The tech industry is facing something of a crisis as Facebook has become embroiled in the Cambridge Analytica data breach and as self-driving cars begin making fatal errors.
Handled well, these issues will be just a mid-course correction, but they do pose potentially existential threats for Facebook FB, -1.34% , Alphabet GOOGL, -2.20% and other tech leaders if they fail to adopt new standards of privacy, ethics, and disclosure.
I do not believe that the Facebook issues in any way compromised the 2016 U.S. presidential election. It’s unclear whether Cambridge Analytica did much, if anything, for the Trump campaign. The efforts of the Russian troll operation were simply on too small a scale and occurred mostly after the election, or too far in advance of it, to be anything but an effort to increase existing divisions among Americans. Unfortunately, the messages they sent out were the same as anyone could find 24/7 on numerous cable channels. America has become more fractious all on its own.
As I warn in my book “Microtrends Squared,” the elites of our society — those with the highest education and income — are becoming far more susceptible to adopting talking points from TV and newspaper columnists than fully understanding the facts behind issues.
These “Impressionable Elites” are far removed from the actual problems of daily life, such as obtaining health insurance, and are easily swayed by narratives and stories — they are the most believing of the Trump-Russia narrative, for example, and you can see, increasingly, how the financial markets are ruled less by the individual earnings of companies and more by storylines that often turn out to be completely false. Just two years ago, for example, financial markets were roiled by a belief that a China economic slowdown would take down the entire global economy — only there was no slowdown.
Many people seem to think that there is some kind of voodoo targeting that can magically and secretly change the minds of consumers or swing voters, much like the Force in “Star Wars”; in fact changing those minds is the result of massive campaigns operating right out in the open. Facebook and others charge so much for granular targeting that few advertisers are able to use them as their primary communications channel.
But the exposure given to these issues has awakened users as to how commercialized their likes and dislikes have become. There are no free apps, no free digital assistants and no free searches. Even texts and emails are scanned and read for content on your interests.
Every digital activity is now monetized as data has become the new oil, and companies are drilling for it everywhere, and most of the time consumers are unaware that they are paying for these services with their privacy. To make it a fair bargain, new standards of disclosure in plain English need to be enacted so consumers understand what they are giving up and so companies can compete on privacy and security — which is only possible if consumers understand the differences.
Perhaps the most important big issues in technology involve another microtrend — relationships with a bot — how people are now relating to technology as though assistants like Amazon Echo’s AMZN, -3.20% Alexa are people. Not only are these devices AI-based code, but the purpose is often to sell you things as opposed to helping you.
Alexa is not a “he” or a “she” but an “it.” Ask Alexa if it is a he or a she, and the response is that “I am in female character” — a slimy, ethically challenged response that attempts to slide over the fact you are talking to interactive code hoping you will order more paper towels. Because we are in early stages of bots, these issues are in early stages, but as the drive to increase monetization of their services rises, so will the crossing of ethical lines if they are not put under clear rules of the road.
Another area of concern is the huge focus now by tech companies on driverless cars. I do not think that we will have true driverless cars for another 25- to 40 years. While autopilot on highways is a task that can reasonably be accomplished, swerving to avoid sudden objects, working in snow and fog, understanding all of the unexpected events that occur on the road to the standard of a fender-bender every 100,000 miles is, in my experience, far removed from today’s technical capabilities. These recent accidents are revealing just how difficult the tasks are — they are happening not after millions of miles, but just thousands of miles being driven.
Despite these issues facing big tech, the overall future of technology remains bright. The digital layer that can disrupt and reform many industries is bringing luxury for less to consumers in every area from personal drivers to digital tailors and even lower-cost private jet flights. The market for enhancing human senses like better hearing and sight has not even been scratched, and contrary to expectations, the personal service industry has been taking off to replace the manufacturing sector, surging to 56% of the economy from 40% since 1980, to create a record number of jobs.
While the idea of tech’s impact on the election has been overblown for partisan purposes, the issues of privacy, ethics, and overconfidence that have bubbled to the surface will require a major reset in how big tech treats its consumers — or Washington will eventually impose it.
Mark Penn is the author of Microtrends Squared: The New Small Forces Driving the Big Disruptions Today (with Meredith Fineman), published by Simon and Schuster. He served as both the former chief strategy officer of Microsoft and was chief strategist to presidential campaigns of Bill Clinton in 1996 and Hillary Clinton in 2008.