Thomas H. Davenport and Vivek Katyal
MIT Sloan Management Review Blog
Originally published
Here is an excerpt:
Leaders should ask themselves whether the AI applications they use treat all groups equally. Unfortunately, some AI applications, including machine learning algorithms, put certain groups at a disadvantage. This issue, called algorithmic bias, has been identified in diverse contexts, including judicial sentencing, credit scoring, education curriculum design, and hiring decisions. Even when the creators of an algorithm have not intended any bias or discrimination, they and their companies have an obligation to try to identify and prevent such problems and to correct them upon discovery.
Ad targeting in digital marketing, for example, uses machine learning to make many rapid decisions about what ad is shown to which consumer. Most companies don’t even know how the algorithms work, and the cost of an inappropriately targeted ad is typically only a few cents. However, some algorithms have been found to target high-paying job ads more to men, and others target ads for bail bondsmen to people with names more commonly held by African Americans. The ethical and reputational costs of biased ad-targeting algorithms, in such cases, can potentially be very high.
Of course, bias isn’t a new problem. Companies using traditional decision-making processes have made these judgment errors, and algorithms created by humans are sometimes biased as well. But AI applications, which can create and apply models much faster than traditional analytics, are more likely to exacerbate the issue. The problem becomes even more complex when black box AI approaches make interpreting or explaining the model’s logic difficult or impossible. While full transparency of models can help, leaders who consider their algorithms a competitive asset will quite likely resist sharing them.
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