Digital Economy Dispatch #002

27th September 2020

In the Surveillance Economy Not Everything That Counts Can Be Counted

One of my lockdown activities has been to make dent on the growing pile of books and articles on digital transformation topics that I have been accumulating over the past few months on my desk. In the past 12 months there has been a tsunami of writing on topics from digital strategy and leadership through to digital business models and innovation. Each is filled with concepts, frameworks, processes, and playbooks promising new insights into the secrets of digital transformation. They are written by a wide collection of leading academics, former CEOs, successful entrepreneurs, and hardworking consultants trying to make a name for themselves in a crowded marketplace of analysts, journalists, futurologists, and commentators staking their claim in the digital landgrab. Top of the pile, staring back at me for over a year, has been Shoshana Zuboff’s “The Age of Surveillance Capitalism”. A widely read book that has won a bevvy of awards, Zuboff opens the book with a simple question: Are we all going to be working for a smart machine, or will we have smart people around the machine? From this simple starting point, she builds a significant and robust argument that we are in danger of sleepwalking towards the former without understanding the consequences of this path for business and society, and without challenging the role of Big Tech companies making huge revenues in the process. Described by Hugo Rifkind as “Das Kapital for the digital age”, the book examines how a handful of Big Tech companies have managed to dominate through the exploitation of personal data gathered primarily without the knowledge or consent of those involved. She argues strongly (and at length!) that it is an explicit strategic approach taken by these Big Tech firms to use the direct exchange of data for value (for example, when someone uses a search engine to look up the location of a grocery store) as the basis of a much more manipulative hidden agenda aimed at gathering and sharing of the indirect meta-data that surrounds that exchange (for example, the searcher’s location, the time of the search, actions before and after the search, and so on). While frequently portrayed as inconsequential unused secondary information, and even labelled as “data exhaust” by some people, Zuboff argues that amassing huge amounts of this additional data has become the focal point for a new form of economic exchange she labels as “surveillance capitalism”. A concept she defines variously, but perhaps most succinctly as “a new economic order that claims human experience as free raw material for hidden commercial practices of extraction, prediction, and sales”. Zuboff discusses many different concepts and ideas throughout the book. But for me she is at her strongest when shining a light on the strategic concepts that underlie the seemingly aimless gathering and use of large pools of data by platform companies such as Google, Amazon, Facebook, and the like. Significant is her discussion of how the initial goals and aims of these platforms has moved from supporting society by “democratizing information” toward not just selling our data back to us in new forms, but also commodifying that data to allow other agents (commercial and otherwise) to manipulate, coerce, and direct our behaviours to achieve their aims. Behind this lie 3 fundamental strategies exploited by Big Tech as a consequence of digitization:

• Economies of scale that allow vast amounts of information to be collected, analyzed, and merged as the raw material for pattern matching.

• Economies of scope which bring variety to the data by extending the reach of what is used by collecting data across a range of activities and by deepening the predictive detail in each activity.

• Economies of action that go beyond capturing, analyzing and predicting behaviour to drive interventions to shape behaviour and change outcomes.

 It is this combination of strategies, Zuboff believes, that moves the commercial ventures of Google, Apple, Amazon, and Facebook away from their initial information insights aimed at supporting human endeavours and into the murkier waters of exploitative activities that treat human behaviour as an exploitable commodity used as input for algorithms that predict and coerce future actions. For Zuboff these are the inevitable consequences of surveillance capitalism. There is no doubt that Zuboff’s work is a tour de force. At nearly 700 pages it raises so many important and challenging questions about the streaming of data from sensors all around us intent on mapping out behavioural contexts including our homes, bodies, and workplaces. It highlights how our reliance on predictive algorithms trained by large data sets is distorted and manipulated intentionally and unintentionally through bias, omissions, errors, and gaps. But most of all this book is designed to raise awareness of how Big Tech is able to sidestep scrutiny, regulation, and external audit in the name of freedom of information. Of particular relevance in the current environment, Zuboff highlights personal and societal trends that lead us to conclude that tracking and monitoring will be an essential part of our future. In the current global pandemic many countries have introduced ways to monitor individuals to understand behaviour such as physical status, location, interaction with others, and so on. Even through these solutions deliver obvious social benefits they have seen slow adoption due to widespread concern for the use of the data they gather. Such reactions are a consequence of experiences with numerous wearable devices and mobile apps used over the past few years to report on personal fitness, assess driving skills, determine current mental state, ensure adherence to medical routines, and much more. Social media channels are filled with reports of how such data has been shared and reused without consent of the data provider. Introduced under the guise of personalization and efficiency, Zuboff is at pains to challenge the inevitability that our behaviour must be viewed as a commodity that can be assessed, counted, traded, and manipulated at will by data gathering agencies that at best can be described as opportunist and at worst is described by Zuboff as predatory and driving us toward a new form of enslavement. She is most severe in her analysis and criticism of how Google has been using its position of power to collect and exploit data. In her view Google (and its parent company Alphabet) has actively sought to manipulate public perception of its role and influence in the surveillance economy with increasing pace and intensity. By 2016 Google had constructed facilities around the world housing over 2.5 million servers, supported by sophisticated analytical capabilities gathered through acquisition of several prominent AI companies (in fact, Wikipedia lists a total of 233 acquisitions in the past 20 years) and driven by recruitment of thousands of experienced AI researchers into its product and research labs (for example, there are over 2,000 people listed in Google Research’s people directory). Despite the rather dystopian view she paints, the important point Zuboff makes in this book is that the digital future is yet to be written. Through our collective voice we have the ability to shape how we want it to unfold, for the many or the few. This simple position is developed through a deep, complex set of arguments with a meandering narrative that at times I found to be brilliant, infuriating, thought provoking, and obsessive to the point of infatuation. It is a combination that makes it a compelling read for some, and an impossible confusion of ideas for others. The book closes by echoing a plea she makes in the first few pages that “If the digital world is to be our future, then it is we who must make it so”. This is a particularly appropriate battle cry for today, and for the turbocharged digitally enabled citizens coping with many weeks of shutdown, lockdown, and slowdown. But most of all, Zuboff’s work pulls us back from the digital brink to remind us of our humanity and that not everything that counts can be counted, tracked, stored, analyzed, and manipulated; and not everything that can be counted counts.

Digital Economy Tidbits

IBM Research's 5 in 5. 5 ways technology will change our lives within 5 years. Link.A recent release from IBM, this report looks at how "radically accelerating the process of discovery will enable our sustainable future". This provides a rallying cry for IBM to speed up innovation by 90% over the next 5 years.Nvidia's acquisition of Arm. Good for our digital future? Link.The announcement that Nvidia with by Arm brings together two tech giants at the core of the digital economy. This may be a great match for the 2 businesses involved. But it raises questions about the impact on digital skills in the UK. and the potential market dominance this creates.The Harvey Nash/KPMG CIO Survey 2020. Link.This study has taken place for 22 years looking at CIO attitudes, investments, and strategies. This year's study highlights that Covid-19 has caused one of the biggest surges in technology investment in history,