Introduction

As technology rapidly advances, policies, laws, and regulators face the challenging task of balancing between encouraging innovation and the need for healthy competition, consumer protection & data protection – among other regulations. Emerging technologies like artificial intelligence (AI), machine learning (ML), and blockchain present unique regulatory hurdles that demand careful consideration when creating the laws to govern their operations. Many states have faced challenges with innovative entities emerging and bypassing the brackets of existing traditional regulations and restrictions.

Challenges of Traditional Regulations

Some of the challenges facing regulations include a pocket of outdated rules that do not govern aspects of evolving technology. These challenges can be categorised under two main focuses: business and technology.

Business Challenges

The Pacing Problem

Regulatory agencies often operate within rigid structures that resist rapid change, making it difficult to address emerging technologies effectively. Bakul Patel from the Food and Drug Administration (FDA) emphasises that existing regulatory approaches are ill-suited for the iterative and fast-moving nature of digital health innovations. This growing disconnect underscores the urgency for regulators to adapt more swiftly.

Modern innovations can scale quickly, outpacing the lengthy policy cycles that often span five to 20 years. For instance, while startups like Airbnb achieved global reach in just a few years, regulatory frameworks have struggled to keep up, leading to complications in areas like short-term rental regulations.

The challenge of balancing regulation with innovation is complex. Regulators must avoid both the “too fast” and “too slow” problems, ensuring that regulatory frameworks can adapt without stifling technological progress. As industries evolve, a more flexible and responsive regulatory approach will be essential to foster growth while safeguarding public interests.

Technological Challenges

Cybersecurity Challenges

Cybersecurity remains a pressing concern, especially in fintech and digital health. Malicious cyber activities have escalated, with financial services experiencing significant attacks. For instance, there were 9 million+ cyberattacks on financial institutions in 2023 alone. Healthcare has witnessed a remarkable shift towards technology-driven solutions; therefore, cybersecurity is essential in the industry.  For example, the industry is experiencing a revolution driven by the advancement of Software as a Medical Device (SaMD), which is designed to carry out various medical functions, including diagnostic analysis. As SaMD collects sensitive health data, it requires stringent cybersecurity measures to protect patient information from breaches.

 Challenges Posed by AI

Public sentiment is increasingly in favour of regulating AI technologies. However, traditional regulatory frameworks often struggle with the complexities of AI, particularly the “black box” problem, where algorithms make critical decisions without transparency. This lack of understanding raises concerns, especially as these algorithms influence significant aspects of life, such as credit approvals and healthcare diagnostics.

Experts propose greater transparency in algorithmic processes, and recent GDPR provisions require companies to explain how algorithms operate. Additionally, algorithmic bias presents a significant risk; studies have shown that some algorithms may perpetuate discrimination, impacting areas such as hiring and lending.

As data privacy and security challenges grow alongside technological advancements, regulators must adapt their frameworks to address these complexities. Ensuring data protection while fostering innovation is essential for maintaining consumer trust and safeguarding against potential harm. With increased transparency and fairness in AI and data practices, stakeholders can better navigate the evolving digital landscape.

The Way Forward: A State’s Effort

In an era where AI continues reshaping economies and societies worldwide, Kenya is strategically positioning itself to leverage this transformative technology. The Ministry of ICT and Digital Economy, in collaboration with the German Agency for International Cooperation (GIZ), is leading the development of a comprehensive National AI Strategy aimed at harnessing AI’s potential while ensuring ethical governance.

National AI Strategy Development

From May 15 to 17, 2024, a stakeholders’ workshop took place in Naivasha to refine Kenya’s National AI Strategy. This workshop, the third in a series, gathered a diverse group of participants, including government representatives, private sector leaders, industry experts, and civil society organisations. The aim was to craft a strategy tailored to Kenya’s unique needs and aspirations.

The National AI Strategy outlines a vision for Kenya to emerge as a global leader in artificial intelligence. Key discussions during the workshop emphasised:

•       Investment Attraction: Fostering an environment conducive to ethical AI development and investment.
•       Alignment with Global Frameworks: Integrating objectives with international policies, including UNESCO’s initiatives and the African Union’s NEPAD framework.
•       Emerging Technology Focus: Recognising AI as a rapidly evolving technology with significant impact potential.
•       Human Rights Considerations: Ensuring AI systems are inclusive and representative of Kenya’s diverse population.

As the Ministry finalises the strategy, stakeholder engagement remains vital. Collaborative efforts will pave the way for pilot projects and validation exercises, contributing to both short-term and long-term national goals. With continued commitment, Kenya is poised to become a regional leader in AI, fostering innovation and enhancing public services for a prosperous digital future.