“ESG” Impacting “AI”

The big technology companies are in the race of controlling the Artificial Intelligence (AI) business. They need the best human resources to conduct research, data analysis, and execute the AI program. — Alok Singh

Environment, Social and Governance (ESG) is the new buzz word which is being widely discussed by the policymakers, corporates, academia and other stakeholders. The Corporate social responsibility (CSR), Social Impact Assessment (SIA), and Environmental Impact Assessment (EIA) already exists but ESG has its own relevance and has different offerings from the three peers. The CSR, SIA, and EIA have a framework and so ESG also has a framework.  The onus of CSR, SIA, and EIA lies with the company while ESG has more stakeholders. The companies satisfy the checklist to pass the statutory requirements of CSR, SIA, and EIA. The ESG is beyond these and is an attempt to be more robust, more serious, more visionary, more long-term partner, and is a hope to the mankind to cope up with the failures of CSR, SIA, and EIA or a reply to realization that standalone CSR, standalone SIA, and standalone EIA is not sufficient to save the future of the planet. 

The relationship between ease of doing business and the role of regulators needs to be redefined. Higher rankings in ease of doing business should not lead to dilution of control of regulators on the businesses. The tradeoff between ease of doing business and control of regulators should not be seen as a zero-sum game. The experience of license permit raj has been a bad experience for ease of doing business. The relationship has to be complimentary and the outcome has to be win-win for regulators as well as for ease of doing business. Decentralization, making society, environment and governance as an active partner in any business model can be the route ahead. 

The big technology companies are in the race of controlling the Artificial Intelligence (AI) business. They need the best human resources to conduct research, data analysis, and execute the AI program. But recently huge layoffs have happened in the big technology companies headquartered in Silicon Valley. These are contradictory things to understand. One hand the big technology companies are trying to control the future by engaging variants of  AI like automation, Virtual Reality, and Augmented Reality in the domain of mobility, entertainment, education, purchasing, advertising, electioneering, and even news but at the same time the delayed hiring as well as big layoffs by big technology companies are signaling that these companies are reaching the apex of their capability and AI is a transition phase which is creating an opportunity for every capable  nation to join the race of next disruptive technology and hence define the regulations for  the technology of the future. The objective of the investors and the promoters of such big technology companies is not restricted to earn huge profit only but rather the big technology companies wish to control the way the humans behave; they aspire to control the world without participating in any democratic system. If the big technology companies are working on disruptive AI for the future, then obviously, they are looking for fresh talent and till they get the desired talent the speed of AI itself is disrupted.

We are at an interesting crossroads where AI is in a hurry to arrive and big technology companies are desperate to execute their project fast and at the same time ESG is knocking the doors of all the stakeholders including the big technology companies. 

The regulating agencies are struggling to regulate the business of e-commerce, crypto currency, social media abuses, fake news, tax theft, vaccination programs, food safety, trade policy, pharmacy, money laundering and varieties of financial and non-financial corruption. Corruption is a mindset and no law is foolproof to eradicate it completely. At the same time, we have success stories of Real Estate Regulatory Authority (RERA) in housing sector, success story of Arogya Setu App in Covid19 vaccination program, success story of BHIM UPI in digital transaction, success story of time bound in house development of Covid19 vaccine Covaxin and many more. The world admits that we have arrived whether it be Gati-Shakti or self-reliance in sophisticated defense products or aspirations to have our own semiconductor fabrication plant or design our own semi-bullet trains like Vande Bharat or capability to produce our own civil aircrafts, or our footprints in space technology program. 

But at the same time there are sectors where the people’s participation is more effective than the government’s role.  In trade policies the government is unable to formulate a comprehensive policy to stop consumption of simple Chinese products which has disrupted our domestic small manufacturers but the campaign during festival seasons to consume our products has been a huge success. 

Decentralization, localization, cooperatives, and self-employment are the keywords for our demographic dividends to be fruitful. There is nothing great or compulsion for us to consume products of Pepsi and Coca-Cola but the lack of awareness, ease of availability and use, and unwillingness of the people to use local products because of deep pocket advertising campaigns by the foreigners are the reason for success of such foreign companies. 

The framework of ESG matches with the philosophy of peoples control over our nature, society, environment, culture, education, health, lifestyle and definition of stakeholders. Decentralization and cooperatives are tools which existed for centuries in our social system and it’s time to realize that ESG has to be regulated by the people themselves. The government-enabled regulations are always outdated. We have examples of OTT versus TV Channels where the regulation is outdated and OTT technology has advantage because of absence of regulation and by the time OTT could be regulated the other disruptive technology will be in pipeline. 

Again, we have a success story of controlling the cryptocurrency where the campaign and the union government’s policy has discouraged the growth of cryptocurrency. We have a success story of the GST system which has created a level playing field for small manufacturers with those of integrated big manufacturers, and GST has also acted as a web of checks to those who are habitual tax thieves. 

There are ways for any kind of AI to be regulated, the attacks have to be countered jointly by the government policy and people’s participation. Standalone none of them are equipped well to counter them. The bank loans, the advertising companies, the whole supply chain, the consumers, and everyone needs to make sure that ESG is being practiced by the big technology companies. qq

(Alok Singh is a Fellow of the Indian Institute of Management Indore, a freelancer academician, and associated with AGET Business School, Jhajjar.)

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