The problem with emerging technologies is more serious than you think

Erik P.M. Vermeulen
Mar 31 · 6 min read

The Facebook hearings in both the United States and Europe are still fresh in our minds. The realization that senior politicians and officials are so out of touch with the digital transformation came as something of a disappointment.

And yet, it is becoming more and more painful to see governments struggling with the evolution of technology and its social and economic effects. At least, this is my conclusion after several discussions with policymakers last week.

So, what happened?

I had an interesting visit to the United Nations. Inclusion was the main focus of the discussion. How can we encourage diversity and inclusion in the world of business and finance? How can we promote entrepreneurship and support micro-businesses, particularly in emerging markets?

There are numerous examples of how mobile phones, software code, and technology platforms have empowered the weaker parties, created more equality and helped solve some of the biggest challenges in the world. I wrote about this last week. And emerging technologies could be doing so much more when it comes to delivering social justice.

When I presented some examples at the UN, it spurred a lot of interest and discussion, but also many questions as well.

And this is where things got very complicated, very quickly.

What struck me was how quickly the role of new technologies was dismissed and “pre-digital” solutions were proposed. It was as if digital technologies didn’t exist. It was like stepping into a time machine and we had suddenly gone back twenty or thirty years.

Many of the participants in the discussion seemed to forget that they all had a mobile phone and were continually using it to send messages, make restaurant reservations, etc. Being connected, having more choice and convenience were apparently desirable features for all the participants.

But when it comes to recognizing the role of such technologies in delivering social justice to regions that have historically had economic and political difficulties, people became much more reticent.

The “two worlds”

It is clear to me that the exponential growth of technology has created a divide between the real digital world we are now already inhabiting and the world as generally seen by governments. The result? Governments are, very quickly, becoming less and less relevant.

And this is a problem. We are wasting “taxpayers” money designing policies that ignore the new digital reality.

More importantly, technology is “eating the world” and although this creates a plethora of new opportunities, it does create tremendous challenges that most likely require some form of government intervention. In a world where agility is essential, governments are just too sluggish and disconnected.

So, what is the problem?

Based on my experience, I notice four groups of people that are part of the policy discussion.

  • People who simply don’t know what is happening in the world. But, what’s worse, they don’t even realize that they don’t know that they are disconnected. They continue with the same old ideas and discussion, oblivious to the fast-changing world emerging around them.
  • People who understand that emerging technologies are transforming the world, but still resort to old economic and business models to make sense of these changes.
  • People who are tech-literate but focus too much on one technology (such as blockchain) without taking possible new developments and disruption into account. They are a great addition to the discussion, but with the risk of “high jacking” the debate.
  • People who are disconnected but somehow understand that they are disconnected. They realize that care has to be exercised before interfering in technological developments.

The last group may be the smartest group. They believe that it is better to “wait and see” how the market and the market players, such as businesses react and deal with the new emerging tech trends. They think that the market can do a better job because they just have better and more accurate information.

In the face of this “digital illiteracy,” what should we do? Is there a better alternative than allowing these four groups to dominate the policy discussion?

One option — often preferred by the tech companies themselves — is for government to give greater weight to those stakeholders that are driving technological innovation. Google’s move to set up an external ethics council to examine its developments in artificial intelligence is a recent example of this trend.

Outsourcing government

There is something to the idea that governments should “outsource” to companies the task of designing policies suitable for a digital age.

  • Disruption has become one of the main issues for any business. Markets are changing fast. New competitors enter the stage all the time. Business models must constantly change. I have discussed the market development “from products to services and platforms” already several times. Companies have to take emerging tech very seriously to remain relevant. They have greater access to information about the impact of technology and are closer to the action.
  • New digital technologies empower the employees of companies. The voice of employees has to be taken into account. In many cases, employees no longer see themselves as “cogs” in a corporate machine. They have become entrepreneurs and will step in when they don’t support a company’s policy.
  • But what’s perhaps more important is that consumers have become more critical. They aren’t just consumers anymore. They are an important stakeholder. This means that big corporations cannot just do what they want anymore. It is becoming very dangerous for them to abuse or continue to abuse their market power.

Some tech companies, however, appear to understand that the outsourcing model isn’t sustainable any longer. Yesterday, for example, Mark Zuckerberg argued for a more active role of government. Even if his timing and motives are suspicious, the change of rhetoric is striking.

So, what is the role of government in a digital age?

The complete delegation of policymaking and regulating to private companies would certainly lead to the capturing of policies and regulations by the established tech companies that try to keep things into the “family.”

Governments still have an essential role to play. But a bureaucracy-led approach to policymaking has had its time. A new and innovative (digital) approach has to be invented. One of the answers is co-creation and co-production. And here I don’t refer to consultation models in which the market is invited to provide input to policy and regulatory proposals.

Nor am I referring to so-called “sandboxes” in which innovation can be tested in a controlled environment.

I think it’s time for an entirely new approach.

Policy-decisions and regulations must become part of the technologies. We have to introduce “ecosystem thinking” when discussing regulation. Governments must work more closely with tech-companies to ensure all or most interests are protected.

And this reminds me of one of the remarks made by a government official recently:

This isn’t different for innovative policymaking or regulating. Governments must set smart boundaries for the amount of risk they are willing to take. And within these boundaries they must allow and encourage genuine innovation.

This doesn’t mean that within the boundaries a new “Wild West” is allowed to emerge. Rather, “within” the boundaries, it is all about trust. Trust that innovators must earn from all the stakeholders that are involved/affected by the new technology.

Government is one of the key stakeholders who are able to establish the rules of the “trust game.” These rules particularly see on transparency, disclosure, and having an open dialogue with the market.

Digital Diplomacy

Technology, digital, and innovation in government and foreign policy

Erik P.M. Vermeulen

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I write about how the digital world is changing the way we live, work and learn.

Digital Diplomacy

Technology, digital, and innovation in government and foreign policy