I recently went to an industry event organised by InnovationAus.com which was unique in several respects.
First of all, there was hardly any techno talk. The presentations and discussion took place on a far more strategic level in relation to the effects of technology – in particular AI and big data – on our society and how this needs to be developed so that technology supports human development and prosperity for all.
While there was widespread acknowledgement of the positive contribution technology has made within our capitalistic market structure to societies and economies around the globe at the conference it was agreed that it is important to ensure that the right systems and structures are in place to ensure that this trend continues. This doesn’t happen automatically or in isolation and there are some serious concerns about the current systems that are beginning to fail to deliver the right outcomes. In recent times the current capitalistic system has allowed the super-rich to benefit from this, to the detriment of the other 99% of the population. As one of the speakers mentioned, the current rules favour the winners while socialising the losses.
But it is good to see that several of the rich hi-tech people are now asking serious questions regarding the potentially negative effects of technology on our society due to a lack of appropriate safeguards and regulations. Interestingly, during his video address zillionaire Nick Hanauer (one of first investors in Amazon) argued for more equality, higher wages and higher taxes for the super-rich. Capitalists are now involved in discussions they never thought they would have regarding ‘universal income’ – aimed at protecting the losers in economic and social disruption resulting from technological innovations, as well as curbing populism. They understand that in failing to address these issues, nationalistic and populist policies will undermine prosperity and the innovations that are desperately needed to address the social and economic challenges with are now global in nature.
The current neo-liberal capitalistic system is based entirely on the concept of homo economicus, and it is clear that this alone – aka a purely market-driven economy – is no longer delivering the right outcomes for our society to prosper. Homo economicus advocates argue that human selfishness regulates the market and that this results in prosperity for all; however it has become clear that this selfishness is not the solution but the cause of our current socio-economic and political problems. Scientific evidence indicates that people clearly are not simply rational beings. To the contrary it has been our social nature, based on collaboration and sharing that has brought us where we are now.
If the other human elements are not taken into account in our society, inequality will follow and this will lead to people no longer trusting the economic system and the political structure that governs it. This then makes the way clear for populist policies and nationalism, which will undermine overall prosperity and eventually – if not corrected – lead to economic decline that will in turn also not favour those backing neo-liberal capitalism.
Nick indicated that under this neo-liberal regime he and a few others (the so called 1%) were able to become filthy rich in a totally legal way. At the same time even he argued – as a true capitalist – that only government-enforced regulations would create a more equal society, which in turn would create a more favourable political regime in which prosperity and innovation will continue to increase.
Looking at future developments in technology, AI and big data will create a further level of disruption, this time among middle- and upper-class workers. Automation this time will focus more on levels of administration, legal, financial and insurance services, as well as healthcare and other sectors. This will no doubt lead to a call for more government interference as it will disenfranchise large numbers of people currently employed in these sectors. And if we continue with the current neo-liberal system this will be followed by more unrest, populism, nationalism and a further decline in a just and trustworthy society. While disruption is unavoidable we do need to avoid the negative effects of it in order to protect our way of life, our democracy and also innovation.
The current situation in America shows that change is not just creating economic disenfranchisement; unemployment there is at an all-time low, yet populism is high. There is a clear mismatch between the jobs that are lost due to new technologies and the skills necessary for the new jobs that are needed. New York and San Francisco alone each have over a million job vacancies, with another half a million in Los Angeles. The most important skills that are now needed include social skills, communication skills and business skills. Next are skills in technology, especially software, cybersecurity and data management/analytics. These skills are obviously not on offer from those who are unemployed or under-employed and to address this several States have embarked on re-educating and training schemes.
As Tom Switzer (Executive Director, The Centre for Independent Studies) said, while capitalism has delivered enormous social and economic benefits, we have realised over the last few decades that it is a double-edged sword. In a deregulated environment it has created a situation where financial tools can be used to destroy capital and bankrupt countries for the benefit of the few, and a company making products that cause cancer are seen to be of equal value to a company that develop cures for cancer.
Such systems are plainly wrong, but as also Nick argued, it is up to governments to create the right regulations to deliver social and economic outcomes that are for the good for the common good, not just for those few who can make enormous profits from destructive development, simply because that is allowed under the current system. An economic system largely driven by shareholders value has become the core of the current socio-economic problem.
Another unique element of this conference was the participation of a pastor, Reverend Tim Costello AO (Chief Advocate World Vision). From first-hand experience he talked about the enormous benefits of new technologies in the work he does in disaster relief and in his social work activities in the developing world (an experience I can personally relate to based on my work with the UN Broadband Commission for Digital Development).
Furthermore, Tim argued that better knowledge – which can be obtained and spread wider and faster with the assistance of technology – is the basis for the creation of better societies. It is the only long-term solution for the eradication of poverty and the improvement of social welfare and healthcare.
He argued that in order for technologies such as AI and big data to be seen as positive developments for our societies these technologies should first be used to deliver social benefits. This would build trust and would thus create a much better foundation to take these developments further.
Technology has an international reach and makes the world smaller. More technology means that more international trust is needed. Nationalism works against this and Tim highlighted the dangers of such developments in America, Russia and Turkey. He also said ‘Imagine the international outcry if Angela Merkel were to say let’s make Germany great again.’
The example of China was also mentioned. Here we have a country that is rapidly becoming the leader in AI and big data innovation; however with little government respect for privacy it will be hard for this country to export its innovations. Current issues of concern are the development of a social code for its people and potential interferences in technologies carried out by Chinese companies. Trust is essential in the development of AI and big data.
In America, on the other hand, privacy issues are largely left to private companies operating in a free market. This has led to the commercialisation of personal information, producing a decline in trust in leading organisations such as Google, Facebook, Apple and Amazon. Europe is much stronger on privacy, but it is poor on its implementation.
It was acknowledged that technologies that are used in such destructive ways are also used in a positive way. Social media brought us fake news but it also supports grassroots democratic development. It gives ordinary people power they have never had before – smart cities, smart energy, e-health and so on stand across from cybercrime, invasions of privacy and identity theft.
Key elements in relation to the positive developments in technology and innovation are leadership based on a broad level of values, morals, justice and collaboration. This would bring much-needed trust back into our society. Looking back to the time before the greedy 1980s this was largely how society functioned; and it is still the system that works at the grassroots level – for example in local communities and cities.
As I have argued for many years in my smart city work, we should create more political and financial power at local levels to counteract the current crises at national political levels.
Only through collaboration can we create successful societies, and collaboration will only happen when the society is based on morals and justice, supplying the trust needed for it to work. Looking back in history, societies that harnessed these principles have been the most successful and those which failed to continue in that way eventually collapsed.
Bringing this back again to technology, such a society will use technical for the common good and this will create trust in technology and such societies will confidently embrace innovation and this allow us to maintain prosperity.
Claire McFarland – Director of Innovation and Entrepreneurship, US Studies Centre – stated that as mentioned above unemployment in the USA is at a near all-time low, populism and nationalism is at a high, clearly indicating that its current political problems are not simply based on the economy. Cultural (religion, women’s rights, gender issues) and moral issues are equally significant here. The mid-term election could well lead to a further deterioration of its political system.
After all of these presentations and discussions a sobering question was raised. Should we proceed with innovation in for example AI and big data without the proper political, social and economic systems in place – systems that should be aimed at providing the right outcomes for all rather than just for the happy few or the super-rich? At a minimum the industry representatives at this event agreed that much more work is needed on the non-technical issues if AI and big data are going to be able to deliver a positive contribution to prosperity for all.
Full marks to InnovationAus.com for organising this event. I am proud to be part of an industry which accepts its social responsibilities in this way, and which is willing and able to put these issues on the political agenda. It was clearly stated that if these structures are not in place very serious political and economic problems could arise.
Solutions will require public/private collaboration and coordination and not, as is currently the case, a splitting of tasks between a whole variety of bureaucratic organisations. National governments need to accept that they are no longer in charge – that they are just a node, albeit at an important one, in a complex international society.
The positive potential of technological innovation is enormous and it is up to us to make it so.
Paul Budde