A Status Discussion: Will the Proposal for AI Work for SMEs?
On Monday November 13th, SME Europe of the EPP organized a webinar on “A Status Discussion: Will the Proposal for AI Work for SMEs?” moderated by Michal BONI, Member of the European Parliament 2014-2019; First Minister of Administration and Digitalisation of Poland; Senator of SME Europe of the EPP.
The panel saw the participation of Kai ZENNER, Head of Office and Digital Policy Adviser for MEP Axel Voss; Till KLEIN, Head of Trustworthy AI at the Applied AI; Miguel VALLE DEL OLMO, Digital Transformation Attaché at Spain’s Permanent Representation to the EU; Jakub BIŃKOWSKI, Board Member and Director of the Law and Legislation Department of the Union of Entrepreneurs and Employers (ZPP).
Michal BONI opened the webinar by highlighting the importance of discussing the Artificial Intelligence Act in the context of a risk-based approach proposed by the Commission. Mr Boni emphasizes the critical nature of the legislative solution that will be approved, impacting AI development not only in the European Union but globally. He also raises questions about the regulatory approach – and its support for small businesses. There is a need to advocate for clear definitions and obligations for all stakeholders. He continues that the ongoing AI Act negotiations need for clear classification, duties related to a tired approach versus a simpler risk based approach. He also emphasizes the importance of avoiding a situation where SMEs play a passive role and risking the loss of competitive advantages in the European Union.
Kai ZENNER, Head of Office and Digital Policy Adviser for MEP Axel Voss, continued the discussion by stating his active engagement in the negotiations on the AI Act and wanting to conclude negotiations by the end of 2023. The ongoing discussions are considering governance enforcement, foundation models, AI value, prohibitions and high-risk use cases. Mr Zenner notes the complexity of navigating digital laws, especially for SMEs – and acknowledges the AI Act’s attempt to learn from past mistakes and aid SMEs and startups in compliance. He also points out the potential threats and risks and the need for sufficient government and EU investments.
Mr Zenner would suggests SMEs and startups to engage extremely early, already now with the transition period, when we have at least one, two years until there is a need to become compliant. Do not repeat something like with GDPR that many companies woke up very late – but reach out already to enforcement bodies. If there are a regulatory sandboxes, try to connect to those.
From the industry perspective, Till KLEIN, Head of Trustworthy AI at the Applied AI, begins by stating that there are differences between startup-s and SMEs and they are distinct entities. He notes that SMEs often have quality management systems, certifications and experience working with standards, while startups are usually in an early stage without such systems. SMEs may focus on building trust with employees, suppliers, and long-term relationships, whereas startups often need to convince investors. Mr Klein highlights challenges related to expertise and funding – startups having a strong tech focus and SMEs sometimes struggling with basic AI concepts. He also recommends starting with risk classification and understanding whether the tool qualifies as an AI system and assessing its risk level. Engage early with the AI Act requirements, especially if classified as high risk, and seek support from resources and communities.
Miguel VALLE DEL OLMO, Digital Transformation Attaché at Spain’s Permanent Representation to the EU, continued the discussion with the important role of guidelines in helping SMEs operate independently and potentially lowering their costs. Mr Valle Del Olmo argues that there is a need for a balanced approach to regulatory sandboxes. He also recognizes the time constraints for SMEs and suggests that collaboration with larger companies in sandbox testing could be beneficial. Real-world testing would allow companies to experiment with minimal supervision and facilitate quicker development cycles and safer products. The AI Act encompasses elements that can be beneficial and provide indirect support to SMEs. It establishes a minimum set of tools to aid SMEs through means like experiments, knowledge creation, contributing to the development of a supportive market. While these initiatives are valuable, it is crucial to remain mindful of the day-to-day challenges faced by both startups and SMEs.
Jakub BIŃKOWSKI, Board Member and Director of the Law and Legislation Department at ZPP, added that it is important to note the proportionality in regulations, particularly in the design and implementation phases. While acknowledging the need for regulations, Mr Bińkowski highlights the potential negative impact of excessive regulation on innovatio for SMEs. He raises concerns about the complexity of the EU decision-making process, emphasizing the challenges for SMEs to participate effectively in the legislative process. Due to this, there is an important role of organizations like theirs in helping SMEs navigate this complexity.
In conclusion, Mr Boni emphasizes the importance of establishing legal certainty in AI regulation. There is a need gor guidelines, institutional enforcement and a clear roadmap for implementing the AI Act. We should avoid overlaps with other regulations like The Digital Markets Act and Digital Services Act, ensuring coherence in digital solutions and engaging SMEs early in the process. Mr Boni calls for a focused information campaign to raise awareness of AI usage in society and among SMEs. The use of regulatory sandboxes for SMEs is essential.