A new Deloitte report discusses the importance of ethics, the types of misuse of new technologies and the approaches companies can take to operationalize standards.
The entrepreneurial disruption phase of “act fast and break things” is being replaced by a mantra of “act fast and keep up” when it comes to applying ethical frameworks and leading practices to emerging technologies, according to a new study from Deloitte.
TO SEE: Artificial intelligence ethics policy (Tech Republic Premium)
The company’s very first State of Ethics and Trust in Technology annual report defines emerging technologies, identifies reliable and ethical standards, explains different approaches to operationalizing standards, and encourages actions that can be taken at short notice.
A laser focus on emerging technologies
According to Deloitte, many companies want to be at the forefront of emerging technologies to stay competitive and gain benefits such as improved customer experience, operational efficiencies and new use cases.
“But these technologies are often being developed at such a rapid pace that few companies stop to consider the ethical implications,” the report said. “With great power comes great responsibility. And with unprecedented possibilities, the promise of emerging technologies comes with its potential for abuse.”
The report defines emerging technologies as digitally-enabled tools that represent new and important developments within a particular area. They are grouped into several categories, including cognitive technologies, quantum computing, robotics, digital reality, and distributed ledger technology.
Survey respondents said the emerging technologies with the most potential for social good are cognitive technologies (33%), digital reality (14%) and autonomous vehicles (11%). Conversely, according to the report, respondents also identified cognitive technologies (41%), digital reality (16%) and distributed ledger technology (13%) as the technologies with the most potential for serious ethical risks.
One of the more enlightening findings was that 87% of respondents said they have no specific ethical principles for emerging technology other than cognitive technologies, or are unsure whether or not they have them.
For companies that have broad, overarching trustworthiness and ethical principles for emerging technology, only 47% of respondents update those principles at least annually, according to the report.
Potential benefits and abuses
The report outlines the current and potential benefits and abuses of emerging technologies. The benefits include:
- Current: Democratizing financial investing can give ordinary people access to global financial markets.
- Current: Drones can deliver just-in-time emergency care.
- Current: AI can help reduce repetitive tasks for employees, freeing them up for more creative pursuits.
- Potential: Quantum computing can help stop human trafficking.
- Potential: Unmanned aerial vehicles can innovate transport.
The abuses of emerging technology to keep in mind include:
- Current: Personal data from portable devices may be sold for advertising/marketing purposes.
- Current: AI models can handle bias inappropriately.
- Potential: Bad actors in the metaverse can regenerate as new identities and continue unethical behavior.
- Potential: Quantum cryptography cannot keep up with quantum computing, creating uncertainty in blockchain and crypto value.
Why it is important to establish ethical principles for emerging technology
Consequently, while emerging technologies promise a plethora of benefits, “companies offering emerging technology products and services must put ethical considerations first if they are to secure short- and long-term value,” the report said. “Companies that ignore or downplay the ethical issues associated with emerging technology are at risk of multiple harms.”
These forms of damage include:
Reputational damage
For example, the report notes that the US Treasury Department imposed investment restrictions on a Chinese drone manufacturer because of its role in facilitating human rights abuses against Chinese Uyghur Muslims, as well as other ethnic and religious minorities.
Legal damage
Citing the number of high-profile lawsuits against technology companies in recent years, emerging technology failures can leave companies vulnerable to litigation.
For example, “a cryptocurrency lending company used unethical, Ponzi-esque practices to support growth and profitability,” the report said. “Following the 2022 crypto market crash and a run on account holder money, the company has filed for bankruptcy and is facing class action securities lawsuits. Given these results, consumers are often hesitant to engage with similar technologies.”
Employee turnover
Employees place a high value on transparency and ethical behavior: one in three employees have left their job due to ethical concerns, according to the report.
“Given that the cost of attrition can amount to as much as 25% to 200% of an employee’s compensation, it is unnecessarily costly to have employees resign over ethical issues,” the report said.
The financial toll of ethical missteps can be enormous
This type of harm typically leads to a reduction in a company’s profitability — with the cost of mitigation and fines of technology companies’ ethical misconduct estimated at $70 billion in recent years, the report said.
“Conversely, when companies apply clear, trustworthy and ethical principles to their technology use, the resulting transparency can increase consumer confidence in the company and in the product,” the report said. “To avoid adverse and costly consequences of neglecting ethical standards, companies must be more proactive than ever when it comes to developing and implementing ethical principles for emerging technologies.”
One way to potentially reduce the risk of ethical missteps is by implementing corporate policies. Download these TechRepublic Premium resources today: Ethics Policy: Supplier Relations and Artificial intelligence ethics policy.
