Tackling the techlash - it's time to "recover the soil" in the digital economy

Profile picture for user slauchlan By Stuart Lauchlan January 21, 2019
Summary:
The Digital Economy needs a new governance model to tackle erosion of privacy and trust, according to a World Economic Forum discussion.
EileenDonahoe
Eileen Donahoe

Late last year the Oxford English Dictionary produced its traditional list of ‘words of the year’. On that list was techlash, defined as :

A strong and widespread negative reaction to the growing power and influence of large technology companies, particularly those based in Silicon Valley.

Flash forward to January 2019 and there are those who already regard the term as somewhat old hat. Among them is Eileen Donahoe, Executive Director at the Stanford University Global Digital Policy Incubator, who states:

For us, it’s already a cliche that there’s been a techlash. I live in Silicon Valley and it’s an old word there.

That’s not to undermine the importance of the concept of such a backlash. For her part Donahoe points to something wider that she detects:

A dramatic swing of the pendulum from optimism to pessimism about the effects of digital technology on society and people. We’ve seen an erosion of trust among citizens that they will be the beneficiaries of digital technology. I would also highlight the erosion of confidence among governments, especially democratically-oriented ones, that they can live up to their promise and obligations to simultaneously protect the liberty and rights of citizens, national security and protect democratic process, all while advancing economic growth.

That’s a pretty wide-reaching and downbeat analysis of the state of the world, particularly when delivered as part of a session at the World Economic Forum’s Annual Meeting on The Strategic Outlook for the Digital Economy. Donahoe backs up her thesis by breaking down her statement into two main areas of societal discontent, beginning with the topic of economic inclusion:

People don’t have confidence that they will partake in the economic upsides and that the benefits and growth are going into fewer and fewer hands. The wealth distribution challenges that we had pre-digital, we will now have on steroids. The second part of this is labor issues and the massive concern about labor displacement. Even people who have confidence that in the long game we will get there and find a way of machine/human interaction, everyone senses that it’s short game ugly.

The second big crisis is around trust, which Donahoe breaks down into three dimensions taking in politics, civil liberties, human rights and democracy camp, but starting from the premise of the erosion of privacy:

Everyone has woken up to the idea that the digitization of society has gargantuan consequences for society. Finally people are understanding that privacy matters for the exercise of liberty. The simple idea is that if everything you do and say is tracked and monitored by governments and private sector companies, then it will have a chilling effect on what you feel free to say and where you feel free to go.

The second concern is that the digitization of society has made us systemically insecure. There is a great sense of vulnerability. Neither governments nor private sector know how to protect our data, our infrastructure or our identity. The final concern is the issue of weaponization of cross-border weaponization of information, eroding the ability of citizens to have their say in the democratic process and governments are confused about how to protect.

New world order

What’s needed now, according to Donahoe, is effectively a new world order, basically because the current one dating back to the 1940s isn’t fit for purpose in a digital age:

We need new governance models. This is the theme of a whole new governance architecture. Obviously our globalized, digitized environment is deeply challenging to the post World War II world order with its simple concept of nation states surrounded by territorial borders. We need to move beyond that. That’s why we’ve seen such a shift to the private sector which has really taken on a lot of governance responsibility. It owns and operates much of the critical internet infrastructure for civilians. [Private sector firms] set the parameters for access to information on their platforms. We need to expand beyond the concept that they’re accountable to consumers. They’re accountable for the effects of their technologies on the wider society. A big part of that accountability is a governance model that brings in citizens, civil society and other stakeholders. So instead of relying on government or only the private sector, you have to bring civil society and citizens and it’s got to be multi-stakeholder.

Others in the session at WEF were less downbeat, but conceded the need for a more human-centric approach to what is being called Globalization 4.0. Abidali Needmuchwala, CEO Wipro, made the point that the so-called techlash has been seen before elsewhere:

Ten years ago we were talking about the financial services industry having undergone the equivalent of techlash. We need to be more proactive and learn to deal with and address that narrative so that it doesn’t all become techlash and the ill effects of technology rather than the benefits.

For Wipro, that means adopting a philosophy of ‘localize to globalize’, he explained, adding that such a mantra helps to build a more inclusive economy:

As we globalize we recruit locally across the globe. Today in the US, we would hire about as many people as we historically would have hired in India. We can get all the STEM skills that we need from the colleges and campuses out there. That means that businesses need to have the ability to assimilate cultures. For the first time last year, I appointed a Chief Culture Officer who can handle this globalization with a higher level of inclusivity. We’ve started a program called Culture Works which just helps to sensitize people to be able to work together across diverse cultures from around the world.

Alongside this, there’s a need to get it right in this particular disruptive revolution, added Needmuchwala:

One of the things we learned from Globalization 3.0 is that it created disparity. There was a level of anxiety and angst coming through the political system, coming from the socio-economic system. 4.0 needs to be much more sustainable. Apart from being much more localized while globalized, we need to make sure that we provide opportunities to people to counter the disparities that Globalization 3.0 had created. There is stuff where there could be a much more positive narrative around the societal benefits of Globalization 4.0 alongside the technology.

The ‘get the positive messages out there’ idea was one echoed by Ken Hu, Deputy Chairman Huawei, who said:

For any technological innovation in our business operations, they will only be meaningful when they help make people’s lives better…As technology providers, we do have the opportunity to identify the challenges in society and the capability to use our technologies to solve these problems.

To illustrate his point, he recalled an anecdote from his own childhood in China:

When I was a little boy, I had a wish. I wanted to eat rice every day. That was impossible back then in China. Why? Because production of rice in China was very limited. My family had four people in it and we were only permitted to buy 2kg of rice per month. So we were only able to eat rice every weekend. Today when I tell that story to my kids, it’s pretty hard for them to understand, but for me and my parents it’s a pretty unforgettable experience.

Fortunately the situation has greatly changed…farmers are using sensors and the IoT and Big Data analytics to recover soil with too much salt for rice growing. That’s soil they couldn’t use before. In China, we’ll be able to recover unusable soil by 5%. China’s a big country. We’ll be able to provide sufficient food for 80 million people in our country.

And that’s a useful metaphor for the digital sector, he suggested, a sector that has been tainted by the privacy scandals of recent times:

We need to recover the soil.

My take

A very interesting opening session at Davos that was a curious combination of plugging technology - 5G is going to be the (latest) silver bullet apparently and will be mainstream by the time of next year’s WEF gathering - and broadening out to wider societal and economic issues. Donahoe’s analysis was a useful scene setter for a lot of issues that are likely to come under closer scrutiny over the course of the week. One other thing of note. For all the discussion of trust and privacy, no-one once used the F-word. It’s unlikely that Facebook will remain the unnamed elephant in the room for much longer.