AI literacy has become increasingly important, especially since the EU AI Act took effect on August 1, 2024, but its provisions, including the AI literacy requirement, began to apply on February 2, 2025. This Act mandates that all European organizations that use AI in their operations must properly train their staff on AI systems to ensure a sufficient level of understanding.
But why should AI literacy matter to your business, and what steps should you take to ensure you’re ready for it?
What is AI Literacy?
First, we need to understand what AI literacy is. It refers to the ability to understand, evaluate and effectively interact with AI technologies. It involves not only knowing how to use AI tools, but to assess their ethical issues and societal impact.
AI literacy allows individuals to recognize AI in everyday applications, comprehend its concepts, use AI tools efficiently and evaluate their influence and limitations. To ensure a safe, ethical, and transparent use of Artificial Intelligence, it is crucial to encourage AI literacy practices across the entire organization.
Why Should Companies Care about AI Literacy?
Besides being a legal requirement, AI literacy has several advantages for your business:
1. Competitive Advantage
Adopting AI can give businesses a competitive edge. Employees with a strong understanding of AI can leverage its capabilities to innovate, streamline processes, and boost productivity. Additionally, encouraging AI learning can empower employees, helping them improve job satisfaction, and reduce stress. This approach not only prepares your team for future challenges but also drives workforce development and operational efficiency.
2. Ethical & Regulatory Compliance
The EU AI Act focuses on the responsible use of AI systems, making certain they do not violate fundamental rights. By promoting AI literacy, companies can ensure their AI use aligns with ethical guidelines and regulatory requirements. This is crucial for avoiding legal risks, preventing financial losses, and maintaining a strong reputation.
Consequences of Not Having AI Literacy
Failing to promote AI literacy and comply with the EU AI Act can lead to serious repercussions for your business.
1. Financial & Legal Penalties
Even though heavy fines for noncompliance won’t be applied until August 2, 2025, they can amount up to 35 million or 7% of a business’s annual turnover. On top of that, failing to meet AI standards can result in legal risks, restrictions on the use of your AI systems, or in the worst case scenario, the requirement to recall or remove AI systems altogether.
2. Reputational Damage
Customer loyalty and brand value may suffer if AI decisions are made without sufficient level of literacy which may affect the trust in your business, especially if they are seen as unethical or biased.
3. Missed Opportunities
Without AI literacy, your organization may fail to take advantage of AI’s full potential, leaving you at a competitive disadvantage. Not to mention that a lack of technical knowledge could also delay or lead to errors in projects.
4. Increased Exposure to Risks
Lack of AI literacy can make your business vulnerable to issues like data protection problems, bias, and security gaps. It also makes it harder to comply with parts of the EU AI Act, such as conducting risk assessments for high-risk AI systems.
How Can Your Business Take Action?
1. Educate your Employees
AI literacy isn’t just for the IT staff. Every employee should understand the basics of AI. Certainly you don’t need to turn everyone into an AI expert, but promoting awareness on how AI impacts their roles and business is essential to make informed decisions.
AI training should be an ongoing part of your company’s learning and development efforts, rather than a one time event. Consider integrating AI education into your company’s learning programs and providing continuous learning opportunities to support the informed deployment of AI technologies.
This might seem like a lot of work but at DataNorth, we provide a range of services to address your AI literacy needs, including AI workshops and webinars. We offer customizable solutions to best fit your business.
2. Stay Updated on AI Regulations
With the EU AI Act now in force, staying informed about the latest rules and regulations is necessary. Dedicate some time to track these changes, ensuring your company follows the rules and avoids costly mistakes. You can do so by signing up to our newsletter and following us on LinkedIn for the latest news!
