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Public Procurement and Innovation for Human-Centered Artificial Intelligence

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  • Naudé, Wim

    (RWTH Aachen University)

  • Dimitri, Nicola

    (University of Siena)

Abstract

The possible negative consequences of Artificial Intelligence (AI) have given rise to calls for public policy to ensure that it is safe, and to prevent improper use and misuse. Human-centered AI (HCAI) draws on ethical principles and puts forth actionable guidelines in this regard. So far however, these have lacked strong incentives for adherence. In this paper we contribute to the debate on HCAI by arguing that public procurement and innovation (PPaI) can be used to incentivize HCAI. We dissect the literature on PPaI and HCAI and provide a simple theoretical model to show that procurement of innovative AI solutions underpinned by ethical considerations can provide the incentives that scholars have called for. Our argument in favor of PPaI for HCAI is also an argument for the more innovative use of public procurement, and is consistent with calls for mission-oriented and challenge-led innovation policies. Our paper also contributes to the emerging literature on public entrepreneurship, given that PPaI for HCAI can advance the transformation of society, but only under uncertaint.

Suggested Citation

  • Naudé, Wim & Dimitri, Nicola, 2021. "Public Procurement and Innovation for Human-Centered Artificial Intelligence," IZA Discussion Papers 14021, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14021
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    References listed on IDEAS

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    More about this item

    Keywords

    artificial intelligence; data; innovation; public procurement; ethics;
    All these keywords.

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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