technology Review.
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