The AI dilemma: Can social enterprises innovate without compromising their values?
David Lyons, 13th February 2026

As AI technology continues to evolve, social entrepreneurs face a critical question: can they leverage AI to enhance their effectiveness without betraying their core values? While AI promises improved efficiency, concerns over its social and environmental impact also loom large.

During the Social Enterprise World Forum 2025 in Taipei, a hub for AI advancements, experts gathered to explore ethical AI applications within social enterprises. Pioneers Post collaborated with James Gauci, founder of the social enterprise AI consultancy Cadent, to discuss how technology can be harnessed for greater social impact.

Audrey Tang, former Taiwanese minister of digital affairs, emphasized the importance of small-scale, open-source AI models. She argued these tools align more closely with the ethical principles of social enterprises. Tang pointed out that instead of merely accelerating or halting AI development, the focus should be on guiding its direction. “We, the people, are already the super intelligence we’re looking for. All we need is to unlock the coordination between us,” she asserted.

Several case studies highlight practical AI applications:

• Ayesha Zulfiqar’s Pakistani enterprise, Bioniks, uses AI to create innovative prosthetic limbs that significantly improve quality of life for users.
• Nikoline Arns advocates for small-scale AI models designed for specific tasks, which promote ethical use and community engagement.
• Shaun Cumming stresses the importance of data sovereignty to empower marginalized groups.
• Ambika Sangaran encourages collaborations between social entrepreneurs and the ethical tech sector to drive impactful solutions.

Ultimately, the challenge lies in navigating AI’s potential while upholding the mission to serve both people and the planet.

Sunderland City Council is pioneering the responsible use of artificial intelligence (AI) by establishing a robust data foundation that transitions insight into action. In collaboration with Boldyn Networks and Microsoft, the city has designed a smart city data platform aimed at revolutionizing data collection, analysis, and visualization.

This initiative has already yielded practical applications, such as city planning and events dashboards that analyze footfall and transportation patterns. Additionally, environmental hotspot mapping allows targeted interventions, while community insights inform support strategies. Digital exclusion modeling helps guide connectivity programs, and social care data integration forecasts demand, improving overall outcomes.

The measurable social value created through this approach is evident. For instance, Sunderland identified eligible pupils for Free School Meals and engaged tens of thousands of residents in digital inclusion initiatives through well-structured Digital Health Hubs. The webinar will also delve into how predictive analytics and simulations are being harnessed to prepare the city for future challenges.

Key topics include the establishment of a comprehensive city-wide data foundation for advanced analytics, the secure utilization of Microsoft Fabric, Azure Data Services, and OpenAI Cognitive Services, transitioning from reactive to proactive decision-making, and the focus on real-world applications in planning, environment, communities, digital inclusion, and social care.

For city leaders and practitioners, this webinar provides an insightful look at fostering strong data foundations, leveraging Microsoft’s cloud and AI capabilities to transform ambitions into actionable results, thus preparing cities for responsible, scalable AI implementation that prioritizes community welfare.

Transportation services are a crucial measure of local government effectiveness, highlighted by San Jose, California’s chief innovation officer and budget director, Stephen Caines. In response to traffic congestion, officials have implemented an AI-driven traffic signal system to optimize public transit bus movement through busy intersections.

With a population nearing 1 million across 182 square miles, transportation is a key concern for many residents. To address this, San Jose has expanded the AI-integrated traffic signal system to cover all 24 bus routes, using real-time traffic data to prioritize green lights for buses. This initiative builds on a successful 2023 pilot program, which achieved a 50% reduction in delays at red lights and improved on-time performance.

The system employs transponder devices on buses that communicate with traffic signals, enabling adaptive light changes. As a result, the city has seen a 20% increase in bus speeds since the rollout. This efficient transit system aims to minimize wait times and encourage the use of public transportation, contributing to environmental benefits such as reduced carbon emissions and improved air quality.

Furthermore, the initiative supports San Jose’s goal to be a “transit first city,” prioritizing buses and high-occupancy vehicles over single-occupant cars. The AI system also enhances operational insight, allowing city officials to identify disruptions before citizens report issues, thus streamlining service improvements.

San Jose is actively integrating AI across various municipal operations, including permitting systems and waste management. Mayor Matt Mahan emphasized that effective public services, like reliable bus routes, are essential indicators of a city's governance, and San Jose aims to deliver efficient solutions that genuinely benefit its community.

Artificial intelligence (AI) is increasingly being integrated into local government operations, yielding significant benefits. Various applications include customer service desks using translation tools, clerks’ offices employing Large Language Models (LLMs) to summarize documents, and public works teams utilizing predictive analytics for asset assessments. These innovations necessitate a critical question for city governments: Who will oversee the cross-departmental integration of AI technologies?

In response, some cities are establishing dedicated AI leadership roles, referred to as Chief AI Officers. While these positions are growing more common at state and federal levels, local adoption varies. Some municipalities have created formal executive roles, while others have integrated AI oversight into existing IT positions or formed temporary working groups.

Cities like Seattle and Louisville are leading the way by appointing Chief AI Officers who coordinate AI efforts across departments. Seattle welcomed Lisa Qian as its first City AI Officer in late 2025, tasked with overseeing AI governance, technical infrastructure, and workforce training. This role aims to ensure that AI implementation is responsible and aligned with public service goals. Seattle also set a precedent with its Generative AI Policy and comprehensive AI plan.

Louisville appointed Pamela McKnight as its Chief AI Officer, focusing on enterprise-wide coordination. The city quickly launched its first AI pilot, targeting bottlenecks in the permitting and development process. This project will utilize AI to identify delays based on existing codes and is expected to yield insights that will be shared publicly.

Most cities currently lack dedicated AI leaders but are concentrating on essential tasks such as developing AI policies and enhancing data governance. Before nominating an AI lead, city officials should clarify their objectives, assess the integration of this role within existing structures, and establish policies that uphold public trust and align with city values.

Next steps for city leaders include exploring AI governance policies in the City AI Governance Dashboard and examining ethical considerations through the NLC AI Toolkit.