Accounting for the Future

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image09 Jul 2019

“What’s measured improves”, wrote management guru Peter F. Drucker.  This observation underscores the point that if China and other countries are to be successful in achieving improvements in air and water quality, living standards, probity and, then business and government reporting has to do a better job of measuring and reporting progress and value creation in relation to all aspects of these matters.

Peter Drucker also noted that while the modern corporation is the greatest vehicle ever invented to maximize profit and wealth, its Achilles heel is that it lacks moral authority.  In a world where pollution is having a dramatic negative effect on the daily lives of citizens and even threatening our survival, making profits alone is no longer enough.  Thus the call is for corporations and business to protect the environment rather than being a ‘free rider’ polluting our air and water and paying nothing.  Similarly, society and regulators are increasingly calling for corporations to be mindful of the reality that they are part of society and have a responsibility to more than shareholders, but also to employees and other stakeholders, including society in general. 
This goal will not be achieved, however, unless the full extent of the problem is measured, made transparent and acted upon.  A vital starting point is to have businesses in their strategies and reporting to account for progress made in achieving not only financial goals but also other important values such as protecting the environment and being socially responsible. This is the theme of Jane Gleason-White, Six Capitals: the Revolution Capitalism has to Have or Can Accountants Save the Planet?[i]

Gleason-White argues that we are now experiencing the beginning of a second revolution in accounting, the first being the invention of double entry accounting centuries ago.  While traditional accounting was highly efficient in helping us to measure capital in terms of finances and manufacturing, it has not sufficiently accounted for new forms of wealth that have come about with the shift form an Industrial to an Information Society.  In this environment, accounting methods and reporting must also account for two new capitals--human capital and software—nerds and intellectual property—ie the new forms of wealth. 

In addition, in the 21st Century and with our growing realization of the fragility of our environment and the inter-connectedness of society, Gleason White argues our business reporting and accounting systems must also find ways to measure and account for the impact of business on the environment and the value the business adds to society. 
It is argued we require a new form of business reporting or accounting that accounts for these six forms of capital rather than merely the traditional two related to manufacturing and financial capital. Businesses in this new environment need a reporting system that enables a business to report and shareholders and stakeholder able to understand the value that the enterprise adds to shareholders and stakeholders. 
Significant moves toward this new form of accounting is seen in the notion of ‘triple bottom line’, and calls for business reports to reflect values related to: profit, people and planet. Similar notions are captured in a ‘balanced scorecard’ approach.  In the US, there is the Sustainability Accounting Standards Board (www.sasb.org/ ) which is developing non-financial reporting standards for 89 industries.

As stated on their website:
 “Sustainability accounting standards are intended as a complement to financial accounting standards, such that financial fundamentals and sustainability fundamentals can be evaluated side by side to provide a complete view of a corporation’s performance.”

Perhaps of greatest impact is the formation of the International Integrated Reporting Committee (IIRC)  (now Integrated Reporting Council: http://www.iasplus.com/en/resources/sustainability/iirc). Since 2012 an international movement to transform corporate accounting, and the rise of natural capital accounting for nations and the global economy.  The IIRC brings together a cross-section of representatives from corporate, investment, accounting, securities, regulatory, academic and standard-setting sectors as well as civil society. It comprises a Steering Committee, a Working Group and three taskforces working on content development, engagement and communications, and governance.

On July 3, 2014 the International Federation of Accountants (IFAC) and the Chartered Institute of Public Finance and Accountancy (CIPFA) released an international framework on governance in the public sector and the IIRC released the International Integrated Reporting Framework in December 2013.
As articulated in the Framework: 
“The IIRC's vision is a world in which integrated thinking is embedded within mainstream business practice in the public and private sectors, facilitated by Integrated Reporting as the corporate reporting norm. The cycle of integrated thinking and reporting, resulting in efficient and productive capital allocation, will act as a force for financial stability and sustainability.”

The purpose of establishing IR Framework is stated as:
“…..is to explain to providers of financial capital how an organisation creates value over time. An integrated report benefits all stakeholders interested in an organisation’s ability to create value over time, including employees, customers, suppliers, business partners, local communities, legislators, regulators, and policy-makers.”
Conceptually, the IR Framework is based on the notion of value creation by a firm, taking into account the six capitals and developing a process by which such value creation can be achieved, demonstrated, understood and reported in terms that shareholders, stakeholders and the public can understand.

Conclusion
While the move to integrated reporting is in its early stages it offers our best hope yet of developing a way to measure value in a way that accounts for and integrates these values into one metric based system.  While few would argue with the need for integrated reporting, putting it into practice with reliable and understandable metrics has a long way to go.  Perhaps even greater is the challenge to achieve buy-in from governments, business and the general public.  Yet, there is a case for optimism as the public, business and regulators become increasingly aware of both the need for and importance of such a mechanism to the future of the global economy and our fragile planet.
 

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image 07 Dec 2023

It’s All In The Behaviour Because Education Trains The Mind

Career Professionals are better humans through practice in training the mind.


NAPS Students in their Bachelor of Business Accounting and B. Islamic Accounting are expected to put a bit of thought into their student behaviors both inside and outside the classroom. Taking a leaf from Krsihnamurthi’s – Education and Significance of Life – students are encouraged to recognize the function of education is to bring about the heightened capability for dealing with their professional life not just their chosen career paths. NAPS students are taught to be conscious of their professional and personal behaviors.

One of the many functions of education is to ‘create’ new values. The new value creation needs much work, and NAPS students currently have three years to pursue it. NAPS students have a great opportunity to choose what is suitable for them so that they can consciously exercise their student engagement strategy at NAPS. They commence their professional studies either as an extension of the past (as a school leaver) or as a preparation to train as a career-ready professional. NAPS's three-year program of study provides the student with ample opportunity to be comfortable with any of these options.

Please click here for more information on NAPS vision.

The strategies adopted, and the way academic success is achieved depends on the way the students spend the following years of education in the setting of an Australian Higher Education Provider. Student behaviors in their academic activities have a lasting influence on their personal and professional life.

Training the mind and the opportunity to exercise choice in the practice of business education starts with understanding one’s behavior in an organizational setting.

Here are some of the useful pointers about the behavioral practice I have compiled of student activities outside and inside the classroom we are encouraging students to adopt at NAPS. These have been compiled with the assistance of the NAPS Student Admin Team & the Learning and Academic Support Manager.

  • When entering the NAPS venue, say words of greeting such as: ‘Good morning, or Hello’.
  • When calling NAPS, please introduce yourself. Please prepare for the conversation by having your ID number and the topic of conversation. It may help you if you write it down.
  • When you come to the Front Desk wait for your turn. Please do not butt in and talk over top of the other. It is professional to not only wait for your turn but also make sure you acknowledge who was there before you.
  • Respect the space. It is not very professional to enter the side of the desk where the staff member is sitting or standing over the staff member who is attending to the needs of the others.
  • Seek permission to enter an office. Do not barge in unannounced.
  • Seek permission to use NAPS resources including pen and other objects. It is not your property.
  • Be polite to others. Avoid talking in a language that others are not familiar with.
  • Read and understand the email before wanting to inquire with the staff. Take charge of your actions. If you need help, make sure you realise you are at the receiving end of generosity and behave professionally and with ethics.
  • If you are late to class, do not disturb the rest. Professional ethics requires you to switch off the phone and not interrupt the flow of the session.
  • Avoid disruptive behavior, particularly in Campus Venues
  • Read and carefully consider the Student Codes of Conduct contained in the Student Handbook. This activity is a precursor of a code of conduct in the workplace.
  • Organise your finances responsibly to avoid undue stress and acting unprofessionally.
  • Learn to use the technology provided for your use.
  • Be a leader and manager by contributing to voluntary Organizations and Clubs including opting to become student representatives:
  • Learn time management and best practices for enhanced Time Management and Academic and non-academic success.
  • Seek help and assistance promptly for dealing with stress. mental health, Academic pressure, financial concerns, etc.
  • Take every opportunity in class to express opinions on different topics and ask questions to generate good discussion.
  • Work hard to maintain a healthy study-work-life balance but this requires good time management and a positive attitude.
  • Maintain the focus on the end goal – GRADUATE and ask what is next after graduation and lifestyle.
  • Prepare to attend all lectures and tutorials on time fully prepared for professional discussion and use of time effectively to maximize learning experiences.

Just remember cultivating professional attitudes is achieved by integrating daily rituals and practices with knowledge and training is achievable by gradually achieving changes in behaviors. One step at a time in all we think and do!


Prof. Sivaram (Ram) Vemuri
Dean
NAPS
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image 05 Dec 2023

Towards A More Inclusive and Sustainable Society

Emeritus Prof Eugene Clark, National Academy of Professional Studies

On Dec 2, 2023 was a keynote speaker hosted in Malaysia: INTERNATIONAL CONFERENCE ON MULTIDISCIPLINARY APPROACH FOR SUSTAINABLE SOCIETY (ICMASS).

My keynote address was entitled: Strengthening Legal Policies in the Inclusion of Persons with Disabilities through Research and Innovation to Address Economic Inequality

The primary goal of this conference was to bring together science, technology, and management areas of research. While the Information Age has empowered an ‘explosion of knowledge’ it has resulted in increasingly specialised disciplines that talk seldom talk with one another and indeed create their own new language and vocabulary that makes them even more isolated. My main message was that: If we are to manifest the wisdom to use this new knowledge and technology for the advancement of humanity, we must get better at talking with one another, respecting one another, sharing our insights and finding the best path forward to a sustainable future.

In my short time, I made the following brief points.

1. Leadership
If we are going to create a sustainable future we require leadership—at every level of society. In the 21st Century we need to think of leadership not as a pyramid, but as a web with all of our disciplines at the centre of it.

We should also be mindful that “The Leadership Challenge” is in the words of Alan Keith is “ultimately about creating a way for people to contribute to making something extraordinary happen.”

Know also that everyone can be a good leader and good follower in word and deed, inspiring each other to be what we know we can be.

2. Pragmatism/Practicality/Operational excellence
In the world of academia, we tend to over-emphasise theory and ignore the importance of practical applications that make a positive difference in the world. As management expert, Simon Sinek argues: “Pure pragmatism can't imagine a bold future. Pure idealism can't get anything done. It is the delicate blend of both that drives innovation.”

A leading example of someone who combined vision and application is Thomas Edison, who noted: “Vision without execution is but an hallucination.”

Operational excellence
We need common-sense, operational excellence. It is easy to tear things down. We need to focus on building things. We need operational excellence--pragmatic, practical, common-sense applications and commitment to making things work and getting things done. We do this by taking one step at a time. As the management mantra goes: “Think big; start small”.

3. Institution Building
Leaders build institutions and institutions build lasting change. In today’s world, it seems that every major institution in society is under attack and failing.
It is vital that professionals from all disciplines use their talents to help strengthen the institutions in society: government, schools, family, law/courts, religious and philanthropic institutions, community groups etc

4. Inclusivity
Paraphrasing former US VP, Hubert Humphrey: The moral test of a sustainable society is how that society and its institutions treat those who are at the dawn of life, the children; those who are at the twilight of life, the aged; those who are in the shadows of life, the sick, the homeless, the needy, the disabled, etc. While the world has many things on its agenda, it is imperative that we not forget the important needs of all of these groups.

Special Education Early Childhood Education. I had the opportunity a few years ago to serve at the CEO of a US company that was the largest private provider of special education services in the US. Not only did I meet some of the most amazing and dedicated people I have ever known, but I saw first-hand what a huge difference special education could make in the lives of individuals, their families and the whole community. I received numerous letters from parents thanking our organization for providing a therapist. Typical were the words of one parent who, wrote: “Thank you for giving me back my son.” Because of his speech problems he could not get along with his classmates or even family members. Your intervention changed not only his life, but our lives.” If a child is one of the estimated millions who suffers from autism and as a result cannot communicate effectively, that impacts not only the child’s life chances, but also creates a terrible strain on the family and the community network in which that child is a part.

The latest research indicates that the best investment in early childhood education and special education comes with early intervention, even before the child goes to school. The most effective intervention is that taken while the brain is in these early stages of development.

It is also important that we see people and disabilities, not as ‘problems’ or only as ‘broken’ but that we appreciate the tremendous contribution they can make to the world. This point is eloquently made in this little story by author Kevin Kling, who is himself disabled:

“Back in the days when pots and pans could talk...there lived a man. And in order to have water, every day he had to walk down the hill and fill two pots and walk them home. One day, it was discovered one of the pots had a crack, and as time went on, the crack widened. Finally, the pot turned to the man and said, "You know, every day you take me to the river, and by the time you get home, half of the water's leaked out. Please replace me with a better pot." And the man said, "You don't understand. As you spill, you water the wild flowers by the side of the path." And sure enough, on the side of the path where the cracked pot was carried, beautiful flowers grew, while other side was barren. "I think I'll keep you," said the man.”

We need to see people with disabilities, not for the cracks in their pots and what they don’t have—but for the many special talents they do have and the many blessings they bring to the lives of all of us.


5. Innovation/Entrepreneurship/Law as an example
Innovation and entrepreneurship are keys to the achievement of a prosperous, sustainable society. As Margaret J. Wheatley in Leadership and the New Science, reminds us:

"Innovation is fostered by information gathered from new connections; from insights gained by journeys into other disciplines or places; from active, collegial networks and fluid, open boundaries. Innovation arises from ongoing circles of exchange, where information is not just accumulated or stored, but created. Knowledge is generated anew from connections that weren't there before."

"We are living through an innovation famine, not an innovation feast—particularly in areas other than digital ... if we can do more innovation, we will not destroy the planet. It’s quite the reverse. It’s the safest way of saving the planet." — Matt Ridely speaking with Naval Ravikant

In common with other institutions, the legal system has struggled to keep up with technology and struggled to devise mechanisms whereby all citizens have access to services. In more recent times, however, suggest that new models are emerging that have the potential to re-engineer legal services so that justice and legal services are more accessible to all. Below is a summary of some of the barriers to access and how technology can help.

Knowledge barriers
In general terms technology advancements are leading to new models of learning that are tailored to the needs of individuals. Developments such as the Khan Academy have brought education to millions of people around the world. The higher the level of literacy in a society, the more informed and engaged its citizens will be.

Before the Internet, laws were found mostly in government, law firms and university law libraries. Law books were very expensive. Thanks to "open government" and other social justice and consumer movements, the laws of most countries are today freely available online. Just one of many examples, is the World Legal Information Institute. With almost 2000 databases on this site, one can find laws from over 130 jurisdictions around the world.

Today, websites can monitor activity, interact with users and tailor information and services to the needs of particular users. Aided by AI legal research will offer new solutions and even help resolve disputes.

Software can also help people navigate across many different government programs to help determine whether they are eligible for low-income legal assistance.

Language and cultural barriers
In our diverse and multi-cultural world, it is also important that the laws be made available in multiple languages. For those who do not speak other languages, software translators are rapidly improving. Moreover, many jurisdictions will make the key legal information available in multiple languages that reflect the diversity within their local community.

Software requires rules and standards to be effective across legal systems. This is the focus of projects like the EU Grotius Project 98/GR/131. Its aim is to promote consistent best practice standards in relation to legal interpreting.

Technology also has the potential to help better tailor legal education models to meet the needs of a more diverse student population and thus play a part in serving the educational needs of those underserved by traditional models.

Technical barriers
The law is also a language of its own and even native speakers can be intimidated by and alienated from a legal system that uses highly formal and technical language that is only understood by those with professional legal training. Software packages make it easy to provide links that put technical terms in plain language and diagrams that make it easier to see how things fit together.

Financial barriers
New models of legal practice, aided by technology, have promise to reduce financial barriers. Leveraging technology (e.g. electronic document assembly) one lawyer can today do the work of many. Virtual law firms mean that lawyers do not have to incur the costs of an expensive office and all the trappings that go with it.

Physical/geographic barriers
Modern courtroom designs are taking into account the "community of users" who are involved. For example, in Charlotte, North Carolina, jurors are provided with comfortable waiting rooms and various services (food, childcare, business services) that make it more convenient for them to wait as well as enabling them to carry out their daily activities while also doing their civic duty of jury service. Mobile courts are also becoming more common

Legal education barriers
Note the roles that virtue reality, artificial intelligence, natural language processing, gamification and other developments will play in educating the next generation of lawyers about the role of technology in enhancing access to justice

Time barriers
Technology enables a 24/7 world of work and access. In an Internet environment matters can be resolved asynchronously and after hours and not be limited to court times and normal business hours.

Innovation barriers
Lawyers and judges tend to be highly risk averse. However, in a time of rapid change and transformation, there is a need for the profession to embrace change and become more innovative or face serious disruption. Legal education, admission policies, law firm models, courts, legislatures, governments -- all aspects of the system must adapt and reboot in order to meet the needs/demands of an Information Age and an increasingly inter-connected, diverse and complex world.

Competition barriers
The legal profession in every country is highly regulated. In many cases professional bodies, such as bar associations and law societies, play a major role in this regulation. While such regulation offers protection to consumers of legal services, it can also result in anti-competitive effects that have inhibited innovation and made the profession resistant to change.

6 Technology tempered by wisdom
Isaac Asimov, Russian-born American author and biochemist wrote: “The saddest aspect of life right now is that science gathers knowledge faster than society gathers wisdom." Similarly, Swiss author, Anne Louise Germaine de Staël, concluded: “Scientific progress makes moral progress a necessity; for if man's power is increased, the checks that restrain him from abusing it must be strengthened."

As we see in recent debates about harnessing the power of artificial intelligence (AI), if we continue to develop our technology without wisdom or prudence, our servant may prove to be our master and maybe even our executioner.

7. Optimism
When watching today’s news with its over-emphasis on all things negative, it is easy to be pessimistic. Indeed, a pandemic of pessimism and cynicism destroys families, undermines institutions and speads gloom and despair to individuals, communities and even whole nations.

Optimism and hope are necessary to inspire and generate the enthusiasm required to make the effort to make things better. As President Franklin D Roosevelt exhorted during the Great Depression: “Men are not prisoners of fate, but only prisoners of their own minds.”


8. Urgency
Finally, it is crucial that we have a sense of urgency. As the poet, Rumi stated so eloquently:

Travelers, it is late.
Life's sun is going to set.
During these brief days that you have strength,
be quick and spare no effort of your wings.

Rumi


That urgency should be accompanied by a spirit that does not shrink from problems but welcomes them as opportunities to grow and bring about a better society. In this task our motto should be “Ad astra per aspera” ---“To the stars through difficulties.” John James Ingalls




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image 17 Nov 2023

Success is a Journey…It begins here!

Deans Blog

It is my privilege to write this blog. I wish to address three aspects – success and the steps each of us needs to take to achieve it, the actions of a successful student, and some suggestions for you to make it in this exciting pursuit of knowledge.

Success is a very value-loaded term. It is very personal but is shaped by many forces of influence since our childhood. For me, success is the opportunity to have the ability for continuous improvement of myself and the people around me. To have ability depends on context, connection, continuity, change, competition, and cooperation. For Alex, it depends on values and being in tune with herself.

Success is not external it is in you. Significantly, your heart does not lie about success. Please ask yourself what success is for you. You decide for yourself what it is and then decide the steps you need to pursue it.

As Pele, the famous footballer said, success “is no accident. It is hard work, perseverance, learning, studying, sacrifice, and most of all love of what you are doing or learning to do”.  Once you decide what success is for yourself, the next logical step is to position yourself to be successful.  It would help if you organized yourself for success. These are some tips for you to follow:

  • Organize your time for success as an international student. You only have 24 hours on any day. You cannot say you are time-poor. Everyone has the same amount of time. You don’t have any more time to allocate! It is about being time-focused. The attention is on how to use time more effectively! You need to plan how you are going to spend your time to achieve success. I found that the best way is to prepare a personal schedule.

  • Contextualize your schedule to your conditions. Education is an investment. You invest today to reap the benefits in the future. To create a personal schedule based on your values to achieve your defined success, organize around the lectures and tutorial times and your study time. Then fill in the rest of the activities to achieve your defined success. (Hint: Do not forget to fill in the travel times between your activities).

  • Strategize your daily activity. Once you have organized your timetable to achieve your “success”, work out the steps you will follow. For example, when do you have to get up to reach the lecture on time? Have you allowed yourself sufficient time in case there is a delay in the public transport system network? Be realistic when you work out the steps based on your circumstances. Work out a schedule to reach the class at least 10 minutes early. The more realistic you are when setting up these actions the higher the probability of reaching your goals.

  • Implement the Plus 1 rule. Plus 1 rule is to plan not only what you wish to achieve but also what you are going to do when you have achieved what you set out to do. For example, you set the goal to attend the lecture. Plan not only how you are going to position your activity to attend the lecture on time but also what you are going to do in the classroom after reaching on time. Ask yourself what you need to take with you to be able to follow the material discussed in the classroom. You need to take something to write on and write with as well as a calculator. These are the basics you will need to help you to be successful in maximizing your chances for successful use of time in the classroom.

  • Prepare for effective engagement in the learning process. The unit outline provides you with all the necessary information. Make sure you are familiar with the unit objectives, unit organization, and unit assessments – what, when, and how much they are worth. Based on your understanding of the unit expectations, ask yourself how to be an effective student to maximize learning. Identify the steps you need to take to be successful in your learning. My advice is to prepare for the lecture (one effective way is to take your notes) and answer the tutorial questions as a guide to test your understanding of what you have learned (by comparing the answers you prepared before attending the tutorial with the answers provided by the instructor to the tutorial questions in the tutorial) and plan and implement timely completion of the assessment tasks.

  • Achieve study-life balance. It is important to recognize today will not come back in our lives. At the same time, today is connected to yesterday and influences tomorrow. It is therefore important for you to realize what you do today is based on the learnings until yesterday and becomes a building block for tomorrow. So, choose today's activities wisely because you are contributing to the blueprint of your life. So don’t forget to have fun balancing study and life

I wish you the very best in your pursuit of success. Thank you for the opportunity to be a part of your successful journey. Until, next time…


Prof. Sivaram (Ram) Vemuri
Dean

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image 11 Oct 2023

Artificial Intelligence (AI): The Bad

AI, like most major technological advancements, can be used for good or for ill.  In the worst cases, there will be bad people and organisations who use the new technology to perpetrate physical, psychological, financial and other harms.  In other cases, people will be negligent in their use of AI and not take reasonable steps to foresee the harms it could cause. In still other cases, in the rush to get their application to market, unintended negative or harmful consequences may occur.  Below are just a few examples.

Fraud, theft, scams, political disruption and more

AI makes it possible to create deep-fakes, ie fake representations of real people or events.   Anyone who spends anytime on the Internet will know that there is a plethora of images, audio and video freely accessible.  While some uses of deep-fakes are done for innocent fun, others can amount to spreading false information in the middle of a tight political race. In business deep-fakes can mislead people into believing that a product or service has the endorsement of a particular person or company.  Deep-fakes can be used to commit fraud or make other deceitful representations made for illegal and dishonest purposes.  It is also possible that deep-fakes become so common that people doubt the legitimacy of all such people or products.

Fake content can cause havoc and panic in the middle of a pandemic, cause chaos in share markets, obstruct justice or falsify information. Criminals are taking advantage of the technology to conduct misinformation campaigns, commit fraud , obstruct justice, sow dissent and division,  and even bring down an organisation or even a government.

Another important issue is the potential of AI to breach security, facilitate identity theft, fraud, promote scams,  and other crimes. Once an AI developer has such information it is a small step to create multiple versions of that person.  These deep-fakes can be used to get access to health data, bank accounts and other important documents and information.

Designers of AI systems need to be aware of the harms that may be facilitated by this new technology. Ethical behaviour within organisations, effective systems of quality control, security and authenticity,  and a culture of ethical behaviour are all vital.  Externally, governments and industry bodies must also develop laws, regulations and standards that promote the ethical use of AI.

Lessening of Individual Autonomy and human interaction

Some experts fear that with increasing automation, we humans will become bored and lazy.   We are not too far away from the reality that the world will be dominated and run more by artificial intelligence.   What will this mean for the human race. Will we become passive, bored, lazy and out of touch?  Will this disempowerment create and invite a takeover by artificial intelligence systems?  Or, will a few elites, using these new and powerful systems, be in total charge with the result that individual freedom will be severely limited

An example of how AI can empower those whose agenda are to gain control over people and limit freedom is found in Carol Roth’s  NY Times Best Seller, You Will Own Nothing: Your War with a New Financial World Order and How to Fight Back. The author and entrepreneur paints a picture of what would happen if a new financial world order controlled by global elites are able to gain the type of control made possible, for example, by eliminating all hard currency and enforcing a system of digital currency under the control of a group of government, international organisations, business and technology elites.  She argues that a system of ‘social credits’ would accompany such a system enabling the elites to shut down dissent and control the general population. It will result in debt, deprivation and desperation. It will mean people own fewer assets and that we have less control over their lives thereby lessening the ability to protect one’s wealth now or for future generations.

These questions raise important philosophical, psychological, moral, governance, legal and ethical questions that must be addressed if society is to fully benefit from AI while at the same time managing the significant risks involved.

Mass Unemployment

As mentioned above, the workforce in an AI dominated world may be a dystopia for those who lose their jobs. A lot of industry disruption and job destruction will have to be carefully managed. Governments will have to carefully plan the transition for those industries that are severely disrupted.

Major service functions such as customer service centres are likely to be heavily hit as AI applications coupled with robotics rapidly replace many of these types of roles.  For example, most readers  have have experienced  a chat with a company’s automated answering service.  AI  ChatBots will become increasingly popular and will replace many of the humans now filling those roles. Customer service A 2022 study from the tech research company Gartner predicted that chatbots will be the main customer service channel for roughly 25% of companies by 2027.

Another example is the fast-food industry.  In common with thousands of other young people, my daughters gained their first work experience at a McDonald’s restaurant.  Today, customers order via an on-screen kiosk In China AI robotic chefs can cook your food. Other robots can wait on tables and take your order.

At the other end of the spectrum, there are likely to be significant shortages of those people who have the skills to take up the new positions required to support the growth in the AI related fields.  There will be a significant battle for talent.   And, as in all battles, there will be wounded and casualties and wounded, winners and losers, the dominant and the dominated.

Education

AI presents many challenges for education. Students, faculty and administration will see their systems severely challenged by new AI applications.  For academics, it will significantly change aspects of research and scholarship.  Many of these developments will bring improvements.  The ‘bad’, however, is that it riding this major wave of innovation will require vision, talent, resources, training, resilience and more.  Many will fail.  The system will be disrupted.  The impact of how this all plays out remains unknown, uncertain, and unpredictable.  A case in point is the decades long development of computer assisted learning packages.  They have been very slow to catch on due to many factors: teacher unions fear job losses; the current model is built on the assumptions based on age level rather than development/skill level; educators do not have adequate technology skills; the financial models have not been right and authors are not sufficiently rewarded; people are generally highly resistant to change.

The other challenge for education is to define how it can best serve society by providing the learning, research and training required to meet the multiple needs and demands if society is to gain the benefits of AI and manage the potential disadvantages and harms that may be caused.

Law

At the macro level, laws and regulations will be required to provide the governance framework to guide society in the Age of the Machine.  This will be especially challenging given the geographic limits on the application of law and fact that different countries will have different approaches.  Underlying the formal legal regime will also be the reality that countries will have different ethical standards.  Some countries will see it in their interest to press ahead, despite the risks, in order to gain a competitive advantage over other countries.  

At the ground level it will also be important for designers and users of AI systems to be aware of new problems that might emerge.   AI systems can and do discriminate.  AI tools have the potential to embed unlawful biases and discrimination and do so on a system-wide scale and in a non-transparent way.  This can impact decisions on who gets a loan, who gets hired, who gets favourable administrative decisions, who gets monitored by the police, etc. AI systems also use information, pictures and other intellectual property, all of which is loaded up into the application.  This raises serious issues regarding the potential intellectual property violations that might occur.[2] AI also creates IP thus raising further questions about whether the existing intellectual property legal regime will include IP creation by non-humans.

Ethical and Personal Issues

As mentioned above, the growing development and application of AI to all sectors of human activity raises many ethical issues.  It threatens the degree of human autonomy, challenges existing rules, laws and standards in society, threatens a loss of control, challenges expectations of privacy, and so on. A major question is the extent to which we can achieve agreement among nations or even between public and private sectors and other groupings within nations regarding central ethical issues raised by AI.  For example, what should be the degree of transparency underlying the use of AI systems and applications?  How can principles of justice and fairness be promoted and protected by AI development?  How can we regulate and promote fairness, non-maleficence, responsibility and privacy in the development and use of AI?

There is also a psychological dimension to AI adoption that must be considered. While AI and its applications have grown rapidly, one should not underestimate the limitations and challenges stemming from the natural tendency of humans to cope with, resist and even fear change.  For example, a major roadblock to the  implementation of AI applications to augmented medicine is the reality that doctors and other health care providers have resisted such changes and not been prepared for it.  Many patients, however, have welcomed its advantages in providing for a greater autonomy and a more personalized treatment.

More than this, as the impact of AI grows it begins to challenge the relationship between humans and machines.  In doing so, it challenges traditional notions of identity, sexuality, gender, relationships and rules as new forms of discourse emerge to explain and govern relationships between machine and human intelligence.

 

 

 

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Artificial Intelligence (AI) : The Ugly and the Unthinkable

As to the unthinkable, many commentators, scientists, politicians and others argue that unchecked development of AI systems and applications could even pose a real existential threat to humanity.
 
One has to take seriously the fears about AI raised by people such as Stephen Hawking  and Google’s “godfather of AI” Geoffrey Hinton who shortly after resigning his position, stated: there was a "serious danger that we'll get things smarter than us fairly soon and that these things might get bad motives and take control." 

Just as there are always some people with evil intentions, a psychopathic machine, with power to code, and able to learn faster and better than humans, working around the clock—the potential for significant evil is great.   More benign perhaps, but just as devastating, is the gradual loss of freedom that comes as technology in all of its forms, including AI, captures our attention while giving us the illusion of choice and freedom. Life is about making choices about what we do with our time, with whom we communicate, what we listen to, what we purchase, etc. Today, government is increasingly influenced less from voters and more by lobby groups, big tech, big business, big media and big bureaucracy. In this environment, genuine freedom, representative government and human rights are increasingly at risk.
 
Conclusion:
Winners and Losers

When it hits its peak, AI is likely to be more impactful than the Internet, more momentous than even the Industrial Revolution.  The challenge is how we humans can match our ability to create/unleash AI while at the same time having the wisdom to use this powerful tool wisely for the benefit of humanity.

In this new AI environment there will be winners and losers. Erik Brynjolfsson and Andrew McAfee, 2018 noted that:

 “For more than 250 years the fundamental drivers of economic growth have been technological innovations. The most important of these are what economists call general-purpose technologies — a category that includes the steam engine, electricity, and the internal combustion engine. The most important general-purpose technology of our era is artificial intelligence, particularly machine learning."

And, as posited by Paul Allen, Co-Founder of Microsoft:

"The promise of artificial intelligence and computer science generally vastly outweighs the impact it could have on some jobs in the same way that, while the invention of the airplane negatively affected the railroad industry, it opened a much wider door to human progress."

As Stephen Hawking argued:

"Success in creating AI would be the biggest event in human history. Unfortunately, it might also be the last, unless we learn how to avoid the risks." -Stephen Hawking, Theoretical Physicist

These quotes point to the reality that there is an urgent need to align the human intelligence in creating AI with the wisdom and governance that ensure that we do so in a responsible and ethical way.  This is the only way we can ensure that AI is carried out in the service of humanity and reflects the best in us and promotes human advancement in the decades ahead. 
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