Revolutionary Measures

Why technology companies have to play by different rules now

In the 1970s and 1980s the business world was dominated by big oil companies, with energy giants becoming the largest corporations in terms of market capitalisation. These were followed by banks and financial services in the 1990s and early 2000s. All of this has changed – the world’s five largest public companies are now Apple, Google, Microsoft, Amazon and Facebook, with upstarts such as Uber leading the way when it comes to unlisted businesses.

pexels-photo-239898

As they’ve grown these tech giants have expanded dramatically in what they do and the range of services they offer, demonstrated recently by Amazon buying offline upmarket grocery retailer Whole Foods. Essentially they’ve gone from being niche players, albeit in particular sectors such as search or retailing, to offering a panoply of interconnected services that constantly affect our daily lives – and in many markets they are essentially a monopoly, due to the power of network effects.

Much of what they do is invisible to the consumers that use their services – for example the majority of people don’t question why they are served particular search results, ads or news on Google or Facebook. Hence this week’s record $2.7bn fine imposed by the EU on Google for promoting its shopping comparison service to the top of search results.

Is fast too fast?
They’ve also often operated independently of existing rules, working to the Silicon Valley mantra “move fast and break things”. This has driven a huge amount of innovation, but has also led to behaviour that many find either reprehensible or even illegal. In 2014 Facebook’s UK operation paid considerably less corporation tax than my two person PR consultancy, for example.

Uber is a perfect case in point, with many countries banning its operations as its drivers don’t meet local taxi licensing regulations, set up to protect the public. Add in ongoing scandals around sexual harassment that have led to the departure of CEO Travis Kalanick and the overriding impression is of a company culture that focused on aggressive expansion at the expense of its people or the wider world. And Uber isn’t alone – the low number of Silicon Valley founders and VCs that are female or from ethnic minorities has raised eyebrows about the ethos behind the world’s largest tech firms.

Why does this matter now? Simply that the power of tech firms has increased dramatically at the same time as the complexity of their operations has deepened. At the same time, many people around the world feel left behind by the pace of technology and digital disruption, whether it is in the work or home lives, leading to a potential polarisation between the tech savvy and the tech illiterate. These worries haven’t driven people to populist politicians like Donald Trump on their own, but have added to a mood of not being in control amongst many citizens around the world.

Reading the papers, the number of bad things happening on the internet, from simple fraud to terrorist plotting, seems to be increasing exponentially, although whether this is true or is just the result of better reporting is a matter for debate. Whatever the cause it has led to calls for greater regulation and control by national governments over cyberspace.

Altogether this means that tech companies are facing an existential threat. While they are delivering record profits and driving ever-greater innovation they are now central to everyone’s lives and are therefore under ever increasing scrutiny, from governments and the public. Hence the call from Reid Hoffman, founder of LinkedIn for the tech community to sign a Decency Pledge, looking to stamp out sexist behaviour and sexual harassment, particularly amongst venture capitalists in relation to the founders of businesses that they fund. It is a start, but I think any Decency Pledge needs to go a lot further and cover all behaviour, and how it is communicated. Tech giants can’t hide behind complexity any more – they need to communicate openly and operate transparently if they want to win back public trust. Time for the old Google motto “Do no evil” to be resurrected…………

 

Advertisements

June 28, 2017 - Posted by | Creative, Marketing, PR | , , , , , , , , , , , ,

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: