【 Webinar Series - Innovation, Productivity, and Challenges in the Digital Era: Asia and Beyond 】

Data-Intensive Innovation and the State: Evidence from AI Firms in China

Date: 3 Nov 2021 (Wed)

Time: 10am – 11:10am (Hong Kong Time, UTC+8)

Abstract: Developing AI technology requires data. In many domains, government data far exceeds in magnitude and scope data collected by the private sector, and AI firms often gain access to such data when providing services to the state. We argue that such access can stimulate commercial AI innovation in part because data and trained algorithms are shareable across government and commercial uses. We gather comprehensive information on firms and public security procurement contracts in China’s facial recognition AI industry. We quantify the data accessible through contracts by measuring public security agencies’ capacity to collect surveillance video. Using a triple-differences strategy, we find that data-rich contracts, compared to data-scarce ones, lead recipient firms to develop significantly and substantially more commercial AI software. Our analysis indicates a contribution of government data to the rise of China’s facial recognition AI firms, and suggests that states’ data collection and provision policies could shape AI innovation.

Speaker:

David Y. YANG
Assistant Professor, Department of Economics
Harvard University

Co-authors:
Martin Beraja, Pentti J. K. Kouri Career Development Assistant Professor of Economics, Massachusetts Institute of Technology

Noam Yuchtman, Professor of Managerial Economics and Strategy and Deputy Head of Department (Faculty Development), Department of Management, London School of Economics and Political Science

Discussant:
Matilde Bombardini, Associate Professor of Business and Public Policy, Haas School of Business
University of California, Berkeley

Session Chair:
Zheng (Michael) SONG, Professor at the Department of Economics, Chinese University of Hong Kong and Senior Fellow, ABFER

About the Webinar

Artificial Intelligence (AI), Big Data, multilevel neural nets, the Internet of Things (IoT) and other digital technologies are transforming the world. They are strengthening innovation and productivity and innovation by rendering the future more predictable and reshaping individual, business, social, and government behavior. Asia leads the world in some of these endeavors, e.g., digital platforms. The OECD lists 40% of big new digital technologies as Asian. Almost half of global digital platform business-to-consumer revenues are Asian, versus only 22% from the U.S. and 12% from the Eurozone. Profound new policy challenges arising, in consequence, include: shifting skills demanded in labor markets and “digital divide” inequality, (ii) AI expanding financial inclusion or encoding inequality, expanding or obscuring accountability, increasing transparency or obscuring amoral decision-making, and (iii) digital privacy, unsanctionable on-line libel, misinformation, manipulation, and propaganda. The ABFER, therefore, plans a monthly e-seminar series spotlighting important new research, particularly the Asia-pacific related, into these issues and providing “state-of-the-art” overviews by prominent scholars. We hope policy makers and practitioners will find the e-seminars helpful and will alert researchers to issues needing attention.

Collaborating Organizers

ABFER, CUHK-Zhejiang University Joint Research Center for Digital Economy, The Chinese University of Hong Kong (CUHK) Department of Economics, Center for Internet Development and Governance, Tsinghua University School of Economics and Management (Tsinghua SEM)