Is Privacy Threatening or Leading Innovation?

Abstract:

The fast paced world of the Internet of Things has raised privacy concerns throughout society. This growing concern has led to the EU’s General Data Protection Regulation (GDPR), which strives to strengthen citizen’s fundamental rights. This recent privacy regulation is expected to lead to a revolution in the privacy world, affecting not only European entities, but also many abroad businesses. This report is a forecast on how the new regulation of privacy rights, obligations and sanctions will affect various media industries and future technologies that use Artificial Intelligence. Through research on these areas, this paper will include: (1) a description of the current situation that led to these privacy concerns, (2) a prediction of how privacy regulations will impact future innovations and trends and (3) a prescription of these innovations and trends in the future. The convergence of the digital and physical worlds brings up many questions on what the future will entail. In this digital age, technology holds the ability to generate new issues but can solve them as well.

Part 1: Description of the Current Situation

The surge in advancement of digital technologies generates vast amounts of personal data. From mobile phones to the Internet, people’s purchases, locations, and preferences can be easily tracked, processed, and stored. In industries like advertising and marketing, personal data is information capital and is vital in enhancing product customization, market segmentation, and risk reduction. Although the economic benefits of using personal information are undeniably efficient, the loss of personal privacy has caused uproar in our society. As a global issue, many governments are put in the difficult position of balancing economic opportunities and jeopardizing citizens’ personal liberties. The growing concern for privacy regulations has the ability to affect various media industries and future technologies, particularly those that use Artificial Intelligence.

Privacy concerns are handled in various ways based on differing cultural attitudes. For example, the European Union (EU) enacted The General Data Protection Regulation (GDPR), which is a recent data protection regulation intended to strengthen citizen’s fundamental rights. This agreement is expected to lead to a revolution in the privacy world, affecting not only European entities, but also many abroad businesses. Some of the privacy regulation’s obligations are data subject consent, data anonymization, breach notification, trans-border data transfers, and appointment of data protection officers. The primary objectives of the GDPR are to protect the privacy of citizens and regulate the EU environment for international business. When this regulation is in effect in May 2018, it will influence the EU data protection law as well as all foreign companies processing data containing information about EU residents. The new regulations of the GDPR look to reduce privacy breeches and improve trust in the online environment.

Artificial Intelligence (AI) has become the next major trend affecting privacy regulation. These technologies have the potential to improve society by helping to solve the world’s greatest challenges and inefficiencies. However, in order for AI to work, it needs massive amounts of data. The primary goal of AI research is to create a database of intellectual behavior that can be matched to human beings, otherwise known as the Artificial General Intelligence project. Neural engineers are in the process of altering the brain and creating innovative equipment to supersede genetic features. Because Artificial General Intelligence has not reached, the development of Narrow AI, has began to fulfill complex technological areas like strategic games, translations, and self-driving cars, while also supporting many commercial services. Narrow AI continues to help America become an economic leader through these technologies. Smart vehicles can reduce the number of accidents worldwide and increase mobility for the elderly and disabled. Smart buildings have the potential to save energy and reduce carbon emissions. With artificial intelligence, governments may be able to serve more citizens efficiently, while also saving money.

Artificial Intelligence has many subfields but they employ common techniques throughout all realms of innovation, such as representation, learning, rules, and research. Machine learning is one of the most integral technical approaches to AI. This is the process in which machines can be programmed to learn from experience. It relies on statistical methods to find a decision procedure that explains the data or can predict future data. Machine learning advancements can be seen in the victory of IBM’s chess-playing computer Deep Blue, Apple Inc’s Siri, and Amazon’s Echo, to name a few. There is another branch of AI called deep learning, which attempts to mimic the activity in layers of neurons in the neocortex — where 80% of thinking occurs in the brain. Deep learning software is programmed to recognize patterns in digital representations of sounds, images, and other data. Machine and deep learning AI are core capabilities to business analytics and systems designed to make sense of big data collections.

Ever since its boom in 2015, Artificial Intelligence is in an exciting area of technological advancement. AI has been changing our lives for decades, but never before has it felt more ubiquitous than it does now. Many experts, such as Ray Kurzweil, attribute the pervasive appearance of AI to the onset of “singularity-” a point in time in which Artificial Intelligence exceeds human intelligence. Based on the exponential growth of technology and Moore’s law — computing processing power doubles approximately every two years, researchers believe singularity will be in full exposure by 2045. However, with the new EU Privacy Regulation, GDPR, providing individuals “the right not to be subject to a decision based solely on automated processing, including profiling, which produces legal effects concerning him or her or similarly significantly affects him or her,“ AI may remain nothing more than an experimental procedure (http://www.gamingtechlaw.com/2016/10/privacy-regulation-artificial-intelligence.html). This conflict between privacy breach prevention and the quickly advancing realm of AI has the capacity to change digital media and future technologies.

I would like to evaluate the growing opportunities of the current privacy situation in regards to two of Larry Kramer’s four C’s in his book C-Scape: consumers and convergence. We live in a world where consumers are the ones who have the power to drive the world’s innovations. The ability to understand changing customer needs and behaviors is vital to survive in the digital age. These new privacy regulations stem from the varying values of society. While some individuals are willing to give up personal privacy for ease and convenience, others struggle with the concept of personal exposure, thereby desiring the preservation of their personal information. At the same time this consumer conflict is occurring, the digital and physical worlds are converging as well. While technology is the driver of innovation, it’s the people that are transforming future organizations. We are in the midst of a major digital revolution where technology begins to put the consumer first.

Part 2: Prediction of New Innovations and Trends

With the increasing regulations on consumer privacy and data protections, such as the GDPR, privacy will be a main concern for consumers and companies alike. As we are operating in a connected, global world, coming to a mutual agreement is difficult to achieve with continuous legal involvement. The EU-US Privacy Shield has been developed to protect the fundamental rights of Europeans when European data is transferred to the United States. The GDPR will not be in place until 2018 and the EU-US Privacy Shield has yes to be approved, but they seek to rekindle digital business between two countries with opposing attitudes and priorities towards consumer privacy.

Without the assistance of technology, businesses would not be able to keep up with this challenging legal environment. According to the International Data Corporation (IDC), these privacy protection regulations will create a $3.5 billion market opportunity for security and storage software vendors. Businesses are going to have to adapt to adhere to these changing principles, seeking the assistance of new technologies to assist with compliance. With so many businesses and services operating across borders, international consistency regarding data protection will become a critical point of intervention. The increased concerns regarding privacy means that data protection can be a competitive advantage for new technologies.

The ‘privacy by design’ requirement of the GDPR will also create an opportunity for emerging technologies. Considering privacy by design requires a documentation of the detailed and thorough process of the design and manufacturing of the Internet of Things (IoT) devices, the need for narrow Artificial Intelligence will increase with the explosive rate of information growth. Organization will not be able to collect this vast amount of data necessary to meet privacy policies, without the aid of AI. Predictive coding technology is a machine-learning tool where a human reviewer trains the computer to find data relevant to a case. This AI technology can assist in ensuring compliance with the ‘privacy by design’ requirement of the GDPR. Predictive coding technology combines human guidance with computer-piloted concept searching in order to segregate and filter out personally identifiable or sensitive data (http://www.scmagazineuk.com/how-will-the-new-eu-us-privacy-shield-fit-with-the-upcoming-general-data-protection-regulation/article/486513/). Fostering the development of Artificial Intelligence technologies involves a variety of training and capacity-building efforts. Ethical, security, privacy, and safety training should be an integral part of this maturation process. These factors cannot be engineered around a technology; instead, they must be integral to the development process from the start.

There is an enormous opportunity in the market for the development of technologies in the cyber security sector. Cybersecurity is “a discipline, or set of technologies, that seeks to enforce policies relating to several different aspects of computer use and electronic communication” (http://www.whitehouse.gov/sites/default/files/microsites/ostp/PCAST/pcast_cybersecurity_nov‐2013.pdf). These emerging developments of cyber security will use machine-learning technology, similar to that of predictive coding, to preserve privacy and fairness and ensure that parameters and protocols are preventative. Public and private sectors can spur innovation and maximize the opportunities and free flow of this information while minimizing the risks to privacy. However, violations of privacy are possible even if there were perfect cybersecurity. This creates an arms race of sorts between privacy-protecting technology and privacy- penetrating technology.

In this digital era, businesses will encounter and create risks that they were never exposed to before. Big data caused a lack of trust from consumers and many have pushed away from service providers that were not privacy-friendly. Now that the digital and physical worlds are converging, there is a shift in technology as companies focus on their consumers when development innovations. As Kramer said “power shifts to the consumer” and these new privacy concerns will have a profound impact on enterprises. In an age where the focus had been previously placed on technology, companies who can adjust along with the market place, putting the needs and concerns of the consumers first, will be the most successful.

Part 3: Prescription of the Future

The new privacy regulations create large opportunities for innovative technologies using these AI subsets, ranging from speech recognition and natural language understanding to machine learning and deep learning. There is an opportunity for hackers and system vendors because security and privacy will determine which device and cloud platforms will be sold. Although we cannot predict the future, these new regulations of privacy are creating trends that will influence various media industries.

Powered by AI, Intelligent automation is an up and coming domain that will have a competitive advantage in the future of digital media. This next wave of solutions will weave systems, data, and people together in order to gather unprecedented amounts of data from disparate systems. This technology will provide solutions that will fundamentally change traditional ways of operating for both, businesses and individuals. Intelligent automation machines can potentially regain the previously lost trust of consumers in the digital market place. With trust as the foundation of everything in the business world today, businesses must be able to possess strong security and ethics at every stage throughout the customer journey. The most advanced security systems today go well beyond simply establishing perimeter security, but incorporate a powerful commitment to the highest ethical standards in regards to data. In the future, there will be system architectures that guarantee a complete isolation of user data. The introduction of new hardware features — using cryptography to enable these system architectures — will rapidly change how user data is stored and address the growing concerns regarding data safety and data privacy compliance regulations. This new generation of security solutions will be able to detect intrusions and guarantee full protection of all data.

The new privacy regulations also have the opportunity to create an “underground market” for user data. As consumers are becoming increasingly willing to pay vast amounts of money for data security, privacy will become a luxury good. This will bring about the explosion of more encryption technologies and boutique services as an entirely new market place. The public- key cryptosystem is the cryptography that underlies electronic commerce and confidential communications on the Internet. In the future, there will be continued advances in quantum computing that will secure our communications against attacks using quantum computers. This new quantum-resistant public-key cryptosystem will be used in all of our in-use security protocol but will have no impact on a person’s daily computing experience. These consumers are not going to be willing to hand access to the information that IoT products collect in exchange for things like native advertising. The group of privacy advocates is becoming increasingly resistant to the commodification of personal data. Companies will have to make data transparency a high priority through communication and technology.

In the future, the Internet of Things is likely to meld the digital and physical international worlds together in ways that is currently difficult to comprehend. We have hit a social, technological, and political bursting point. The future of online privacy is blurry and policymakers and technology innovators have an important issue to solve. Whether they will be able to create a secure, socially accepted, and trusted privacy-rights infrastructure is hard to determine. An ideal foundation would be one that allows for business innovation and monetization while also offering individuals choices for protecting their personal information in accessible formats. However, the global concern for privacy regulations will drive technological innovation, which will reinvent industries and the cultures within it. AI technology has the capability to mitigate cultural differences and create an international standard for consumer policy.