- New Research by MIT Sloan Management Review and Boston Consulting Group Examines the Risks Stemming from Internally and Externally Developed AI Tools in the Middle East
- 38% of Middle East Organizations Believe They Are Prepared for AI Regulations
- Survey Reveals That 25% Of Organizations in the Middle East are RAI Leaders, while 75% are Lagging.
Dubai, UAE— The Artificial Intelligence (AI) landscape has changed dramatically over the past year with the swift adoption of Generative AI (GenAI), making it more difficult for organizations to be responsible with the technology and putting pressure on Responsible AI (RAI) programs to keep up with continuous advances, according to new research by MIT Sloan Management Review (MIT SMR) and Boston Consulting Group (BCG).
The report, titled “Building Robust RAI Programs as Third-Party AI Tools Proliferate,” is based on a global survey of 1,240 respondents, representing organizations reporting at least $100 million in annual revenues, across 59 industries and 87 countries. According to the survey, 16% of Middle Eastern organizations implement RAI policies, processes, and/or approaches implemented across the company.
“The AI landscape in the Middle East, both from a technological and regulatory perspective has changed dramatically,” said Elias Baltassis, Partner & Director, BCG X. “The rapid adoption of generative AI tools has brought AI to the forefront of conversations in the region. Yet, the fundamentals of responsible AI remain crucial. This year, our research emphasizes the pressing need for Middle Eastern organizations to invest in and scale their RAI programs to address the growing uses and risks of AI in a region that is increasingly embracing digital transformation.”
In the Middle East, the components of Responsible AI (RAI) programs encompass broad principles (43%), policies (49%), governance (76%), monitoring (49%), tools and implementation (51%), and change management (43%). Individual considerations within these RAI programs include transparency and explainability (62%), social and environmental impact (59%), accountability (57%), fairness (54%), safety, security, and human wellbeing (68%), and data security and privacy (86%).
Both Leaders and Laggards Need to Step Up:
The Middle East regional survey reveals that 25% of organizations are RAI Leaders, while 75% are Laggards – highlighting the urgent need for most organizations in the region to double down on their RAI efforts. The data suggests that organizations in the region can experience a range of benefits from RAI, including better products/services (43%), brand differentiation (27%), increased customer retention (43%), improved long-term profitability (30%), accelerated innovation (41%), and improved recruiting and retention (16%).
Widespread Reliance on Third-Party AI:
The vast majority (78%) of organizations surveyed globally are highly reliant on third-party AI tools, exposing them to a host of risks, including reputational damage, the loss of customer trust, financial loss, regulatory penalties, compliance challenges, and litigation. Still, one-fifth of organizations that use third-party AI tools fail to evaluate their risks at all.
A Rapidly Evolving Regulatory Landscape:
Only 38% of organizations feel adequately prepared for AI regulations, highlighting the need for more awareness and preparedness. The regulatory landscape is evolving almost as rapidly as AI itself, with many new AI-specific regulations taking effect on a rolling basis.
Most organizations (84%) consider AI as one of their top priorities. Organizations subject to regulations account for 13% more RAI Leaders than organizations not subject to them. They also report detecting fewer AI failures than their counterparts that are not subject to the same regulatory pressures (32% versus 38%).
Five Recommendations for a Dramatically Changing AI Landscape:
The report outlines five recommendations for organizations as they navigate the rapid adoption of AI and the inherent risks associated with it:
- Move quickly to mature RAI programs
- Properly evaluate third-party tools
- Take action to prepare for emerging regulations
- Engage CEOs in RAI efforts to maximize success
- Double down and invest in RAI
CEO Engagement Is Key in Affirming an Organization’s Commitment to RAI:
CEOs play a key role in both affirming an organization’s commitment to AI and sustaining the necessary investments in it. Organizations with a CEO who takes a hands-on role in RAI efforts (such as by engaging in RAI-related hiring decisions or product-level discussions or setting performance targets tied to RAI) report 58% more business benefits than do organizations with a less hands-on CEO, regardless of their leader status.
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About BCG X:
BCG X is the AI, technology and design unit of BCG. Turbocharging BCG’s deep industry and functional expertise, BCG X brings together advanced tech knowledge and ambitious entrepreneurship to help organizations enable innovation at scale.
With nearly 3,000 technologists, data scientists, software and data engineers, and human-centered designers located across 80+ offices, BCG X build and designs platforms and software to address the world’s most important challenges and opportunities.
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