2017 was not a good year for tech in business.
It’s not long since the industry was seen as a fresh-faced alternative to a venal financial sector. Tech entrepreneurs were admired for their energy and ingenuity. Facebook’s exhortation to ‘move fast and break things’ promised a future of freewheeling digital innovation. Google’s pledge not to ‘do evil’ was accepted as an expression of earnest idealism. And Twitter’s starring role in the Arab Spring and the Occupy protests showcased its potential as a revolutionary communications medium capable of facilitating a more open and just world.
Today the outline of the new world tech is shaping is becoming clearer. And it is not what many hoped for.
The year began with Facebook and Twitter caught in the fallout from Donald Trump’s election, accused of providing uncensored channels for political extremism. Uber was shaken by the resignation of Travis Kalanick for sexist conduct representative of a wider issue within the industry. The firm was also implicated in the rise of the precarious gig economy. Uber lost its licence to operate in London, and Amazon embarrassed by revelations of working conditions in its delivery centres. Innovations promising to further ‘disrupt’ delicate economic ecosystems, such as Bodega’s boast that its smart vending machines would make small stores obsolete, were condemned as insensitive during a time of growing insecurity.
Windows onto the world
Above all, 2017 was the year when the concentration of economic, political and cultural power in a handful of super corporations surfaced in public consciousness. Growing popular fascination with the possibilities offered by the radical technologies constructing the modern world – AI, machine learning, robotics, digital fabrication, the internet of things – was tempered by concern that their power to shape our lives is increasingly vested in a tech aristocracy: Alphabet, Amazon, Apple and Facebook in the West; Alibaba, Baidu, Tencent and Xiaomi in the East.
The giants are increasingly able to simply take over entire markets, to which they police access through the management of the digital spaces, or ‘platforms’, in which various configurations of customers, advertisers, service providers, producers and suppliers operate. These include advertising platforms (Google, Facebook) connecting advertisers and customers; cloud platforms (Amazon, Salesforce) providing hardware and software through which digital services are traded; product platforms (Spotify) turning traditional goods into subscription services; and lean platforms (Uber, Airbnb) offering apps putting drivers and house-owners in touch with potential riders and guests.
The platforms benefit from formidable network effects. We often have to put aside our doubts about Uber when we must urgently find a driver. Whatever our privacy concerns we need to use Facebook or LinkedIn to connect with friends and business colleagues. And the effectiveness of the platforms is further refined through analysis of the vast data generated by their use. If, as is often observed, data is the new oil, the platforms are the digital rigs that drill for it.
As they expand the platforms swallow rivals as well as data, with profound consequences for startup formation. For many founders and their investors the objective is not so much to build a sustainable business as to attract a lucrative takeover bid, a logical position when potential markets are closed off and innovations simply copied, as Facebook did last year in developing its own version of Snapchat’s Stories feature.
Big tech is increasingly able to exploit market dominance to mediate and monetise our everyday experience, offering customers panoramic windows onto the world. An order uttered to Amazon’s Echo, for example, sets in motion a vast fulfilment infrastructure – soon to include mobile warehouses, autonomous trucks and drone deliveries – that is optimised afresh with each new interaction. In the words of PayPal founder Peter Thiel, ’competition is for losers’.
China, perhaps, previews our future. There TenCent’s WeChat app filters the everyday, allowing users to manage money, pay bills, book flights, hail taxis, message friends, order food, shop, and book movie tickets. TenCent’s data, pooled with that culled by the other Asian tech giants, is allowing the state to develop a surveillance system that will rank the ‘trustworthiness’ of each citizen.
The issue of big tech with its big data has entered mainstream politics. Tech representatives are now regularly summoned before parliamentary committees. The government is monitoring working practices in the gig economy. Municipal authorities are flexing their regulatory muscles, in London against Uber, in San Francisco against Airbnb. There is increasing international scrutiny of Silicon Valley’s tax affairs. The EU Commission is testing its antitrust powers against Google. And there is a swelling current of radical thought that sees the platforms as natural monopolies like the railways, water and energy, ripe for public ownership. The disruptors, it seems, face the prospect of some rather serious disruption.
Opening up the platforms
So as we enter 2018 the tech industry is conflicted, its abiding faith in technology’s potential to make life better for all enmeshed in business mechanisms engineered to channel those gains to an elite.
Is it possible for it to break out of that bind, for tech innovators to reimagine themselves as social entrepreneurs? If the digital economy is evolving towards the platform, can the platforms be democratised – co-owned by those who work for them and those who use them? Imagine a taxi app owned by drivers and riders, or a digital room-sharing service run by hosts and guests. Such dispersal of ownership could secure better conditions for workers and the reinvestment of profit rather than its siphoning to distant venture capitalists. And, crucially, the user data they generate could be opened to more effective democratic oversight.
Such platforms already exist, in increasing numbers. Stocksy United, a stock image directory owned and governed by its employees and contributing photographers, was founded by former iStock executives concerned that licences were giving both artists and customers a poor deal. The German cooperative Fairmondo offers a digital marketplace selling fairtrade goods. RideAustin, established and owned by 5,000 drivers after Uber was banned from the city, is a model for the CabFair campaign for an app-based London taxi service. IndyCube is a British freelancer collective managing collaborative workspaces.
These and other initiatives inspired and are being guided by a ‘Platform Cooperativism’ movement exploring how cooperative principles first drawn up by Victorian progressives might be adapted to the digital age. Through events and websites such as platform.coop the project documents best practice, offers legal advice for employee-owned startups, and draws lessons from the formidable Silicon Valley infrastructure that has so effectively matched capital, coding talent and marketing services with aspiring entrepreneurs. The elements of a cooperative equivalent might include public investment banks, social venture funds, open source software, local authorities and universities.
Certainly, this or any alternative model for running a tech business faces a tough marketplace. Fairmondo, for example, offers two million items for sale against the 480 million available on Amazon. The tech giants have the marketing, legal and lobbying firepower to extend their dominance.
But the cooperative movement indicates one way by which the tech industry might take the initiative in shaping a future in which the fruits of innovation are shared more widely, a future that might otherwise be determined by politicians and the disenfranchised citizens they represent.