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Opinion: Why Utah will lead phase 2 of the AI revolution

Utah has adopted a regulatory ‘sandbox’ that allows entrepreneurs and businesses to try out new ideas that don’t fit neatly within established frameworks

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Eliza Anderson, Deseret News

When thinking about the exciting advancements in artificial intelligence, it’s easy to think of places like Silicon Valley, or perhaps Austin, Texas, as leading the charge. While those places may currently be driving most of the creation of this new technology, they aren’t necessarily well positioned to take advantage as it becomes more widely integrated into the consumer economy.

Instead, Utah stands out as the state best prepared to allow its residents to reap the benefits of such novel technological innovations. Because AI is so new, it’s not clear precisely how it can best be integrated into existing business models or industries, let alone how it might fit in with existing laws and regulations.

While this is certain to hinder AI’s commercial applications in most jurisdictions, Utah has adopted a regulatory “sandbox” that allows entrepreneurs and businesses to try out new ideas that don’t fit neatly within established frameworks. According to the Governor’s Office of Economic Opportunity, “The sandbox allows businesses to experiment with products, production methods, or services by temporarily waiving state law and allowing entrepreneurs to determine if customers value products that don’t fit within the state’s current regulatory framework.”

This isn’t to say there is no oversight. To participate, companies must submit an application for approval. They are then allowed to operate with regulatory impediments waived for a certain period of time. After the “testing” period is complete, the information gathered during the process is used to update or reform state laws and regulations. The policy has already worked well in the legal and financial technology industries, and the adoption of a universal regulatory sandbox ensures creative entrepreneurs interested in trying out new ideas with AI will have a mechanism to do so.

Despite not knowing the details of how AI could transform the workplace, early adopters are already demonstrating how it has helped them get more done faster. From quickly writing first drafts of interview questions for a recruiting firm to boosting writing productivity more generally, AI seems poised to increase the output of freelancers, small businesses and independent contractors working with multiple clients. And just as these new tools are becoming available and making it easier for individuals to accomplish more on their own, Utah is pioneering a way for independent contractors to access portable benefits, such as health insurance or disability insurance, that have long been exclusive to traditional full-time employment.

In most states, companies providing benefits to independent contractors would reclassify them as employees, thus eliminating their independence and flexibility. Utah’s recently adopted Portable Benefit Plan creates a legal pathway for businesses to offer voluntary benefits plans that independent, self-employed contractors can open on their own — without being reclassified as an employee. This innovative policy makes Utah a magnet for people who value the flexibility of being an independent contractor while also wanting access to benefits plans typically only available through traditional employment. As AI boosts productivity and makes it easier for independent contractors to thrive, this policy will allow Utah to take full advantage of motivated individuals seeking this kind of unique arrangement.

Finally, as AI technology automates a variety of routinized tasks currently performed by humans, the skills that employers find most valuable are likely to shift. Skills like teamwork, effective interpersonal communication and creativity — broadly characterized as “soft skills” — are likely to become even more important to success in an increasingly automated workplace. Unlike fact-based “hard skills,” these are not best fostered in a formal, top-down educational setting. Instead, these skills are most effectively developed in childhood through unsupervised, informal free play, often with peer groups of mixed ages.

Here again, Utah is leading the way. In 2018, Utah adopted the first-ever law protecting parents who choose to give their children a reasonable amount of independence to play and learn these important skills — without fear that local authorities will accuse them of neglect or child endangerment. Since then, six more states have followed suit in adopting “Reasonable Childhood Independence Laws” that protect parents who allow their kids to walk to or from school, play in a nearby park or even walk around the neighborhood by themselves. Fostering an environment in which kids can learn and play free from constant adult interference is a key component in allowing them to build the skills most needed to succeed in a quickly changing labor market.

The potential of AI to unlock new opportunities and innovations is vast. From flexible regulatory frameworks to skill development, Utah is leading the way in preparing for a bright and dynamic future of technological change. Other states should follow their example if they want to successfully compete in the economy of tomorrow.

Ben Wilterdink is the director of programs at the Archbridge Institute, a Washington-based think tank focused on economic mobility.