Small country Czechs ponder AI opportunities and challenges

Artificial intelligence is sometimes referred to as the new oil and is seen as one of the main drivers of economic growth in the decades going forward. For the Czech Republic, the most industrialised of all European Union countries, there are clearly a lot of challenges as one of the main elements of the so-called AI revolution will be the increased use of robots and machines effectively learning on the job and from each other.

Illustrative photo: geralt / Pixabay, CC0Illustrative photo: geralt / Pixabay, CC0 Artificial intelligence and its threats and challenges were the subject of a Prague conference featuring the Czech European Commissioner Věra Jourová, top Czech government officials, European experts, lawyers, and academics.

They appear at the moment to be grappling with a still wide and not totalling defined concept which among many other things embraces the processing of big data and machines learning from their experience and each other, as well as a big helping of automatization and use of robots.

Many of the early predictions about AI tended to be on the alarmist side, stressing the hundreds of thousands of jobs that could be lost. And that was the case for the Czech Republic as well. More recent forecasts tend to be more upbeat, though the optimism is based on many workers adjusting to a new work environment, getting new training, and changes in the education system.

One such study out in the last two months from the consultancy Deloitte estimates that around 51 percent of jobs in the Czech Republic are likely to be lost or radically transformed by automatization. Twenty one percent are seen facing a medium risk and 28 percent low risk as a result of the trend.

Consultancy Deloitte estimates that around 51 percent of jobs in the Czech Republic are likely to be lost or radically transformed by automatization.

Farming is one area where automatization is seen making major strides, with combine harvesters for example operating without humans. The shelves of stores could be filled by robots and goods transported to shops and factories by automatic driverless trucks. Waiters in restaurants could be increasingly replaced by automated machines and, more close and personal, even journalists could be replaced by data crunching and word skilled machines. But while some jobs disappear, many other opportunities will open up.

And the big plus for the overall economy is seen as a much faster advance in productivity and overall economic growth. The Deloitte study predicts what could be seen as the new industrial revolution paying off with a high level of economic growth over the next 16 years averaging out at around 3.9 percent a year. That’s around the top level of Czech economic growth over the past two decades. As a result, the whole Czech economy could by 2033 grow by 78 percent by 2033, or by around twice the rate that would have otherwise been the case without the widespread use of robots and the other AI applications.

Věra Jourová, photo: Šárka ŠevčíkováVěra Jourová, photo: Šárka Ševčíková In the optimistic scenario, Marek Skořepa, one of the participants in the Prague conference and an economist with Česká Spořitelna, said a key issue in the future would be whether the companies that see their profits grow in the Czech Republic will reinvest their income locally or send it back to their often foreign- based parent companies. If the latter is the case, should the government step in with special taxes? That’s a particularly poignant question in the Czech Republic given the number of foreign owned companies across the economy.

Two of the building blocks of AI are the massive volumes of data now being generated by computers and programmes everywhere and the correspondingly boosted capacity to make sense of that data through new algorithms.

That volume of data and the accompanying processing capacity is described as the new oil. But Europe as a whole appears to be in a poor position to mine that new source of wealth compared with the United States and China. They are reckoned to be streets ahead of the EU in terms of their data ownership and crunching potential.

According to the European Union’s own figures, just around four percent of global data is stored in the EU. And the EU was widely believed to have shot itself in the foot when it came up with tough new data protection rules – commonly known by the acronym GDPR – which gave better protection to individuals at the expense of corporate use of data.

ʺThe European path means respect for individual rights and also means that we will react to a whole range of ethical questions connected with this.ʺ

But in the light of the Facebook-Cambridge Analysts scandal about the abuse of data, Czech Commissioner Věra Jourová now says the EU stance on data protection, which she helped draft and pass, could prove a positive:

ʺThe European path means respect for individual rights and also means that we will react to a whole range of ethical questions connected with this. There is, for example, the question whether Europe should aid the development and use of artificial intelligence in the defence and military fields. There is still a question mark there. There is also the question about how far Europe’s linguistic diversity, I think 24 languages in all, will be a serious brake on us compared with the United States and China.ʺ

And she believes the Facebook scandal is just the start of similar privacy scandals that might tip the data balance in favour of the EU:

ʺIn my opinion, what happened with Facebook is just the tip of an iceberg and that things have to be cleaned up. GDPR will help us to do that. You have perhaps heard that GDPR is a monster that will have an impact everywhere but that’s not the case. I have repeatedly said that common sense and reason is needed here including in the imposition of sanctions.ʺ

Aleš Chmelař, photo: archive of Czech GovernmentAleš Chmelař, photo: archive of Czech Government In the local context, Secretary of State for European Affairs Aleš Chmelař was perhaps somewhat blunt in admitting that the Czech capacity for being an AI superpower is zero given the limited ability to draw on process large volumes of data:

ʺAI and everything associated with it such as algorithms and machine learning is linked to the massive use of big data. Big data when you are not a big state and without a certain cooperation of policy makers and sustained participation of the state administration is very problematic and perhaps almost impossible. This happens in the United States, which in a certain sense is not so good for us, and in China with the cooperation between the state and private sector. That’s something which a country of 10 million people simply can’t do.ʺ

The minister for European affairs rather sees an opportunity for the Czech Republic and Czech companies in participation in much bigger, continent-wide projects:

ʺAI and everything associated with it such as algorithms and machine learning is linked to the massive use of big data.ʺ

ʺSecurity is one logical area where AI should play a role. I should say though that developing a major project and a product using AI on a global level is as demanding as creating a company to build a new civil or military aircraft. If you are not acting on a continental level you simply cannot be competitive. I think that artificial intelligence is even more complicated and complex than building a new large aircraft. And it’s fundamental what the big civil aircraft companies like Airbus and Boeing get in terms of the state support offered.ʺ

In spite of this, Chmelař said the Czech government is preparing a so-called policy or White Paper charting the opportunities of AI for the industry, the country as a whole, and what role the state can play in the overall development.

Michal Pěchouček, the head of the computing faculty at the Czech Technical University, though does see a chance for the Czech Republic, where the auto sector is responsible for around 10 percent of economic output, for developing its AI capacities there along with neighbouring countries and regions:

ʺI would count on AI and the auto sector being one winning card for the Czech Republic.ʺ

ʺThe Czech Republic, Slovakia, and Bavaria are auto production powers. But investment in the Czech Republic in artificial intelligence in the auto sector has largely stalled. I would count on AI and the auto sector being one winning card for the Czech Republic.ʺ

He says other promising areas are cyber security, intelligent households, defence, the space sector, and healthcare.

Pěchouček also believes that Prague could fairly easily establish itself as a centre for artificial intelligence by attracting not just exiled Czech researchers to return home with their talent, but also Slovaks, Hungarians, and Poles. The selling point would be the Czech capital’s general attractiveness and quality of life. That could also hold true for US researchers as well. One of the pluses could be that such researchers are often behind innovative start-ups which can provide a substantial boost for the whole economy.

While many are looking forward to the benefits of AI and robotics in the near future, for some parts of Czech industry it cannot come soon enough and relieve the ongoing struggle to fill job vacancies in an economy where there are more open positions than people to fill them. Milena Jabůrková is vice president of the Czech Industry Association:

ʺWe [companies] now have serious problems to deliver what they promise to deliver.ʺ

ʺFrom the employers perspective, I think we are looking forward to AI and robotics because today we have more than 200,000 unfilled positions and an OECD study says that in 15 years 400,000 people will disappear from the labour market due to ageing and our friends in the trades unions are now proposing to reduce working time. So we [companies] now have serious problems to deliver what they promise to deliver.ʺ

She complains that the Czech political scene has not yet really woken up to the AI challenges and opportunities and that this is the main obstacle to getting preparations on track.

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