Tag: τεχνητή νοημοσύνη

The Proposal for the regulation of Artificial Intelligence

Artificial Intelligence (hereinafter: “AI”) is undoubtedly the “technology of the future”. However, its use, utilization and influence in various aspects of life and activities has long since begun. In fact, it is claiming more and more territory – even in areas that would not have been possible a few years ago. (AI, for example, in the service of justice has already occupied us in our previous article). The EU felt the need, and rightly-albeit a little late, to start the process of proposing relevant regulations. As far as this is feasible.

The European Commission’s involvement with Artificial Intelligence

Demonstrating confidence in a technology that is largely unknown, difficult to understand, or sometimes completely incomprehensible (to most of us) is not an easy task. More precisely: it seems absolutely dangerous. Much more since there has not even been an attempt to regulate its individual parameters.

The European Commission recently published, on 21 April 2021, the Proposal for a Regulation establishing harmonized rules on artificial intelligence. This is the European approach aimed at a credible AI that will serve the European principles, values and, in particular, the human being. This is an effort aimed at mitigating the (given) risks deriving from its gradual expansion.

This proposal implements the political commitment of the President of the European Commission Ursula von der Leyen. The latter had timely announced, in her policy guidelines for the Commission 2019-2024 (“A Union that strives for more“), that the Commission would propose legislation for a coordinated European approach to the impact of AI on people and ethics.

The definition of AI

AI is, as already noted, a concept with which most of us are unfamiliar. But even its definition does not seem easy to understand: “artificial intelligence system” is, according to the Proposal, “software that is developed with one or more of the techniques and approaches listed in Annex I and can, for a given set of human-defined objectives, generate outputs such as content, predictions, recommendations, or decisions influencing the environments they interact with” (Article 3 par. 1).

The purpose of the (proposed) Regulation

The importance of the proposed Regulation is evident in the purpose mentioned in the above Proposal. Such (purpose) is defined as the improvement of the functioning of the internal market by the establishment of a single legal framework (in particular) for the development, marketing and use of artificial intelligence – in accordance with the values of the Union.

We deduct that the Regulation pursues purposes of overriding public interest. Among them: a high level of protection of health, safety and fundamental rights.

At the same time, it calls for the guarantee of the free movement of goods and services, based on AI, at a cross-border level. In doing so, it seeks to prevent Member States from imposing restrictions on the development, marketing and use of AI systems, in so far as the restrictions are not provided for in the Regulation itself.

The Regulation also recognizes the need for uniform regulation at an EU level, in order to avoid any fragmentation of the internal market and to prevent any legal uncertainty. Legal certainty, on the other hand, is considered necessary to facilitate investment in AI and the development of a single market for such legal, secure and reliable systems.

The whole proposal shows the effort to achieve security in the development of AI and its coexistence with the ethics and values of the EU. That is why, after all, the approach of its regulations is done in the light of the risks inherent in the use of AI systems.

The risk-based approach to the use of AI

The Regulation, regarding the ways of using AI, takes an approach based on the risk created by its use. Specifically, the uses of AI are distinguished into those that create: (a) unacceptable risk, (b) high risk, (c) low-not high risk.

Unacceptable risk

Some AI systems are considered to pose an unacceptable risk.

The use of such systems is considered unacceptable because it is contrary to the values of the Union (eg it violates fundamental rights). These are the systems that have significant potential for manipulating people through techniques that address the subconscious beyond their consciousness. They are also systems that exploit the vulnerabilities of certain vulnerable groups in order to substantially distort their behavior.

Such uses of AI are prohibited. The use of systems of remote biometric identification in publicly accessible areas in real time for law enforcement purposes is also prohibited. There may, however, be some exceptions.

High risk

Some AI systems are considered to pose a high risk to the health, safety and fundamental rights of individuals.

Special rules are reserved for these systems. In particular, these systems are permitted on the European market subject to compliance with certain mandatory requirements and ex ante conformity assessment. At the same time, the Regulation imposes clear obligations on the providers and users of such systems. It aims, in this context, at the security and observance of the existing legislation for the protection of fundamental rights throughout the duration of their operation.

These systems include those used in areas such as:

(a) The biometric identification and categorization of natural persons.

(b) The management and operation of critical infrastructure (eg road traffic, water supply, gas supply, heating and electricity).

(c) Education and vocational training (eg evaluation of exam participants).

(d) Employment, employee management and access to self-employment.

(e) Access to and enjoyment of basic private services and public services and benefits (eg assessment or rating of individuals’ creditworthiness).

(f) Law enforcement (eg assessment of the reliability of evidence in the context of the investigation or prosecution of criminal offenses).

(g) Management of immigration, asylum and border controls (eg verification of the authenticity of travel documents and supporting documents of natural persons).

(h) The administration of justice and democratic processes.

Not high risk

Only very limited transparency obligations apply to non-high risk AI systems.

The legislation on Artificial Intelligence must, in any case, be human-centered. The above proposal to a significant degree seems to aim at the above ideal.

It is important, in any case, that the above Proposal makes EU values its priority. It is interesting that it is centered (and correctly) around the risks that may arise from AI systems.

Technological developments are really rapid, even for those who are operating in the field. Much more for the rest of us. However, it is necessary to protect all (those who are in the field and those who are not) from the risks involved in the use and utilization of the facilities of Artificial Intelligence. The draft Regulation is moving (also) in this direction.

A question that will probably be answered by the next generation:

Is it possible to place Artificial Intelligence in a strictly defined framework outside which it will not be able to expand?

I’m afraid not.

Stavros Koumentakis
Managing Partner

P.S. A brief version of this article has been published in MAKEDONIA Newspaper (June 27, 2021).

Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

June 27, 2021
The report of the Pissaridis committee and the Artificial Intelligence in the administration of Justice

What can the report of the (well-known) Pissaridis Committee have to do with artificial intelligence (: AI)? At first glance, nothing. With a closer look, however, we find that this report touches (and how it could not do so) the problems created in our country by the (problematic) administration of justice. However, it is known that artificial intelligence also deals with this issue (already quite successfully).

So here is their “meeting point”: The improvement of the administration of justice!

On the one hand: The report of the Pissaridis Committee

Data related to the administration of justice…

The final report of the Pissaridis Committee (: “Development Plan for the Greek Economy” -14.11.20) presents interesting truths about the administration of justice in our country. It (also) presents interesting suggestions for its improvement.

It records, among other things, the obvious: “Speed and quality in the administration of justice is a decisive factor for the economic development of a country but also for the provision of equal opportunities to its citizens” (p. 65).

However, the facts that it quotes immediately after about our country do not make us proud. Indicatively (with data from 2017): for the final judgment (obviously meaning the issuance of final decisions) in the first instance in the civil and commercial courts, a little less than 500 days is required (a bit less, ie, than a year and a half) – the second worst time in Europe. For the administration courts: about 750 days (just over two years) is required- the fifth worst time in Europe.

The feeling we have is clearly not great (and let’s not even touch on the issuance of decisions on the second degree or a possible appeal before the third decree courts) … Even if we accept the facts as exactly stated in the report, we are lead before unfavorable findings. This report lists some of them.

…and the problems in entrepreneurship

“Due to the delays in the administration of justice, Greece is ranked only 146th in the world in terms of the implementation of contracts according to the annual Doing Business survey of the World Bank for 2020.

Another element of concern is that, according to the World Economic Forum (2018), the perception of Greek businesses about judicial independence is lower than the European average. The picture presented in the above indicators is due to entanglements both inside and outside the judicial system. Anchors outside the judicial system concern the legislative process and public administration. For example, the complexity and overlaps between laws, which give rise to legal disputes and unnecessarily burden the judiciary system… “.

It is (more than) obvious that these problems are directly working against entrepreneurship; in the end, against the national economy.

And on the other hand: AI in the service of the administration of justice

The professions of the judge and the lawyer seem cut off from technology. But are they really?

The lawyer used to look for the legislation through huge volumes. Correspondingly, they looked for the jurisprudence through dozens of legal journals that, one by one, had be to researched and studied. And so did the judge.

The lawyer used to give their manuscripts for typing “to the girl across the courts”.

Even if there was such a lawyer today, who would trust them? What if we met a lawyer who would not have access to an online legal database? Could we trust them?

The answers seem obvious.

But would the negative answer to the question: “Would I trust AI more than a lawyer or a judge” be as obvious?

Let us not rush to answer in the negative!

Two years ago, twenty top (and most experienced) American lawyers-members of global law firms were called upon to deal with (as part of a landmark study) specialized LawGeex AI. The aim was to identify specific defects in five non-disclosure agreements (NDAs) which are known to be the first step in most trade agreements.

The study focused on efficiency and speed.

Unfortunately for the lawyers – fortunately for development, the “machine” came out victorious. The results are impressive:

LawGeex AI achieved 94% accuracy in just 26 seconds.

Lawyers achieved an average accuracy rate of 85% by spending 92 minutes on average…

However, this is not the first victory of AI in the legal world…

One year before the victory of LawGeex AI, the AI system called Case Cruncher Alpha was faced with one hundred (100) lawyers from the most prestigious Law Firms in London.

The “rivals” (AI on the one hand and lawyers on the other) were given the basics of hundreds of cases of erroneous PPI sales (: payment protection insurance). The aim in this case was to predict whether the out-of-court dispute resolution body of a financial nature (: Financial Ombudsman) would accept the claims raised.

The figures, here too, look shocking:

Of the 775 forecasts submitted by the contestants, CaseCruncher had a success rate of 86.6%.

The success rate of lawyers amounted to 66.3%…

Both LawGeex AI and Case Cruncher Alpha are commercial products. And as much as we (lawyers or businessmen) are shocked by the possibility, wouldn’t we like the idea of trying (and, why not, using) their services?

And further: Would it seem safer for the administration of justice for the judges to have such an “assistant” when on a trial? An “assistant” who would provide them, in a matter of seconds, with all the information they needed to get give justice? Not only with the applicable legislation but also with the trends of case law at a national (and not only) level?

It indeed seems really dangerous to replace our lawyer or, much more, our judge with AI.

But is it time to provide them with such tools?

Or, for now, encourage them to study them and, why not, utilize them?

The proposals of the Pissaridis Committee

The proposals to improve the administration of justice could only be described as interesting. Let us focus on two of them (p. 70): (a) the institution of assistant judges and (b) the digitization of justice. Specifically:

The institution (and branch) of the assistants

“For the most efficient use of judges’ time, it is proposed to establish a separate branch of assistants.

Assistants are used in many other countries such as France (assistants de justice), the United Kingdom (judicial assistants), and the United States (judicial clerks).

The assistants who assist judges with case law research in these countries are selected from among the best law school graduate and have a short term of office (of only a few years) after which they can work either as judges or lawyers. One way to implement the institution of assistants in Greece is for them to be judges in lower ranks who serve part of their time and for a short period of time in the position of assistant, gaining useful experience for their future development in the industry “.

The digitization of justice

“The process of digitizing justice must continue at a rapid pace. … The success of the project requires not only the acquisition of information systems, but also the organizational restructuring, so that the possibilities provided by these systems are utilized. In particular, the operation of information systems should be adequately supported by staff with digital skills. The use of these systems should be made mandatory… ”

The (near) future

We must take it for granted that the utilization of AI in our country (as well) is not far. We will first see it in law firms and law offices. We will see it later, inevitably, in the administration of justice as well.

What is happening today is that the LawGeex AI product can be purchased by someone (lawyer / law firm) in order to improve the services they provide to their clients or, simply, to facilitate their work. Obviously, one could locate and acquire other similar products.

Respectively, what is already proposed by the Pissaridis Committee (to improve the administration of justice) is the establishment of a (already existing in other legal systems) distinct branch of judicial assistants. Would it seem impossible to imagine AI in the position of assistants (or “assistants” of assistants)? Would anyone dare to answer in the negative?

And if there is even one (senior-without a doubt), I have a question for them: Would they dare to think (just thirty years ago) that they could replace the many tens of volumes of recent jurisprudence with useful tools of online legal databases? And that, in the same database, they could easily, quickly and efficiently spot (“in the blink of an eye” -literally) the current legislation [instead of having to refer to the one hundred and eleven (111) volumes of the Standing Code of Legislation (of the well-known, then, “Raptarchi”) – provided it was correctly, and without omissions, updated]?

The recession of our national economy for the last year is deep – it is expected to land at the, not at all negligible, 10%. To this end, we must work together to achieve its overthrow.

The improvement of speed and quality in the administration of justice will be (according to the Pissaridis report as well) a decisive factor for the economic recovery and development of our country.

Artificial Intelligence in the service of the administration of justice may today, in the minds of some, seem utopian. It is a given, however, that it is already a reality. Its further development is expected to be rapid. In this way, it will become a further useful (but also accessible) tool in the hands of lawyers and, without a doubt, of judges as well.

Let us allow ourselves to imagine this day; it is not, after all, that far away.

It will be, without a doubt, a better one for lawyers ˙ for judges ˙ for businesses.

And in the end: for the economy and for mankind.-

Stavros Koumentakis
Managing Partner

P.S. A brief version of this article has been published in MAKEDONIA Newspaper (January 24, 2021).

Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

January 24, 2021
Distributed Ledger Technologies (DLT): businesses and everyday life
Distributed Ledger Technologies (DLT): businesses and everyday life

Ι. Preamble

In a previous article we referred to the 4^th Industrial Revolution, the technologies that constitute it, the cosmogonic changes it is bringing. We also mentioned the fact that there is no proper institutional framework in place, as well as the need to introduce one to welcome and utilize those technologies, aiming to the sound development of both businesses and the country.

Distributed Ledger Technology is uniquely placed among the technologies constituting the 4^th Industrial Revolution. The implementations of this technology are countless, “the number of which is immeasurable”, to copy the Old Testament (Psalm 103,25). With that admission in mind, a simple article could of course not sufficiently cover them all, even more so if said article is written by a non-expert.

It is, though, true that these technologies, their implementations and their benefits, do not only regard the experts.

They regard all of us.

None excluded.

ΙΙ. Distributed Ledger Technology (DLT) and blockchain

We have already mentioned (in the aforementioned article) that “Distributed Ledger Technology is a database which, instead of being kept in a central location, it is distributed in a network of computers. The users of the computers with access to the network, depending on the licenses they hold, are able to access the information and/or add data. The most common DLT is the blockchain technology. Blockchain is the most common type of Distributed Ledger Technology.” We have also mentioned, regarding blockchain, that “The “chain” is protected in its entirety by complex mathematical algorithms, aiming to ensure the integrity and safety of the data. This chain is a complete recording of all the transactions recorded in the database. The most known application of blockchain is the creation and circulation of cryptocurrencies, as well as the accommodation of transactions entailing cryptocurrencies. Blockchain is said to be bringing changes more significant than those of the creation and broad use of the internet.

ΙΙΙ. The actions taken by the European Union

Given the severity and magnitude of the issue, as well as the expansion and utilization of DLT on a global level, EU is taking many actions, especially with regards to blockchain. Unfortunately, though, the technology is “running” too fast. In most cases so fast that most of us are unable to follow it – not even sufficiently.

A few days ago was the one-year anniversary of the passing of a very interesting text. The European Parliament resolution of 3 October 2018 on distributed ledger technologies and blockchains: building trust with disintermediation (2017/2772(RSP)). This text (hereafter the “Text”) entails several and specific statements. It also offers specific directions to the European Commission for the utilization of DLT applications within the European Union.

IV. The advantages in using DLT applications

Using DLT has important advantages. Indicatively:

(a) DLT and blockchain can prove to be tools that offer to their users the ability to control their own data. To decide which data will be included in the distributed ledger and which will not, who will be able to see them and who will not.

(b) DLT can minimize transaction costs. Middle men prove to be unnecessary, and so are the fees they charge. The final cost of services and products ends up being lower, benefitting not only the businesses, but the consumers as well.

(c) DLT, can, through the necessary encryption and control mechanisms, as well as by establishing a relevant electronic model, contribute to the improvement of transactions’ safety and trust.

(d) DLT promotes the pseudonymization but not the anonymization of its user. (That is the point that kicked off a big discussion regarding the compatibility of DLT and GDPR.)

(e) DLT can provide a framework of transparency and reduce corruption, detect tax evasion. Also: it can track unlawful payments and appropriate assets, facilitate anti money laundering policies.

(f) Adopting DLT renders ensuring data integrity and security possible.

(g) Cyberattacks seem to not have such a big effect on DLT applications, since they have to successfully target an unidentified number of servers, not just one.

Simultaneously, the dangers of DLT applications, seem, at least for now, insignificant.

V. Distributed Ledger Technologies (DLT), decentralization and applications

It is unclear how many applications DLT has. It seems that they won’t be exhausted – at least not in the foreseeable future.

The ability to create an environment of trust between transacting parties and the lack of need for third parties to mediate a transaction completely reverses today’s transacting reality. This fact can limit (and, eventually, completely eradicate) the “old ways” of conducting business and transactions in general. It can also improve the services offered and achieve a significant, in some cases, deduction of costs -in a broad spectrum of sectors.

A possible utilization of DLT will have a significant impact on public governance and the role of government institutions. Papers studying possible scenarios of adoption of DLT public networks are expected to come out soon. The European Parliament has directed the European Commission to do so.

It is a given that the spectrum of possible DLT applications is significantly broad. The economy and, if not all, most of its sectors will most likely be affected.

Indicatively:

(a) Energy and environment friendly applications

Utilizing DLT applications in the energy field can have multiple benefits. It can contribute to the production of “green” energy – even at household level, to energy exchanges and energy donation. It can contribute to a more efficient integration of renewable energy and to its use as an electric vehicle power supply. It can also contribute to the precise tracking of renewable or carbon energy certifications and to the creation of new opportunities in circular economy, by providing motives for recycling.

(b) Transport

In transportations, DLT can contribute in the processes of registration and administration of vehicles, verification of driving distances, smart insurance and charging of electric/electronic vehicles, among others.

(c) Healthcare sector

In this sector, the utilization of DLT applications is most likely going to be significant. It is possible (and is logically expected) that DLT will promote:
- The improvement of the efficiency of data in clinical study reports.
- The digital exchange of data between public and private institutions, with the approval of the interested patients.
- The improvement of the efficiency of healthcare, thanks to the interoperability of electronic health data.
- The verification and confirmation of a drug’s identity and the facilitation of medicine distribution.
It is of extreme importance to stress that DLT technology ensures the privacy of sensitive, health-related personal data and allows data subjects to control, by themselves, their data of that nature. This means that they can choose which health data of theirs will be offered and to whom, and to give their permission for their use by insurance companies and healthcare providers.

(d) Supply Chains

DLT can:
- Contribute to the improvement of supply chains,
- Facilitate the tracking of the goods and their origin, their ingredients or components,
- Improve transparency,
- Offer guarantees for the compliance with sustainability and human rights protocols in a product’s place of origin.
By utilizing it, the risk of illegal (or unauthorized) interferences of products in the supply chain minimizes. Consumer protection is also ensured, along with healthy entrepreneurship and, of course, government revenue. DLT can be used as an important tool in the hands of custom officials when checking for counterfeits.

(e) Education

With reference to specific cases, some of which were presented before the courts, while others were not, cases which have become public during the past year, a big discussion has started. A discussion regarding the ethical and legal contempt and the consequences the one falsely declaring of a degree faces or should face.

When using DLT, the certification of academic qualifications, higher education degrees and knowledge and skill certification, proves very easy. Specific education and certification organizations have already adopted this technology. By doing so, they ensured a secure connection between a specific degree or knowledge and skill certification with a specific person.

In this regard, we should be expecting from the European Commission (after the relevant order by the European Parliament) a study on the possibility to create a European network (utilizing DLT) in order to share data and information, aiming to a more efficient recognition of academic degrees. In this same regard, we should be expecting relevant initiatives from the member-states, as well as from the education and certification institutions concerning the qualification degrees they issue.

If such a system was generally adopted, one could not really be tempted to claim they hold a title that they do not. The result? More transparency and meritocracy, while the relevant authorities and parties involved and will not bother with such cases (cases like the aforementioned).

(f) Creative industries and copyrights

Utilizing DLT can securely authenticate and help manage copyrights, related rights and patents. It can facilitate their protection. Identifying ownership and (moral and economic) intellectual property rights could prove to be fairly easy through an open public ledger. And, if that was possible, the need for intermediaries to receive, on behalf of the creators, the relevant payment for their creative content, would eliminate.

(g) Financial sector

The international financial sector is probably leading, on a global level, the effort to detect and utilize DLT applications. And this makes sense – DLT is very valuable to this sector. It is very valuable in the field of (innovative) financial intermediation. In the improvement of transparency. In minimizing transaction costs and indirect expenses – and all that thanks to the rationalization it offers and to the better (and safer) data management.

The subversion of the “ruling” class, resulting from the use of DLT applications on specific procedures, as a means of perusing cost-effectiveness, managing human resources, is already a fact. And let’s not forget cryptocurrencies, probably the most recognized application of DLT. The effects on global economy and the dangers that may be hiding have not yet been estimated.

The inability of the global financial system to prevent the use of cryptocurrencies does have an interesting result: the (necessary) accepting of their existence and the effort to incorporate them in the European settlement system.

VI. Smart Contracts

Technology is the enemy of those who cling (or, futilely, try to cling) to past habits.

What has history taught us? That technology is the one which will, eventually, win all such battles.

We, lawyers, are bound to be the first ones to fight smart contracts (those contracts that all one needs to draft, enter and implement them is a few lines of code and an “enter”). It is also a given that smart contracts will win this battle.

Despite the fact that we still haven’t even familiarized ourselves with this term, the use of smart contracts seems to be inexhaustible. And all that thanks to DLT applications.

What is the bigger issue, though? The lack of legal certainty.

Smart contracts are mostly unregulated: as far as the liability of and the risks undertaken by the transacting parties, the applicable law, the competent courts… One thing is certain: smart contracts will gradually prevail over regular ones. And as long as the validity of a digital, cryptographed signature enhances legal certainty, the use of smart contracts will keep getting more “user friendly”, prevailing over regular contracts.

And even more important: We should take it as a given that technology will start (little by little) to replace us lawyers and remind us that we are not as important as we would like to think.

VII. Policies for the promotion of DLT technologies in Europe

The fact that the European Parliament accepts that DLT is unregulated is quite significant. At the same time, the European Parliament has adopted the position that the European Union should not, for now, regulate DLT, but it should try to eliminate all the obstacles in the way of blockchain applications.

The European Parliament has also accepted that the European Commission should valuate and develop a European legal framework which will resolve possible jurisdiction issues. Such issues would be those that could potentially arise in case of fraud or criminal matters relating to transactions realized in a DLT framework. It has also been proven that the European Commission and the competent national authorities are those that will provide for the prompt emerging of technical expertise and regulatory capacity, which will allow for a fast legislative or regulatory action when deemed necessary.

DLT can be best applied if certain requirements are met. Additionally, it would have to “go through” certain actions taken by the European Commission and member-states. And not just those.

The awareness and training of citizens, businesses and public authorities is completely necessary, in order to facilitate the understanding and integration of this technology. The broadening of DLT research is essential as well, and so is the undertaking of the relevant studies, investments on this field, funding research initiatives and development and promotion of strategies for training and retraining on digital skills. These are only some of the actions that are expected to decisively contribute to the active and unrestricted participation of the European community on the necessary shift of perceptions and practices.

VIII. In conclusion

Distribution Ledger Technologies (DLT) already have multiple applications (“the number of which is immeasurable”) on many sectors of the economy. We should all take as a given that they will soon cover all its sectors -none excluded. And even more so: our lives and reality.

The European Union indeed has, according to the European Commission, “an excellent opportunity to become the global leader in the field of DLT and to be a credible actor in shaping its development and market globally”.

The European Union is expected to undertake initiatives to familiarize, promote awareness and train its citizens on those technologies. For tackling the interstate digital divide.

That should, respectively, happen in our country as well, as the digital divide between the Greek citizens proves wide. It should quickly close. A shining example for us to follow is that of Estonia.

The state, businesses and their unions should look for ways to utilize DLT applications, while there is still time. Those of the businesses that will quickly realize the new regime and will utilize the relevant opportunities will have a significant advantage compared to the rest.

And we, on our part, as active citizens, have a duty to pay a lot of attention to what tomorrow will be our reality.

To listen!

To study!

To collect all relevant information! Not because it will somehow be mandatory to be familiar with such applications and technologies, but because they will, very soon, prove entwined into our own existence and reality.

Those of us who will chose to turn a blind eye to the “next day” will certainly find ourselves marginalized and isolated.

The monks of Mount Athos have already, very consciously, made their choice.

What about the rest of us?

Stavros Koumentakis
Senior Partner

P.S. A brief version of this article has been published in MAKEDONIA Newspaper (October 13th, 2019).
October 13, 2019
The 4th Industrial Revolution: can development be regulated?

Ι. Preamble

The phrase «Graecum est; non legitur» was common in Latin-speaking countries during the Middle Age. It is said that this is where the phrase «That‘s Greek to me» derived from -a phrase first appearing, in this form, in 1599, in “The Tragedy of Julius Caesar” by William Shakespeare.

The Greek version of the phrase (“this is Chinese”) is very familiar to all Greeks-unfortunately as a philosophy as well: it shows that we are unable to understand anything too complicated, and so it is not even worth trying.

The term “4^th Industrial Revolution” (aka “Industry 4.0” or “I 4.0” or “4IR” or “I.4”) was not that appealing to me.

Until recently.

I realized (thankfully, not too late) that this term entails a true cosmogony.evelopments (more or less) familiar, as well as completely unknown. Terms that could make someone quite easily say that “this is Chinese”, stating their indifference, maybe that this all is not worth their time and, simultaneously, quitting. Could this be too risky?

ΙΙ. The Fourth Industrial Revolution

The first industrial revolution, which started in the late 18^th century in Britain, was identified by the industrial utilization of machines, the power of water and steam. The second, late 19^th century, was identified by mass production, assembly lines and utilization of electricity. The third (late 20^th century) by the utilization of electronics and information technology.

What about the fourth, that just started?

4IR reinforces what came to be called as “smart factory”. Cyber-Physical Systems monitor and supervise physical processes taking place within “smart” factories, create a virtual copy of the natural world and take decentralized decisions. Cyber-Physical Systems communicate and cooperate with humans, as well as (autonomously) with each other in real time. The technology used is constantly improving with the introduction of self-improvement, self-management, self-testing, artificial intelligence and smart employee support.

Nonetheless, it seems that 4IR’s content is infinite. Its limits have already gone way beyond the limits of factories. Even the smart ones. And, according to Alec Ross («Industries of the future”, 2016): “The coming era of globalization will unleash a wave of technological, economical, andsociological change as consequential as the change that shook my hometown in the 20th century and thechanges brought on by the Internet and digitization as I was leaving college 20 years ago. Try to imagine a breakthrough in sectors of business so different from each other, as are life sciences, finance, war and agriculture, and be sure that someone is already trying to come up with it and make it marketable”. Since then, three years have already passed. Some of these changes are crystal clear. Some others already parts of our daily lives.

Furthermore: 4IR has already blurred the boundaries between the natural, biological and digital world.

ΙΙΙ. Technologies constituting 4IR and the (cosmogonic) changes that come from it

In a brief article like the present one could obviously simply not reference all technologies constituting 4IR, not even mention a sufficient number of them – even more so someone who is not an expert in the field. The same goes for the cosmogonic changes brought on and affecting industrial manufacturing, services (financial or other), the economy, society, human relations -and so many more.

One could only indicatively make some references, and those being only briefly mentioned in the present – as a foretaste:

Internet of Things (ΙοΤ): IoT is a network through which “smart” devises or objects communicate (e.g. cars, electronical domestic appliances, watches, clothes) incorporating electronical means, software, sensors and access to a network, allowing them to interconnect and exchange data. The philosophy behind IoT focuses on the interconnection of all electronical appliances via a Local Area Network and/or the World Wide Web. When more objects operate jointly, it is said that they have ambient intelligence. IoT makes it possible for specific “smart” appliances and objects to exchange valuable information for meeting specific needs as best as possible, as well as, under specific circumstances, acquire unitary computing power.

Robotics: The field of robotics is one implementation of automation. Robotics’ objective is to study, design and realize robots as well as conduct research for their further improvement. A robot, according to a definition given by the Robotic Industries Association (RIA) is “a reprogrammable, multifunctional manipulator designed to move material, parts, tools or specialized devices through variable programmed motions for the performance of a variety of tasks”. Robots are not used today solely for industrial manufacturing, but they have multiple other applications (indicatively: medical and domestic use).

Virtual Reality (VR): VR is a method used to visualize and process complicated data. VR users can interact with each other using computers, create the illusion they exist in a virtual environment and, worth mentioning, under circumstances have the ability to wander and interact with said environment.

Augmented Reality: Augmented Reality technology is the one augmenting the natural world with digital elements. It is mostly used in mobile appliances, depicting the natural world while augmenting it with digital elements (texts, sounds, videos). The combination of a camera with an image-indicator or even with a mobile appliance’s GPS system, make possible the projection of additional data of the image or the geographical location respectively, creating an information-wise augmented end result. The data provided can be perceived either from the mobile devises’ screens or via special augmented reality glasses.

Artificial Intelligence (AI): AI is the field of computer science, which deals with designing smart (intelligent) computing systems, meaning systems that show characteristics of human intelligence and conduct. The classic/symbolic AI is based on understanding mental processes and simulating human intelligence by approaching it with algorithms and systems based on knowledge, building on symbols (e.g. systems of rules). Computational intelligence or connectionist or non-symbolic/subsymbolic is based on imitating the biological function of a human brain, much like the process of species evolution or brain function (e.g. neuronal networks and genetic algorithms).

Digital transformation: Digital transformation is the incorporation and utilization of digital technology in all the operational aspects of a business, aiming to a rapid enhancement of its performance.

Distributed Ledger Technology (DLT): DLT is a tool for recording ownership – it could for example show the ownership of money or other assets, like immovable property. A distributed ledger is a database which, instead of being kept in a central location, it is distributed in a network of computers. The users of the computers with access to the network, depending on the licenses they hold, are able to access the information and/or add data. The most common DLT is the blockchain technology.

Blockchain: Blockchain is the most common type of Distributed Ledger Technology. Its name comes from the fact that transactions are grouped together, in order to form “blocks”, which are connected to each other in chronological order, forming a “chain”. The “chain” is protected in its entirety by complex mathematical algorithms, aiming to ensure the integrity and safety of the data. This chain is a complete recording of all the transactions recorded in the database. The most known application of blockchain is the creation and circulation of cryptocurrencies, as well as the accommodation of transactions entailing cryptocurrencies. Blockchain is said to be bringing changes more significant than those of the creation and broad use of the internet.

Smart Contract: Smart Contracts are programs (codes) that are automatically activated and executed under specified conditions. The relevant procedure is recorded in a blockchain. This way the data put in a smart contract cannot be changed or disputed. Smart contracts offer safety and minimize costs.

Platform economy: Trade tends more towards digital business platforms by the day. Platforms are electronical computing systems that can host services which allow the consumers, businessmen, businesses and wider audience to connect, share resources or sell projects.

Share (or sharing) economy: Utilizing share (or sharing) economy and using the proper technological platform facilitate easy contact and transactions (in exchange for a fee or not) amongst the interested parties (e.g. owner of an apartment which is not being used, a parking spot not needed or an ancient Greek teacher with time to spare and, respectively, of those interested in receiving these services). The results of an economy operating this way is cheaper and more efficient services for those choosing to use them (as those offered by Beat, Uber or Airbnb).

Digital energy: Approaching energy digitally rapidly changes concepts like saving, consumption, storing and producing electrical energy. This approach is possible with the help of technology, computing, data analysis and digital means. The end consumer is turned from a passive “payer of bills” into a smart receiver of digital services by their energy provider. For example, the consumers in some European countries (UK, the Netherlands, Germany) are able to store in domestic batteries cheap energy from RES or cheap electricity from an electricity network (e.g. with night charges or from cheap zones) and use it during other times of the day to cover possible overcharges of the network, when the market price of KWh gets high or there is high demand from the network.

Digital health: Digital health is the convergence of digital technologies and health, healthcare, living and society, with the goal to more efficiently offer healthcare and, in the end, more personalized and effective therapy. It entails the use of communications, information and specialized technologies. These technologies entail, among others, software solutions and services, mobile devices and/or remote monitoring sensors.

Biotechnology: Biotechnology is the sum of technical processes that focus on the best possible utilization and use of the traits of living matter (either that of organisms or their components -e.g. enzymes), aiming to increase the production of products already produced and the creation or production of new ones, with a substantial added value and importance for humanity.

Neurotechnology: Neurotechnology is the technology which allows us to understand the function of the human brain, consciousness and thought. Neural networks, on the other hand, are the result of the merger of biological intelligence and mechanical intelligence and usually referrs to the connection between the human brain and computers.

Drones: They are internationally known as UAS (:Unmanned Aircraft System) or UAV (:Unmanned Aircraft Vehicle) or RPAS (Remotely Piloted Aircraft Systems). The Greek Civil Aviation Authority uses the term UAS. UAS are unmanned flying machines. Their size varies, from very small (size of a game drone) to that of a proper airplane. Instead of a pilot, there is a “handler” who either drives it from the ground (remote control) or programs its route before the flight, so it moves automatically, following the flight route already specified (“self-steering” – they are flown by the “electronic orders” program, which is loaded on their memory beforehand and is executed during the flight). Their use is already quite extended: for peaceful purposes or not.

3D Printing: 3D Printing is a method of making objects by consecutively adding successive layers of a material. 3D Printers are mainly used for manufacturing tangible models and prototypes by designers, engineers and new product development teams. Nonetheless, they are already used for printing parts, spares and bigger constructions by using different materials and different machines and physical properties.

IV. 4IR and the (necessary) regulations

With all those (often completely elusive) changes happening all around, one could justifiably wonder: Which legal system, regulatory environment, rules apply when a dispute arises from those new technologies (with only some of them having been mentioned above)? According to which law are the (surely) hundreds of thousands relevant questions arising answered -those questions that could justifiably be asked to a lawyer? And who would be the right lawyer?

It is more than obvious that the answer to those questions does not exist: when the cognoscenti find it quite difficult to follow the rapid developments of technology (and we, in our ignorance, only occasionally and struggling when trying) no one could ever think of a proper regulatory environment -an applicable law that would holistically address the issue. Simply put: nothing of the sort exists.

Nonetheless, this does not mean that complete inaction is justified. The changes happening, e.g. in finance, in economy and in our lives from the implementation of blockchain are mind-blowing. Indicatively: cryptocurrency transactions (the most known of which: bitcoin), conversions, either between cryptocurrencies or between cryptocurrencies and currencies more known and accepted, the acceptance of bitcoin (by specific countries) as a means of payment is now a fact. Passing the appropriate regulations for the protection of transactions and the ones transacting is nothing but a deadlock. Some countries have already moved or are moving towards that direction. Let us all watch what is happening internationally and (need be and up to a level) let us copy the innovators.

V. In conclusion

The changes that come with the Fourth Industrial Revolution are cosmogonic and do not only regard production and factories -they regard, directly and literally, all our everyday lives.

If we manage to go past our inability or denial to understand what is happening and we stop giving up by saying “this is Chinese”, we can listen and pay attention to what the experts are saying -as much as each of us can.

Even more so, what we must do, even ex-post, even if we struggle trying to follow the rapid developments, is to ensure the passing of (nonexistent today) proper regulations: in a national and an international level.

For the assistance of the healthy development of our country.

For the protection of the transactions and those conducting them.

For our, in the end, protection and benefit.

Stavros Koumentakis
Senior Partner

P.S. A brief version of this article has been published in MAKEDONIA Newspaper (September 29th, 2019) and in Capital.gr.

September 30, 2019

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