Once the banks were too big to fail; now the digital giants might be too big to control.
A few years ago, in the wake of the financial crisis, I wrote an article arguing that we needed to develop a strong framework of values if we were to see a balanced and prosperous business world with modern business ethics. Now I’m writing again about values because I believe that another crisis could emerge in the digital economy, and this time we should have a dialogue on values and business ethics before the situation becomes too challenging.
A proper code of values must be embedded into all areas of the digital economy. As I’ve said before, values define and guide our behavior and shape the collective business ethics of firms. From the beginning, a main goal of creating a strong digital economy has been to connect and engage us. Without a framework of values, however, users of the digital economy are becoming more and more disconnected and disengaged, and even distrustful.
Nowadays, through social networks and digital media, anyone can become an influencer, a commentator, music producer or filmmaker, sharing their work without the need of intermediaries. Remember the story about the man who used a 3D printer to make a prosthetic hand for his son? This is a huge step forward in democracy, freedom, participation and empowerment. The same is true for companies, which can now use data to better understand their businesses and customers and therefore offer more individualized services. But there’s also the other side of the digital world.
Millennials who were ‘born digital’ are already growing more distrustful of the way information is shared. Many digital natives are covering their smart phone camera lenses with stickers because they fear an App on their device might surreptitiously take pictures. Many older generations, the digital immigrants, are getting paranoid about such threats too. They fear their company-issued smartphones and digital devices are being used to spy on them, to monitor their calls, emails and to track their whereabouts. This is indicative of our sensitivity concerning values and trust.
The paranoia about the misuse and abuse of collected data is too often justified. The news is full of stories of personal data being mishandled. The path to commercial success for many emerging digital organisations is built on creating a global customer base and selling access to and/or data about users who wrongly assumed their information was safe. Huge amounts of big data are collected and used in ways that users may not have been aware of when they agreed to download an App, install a software component, sign up for a service or join a social network. A case in point was the recent release of an operating system by one of the world’s largest software companies that made diagnostic data collection compulsory and where users cannot completely opt out.
We should not allow the digital economy to be dominated by a few companies that could control access to information. Perhaps the man who made the hand for his son would only have been able to find links to prosthetics manufacturers instead of the relevant link to the site of the inventor of the 3D-printed hand who gave the instructions away for free. The history of the Internet is as an open platform and there has always been inherent caution when it comes to trust, but have we reached a negative tipping point?
As with the financial crisis, what I see as the beginning of a crisis in the digital world, especially in the area of data collection, is caused by a misunderstanding of values, by a lack of dialogue. Many people greatly value privacy, but this value is sometimes less respected by other market participants, which can lead to conflicts and distrust amongst digital users.
The question arises on how we go about embedding values in the digital world. Today, Internet access and digital services are seen as basic utilities much like electricity and water. These need to be services we trust and value in a positive way.
I believe we as individuals must contribute to a dialogue about the values and principles that define how the future digital world operates. Business leaders must also play a larger role in expressing their beliefs and values and they must be more forthright about the data they collect and how it is used.
The agreement the EU and US officials come up with in light of the recent legal case protecting European right to privacy regarding data protection will be a bold element in shaping the future perception of the digital economy. This agreement should help with setting up new global standards on data privacy. Europe’s highest court ruled that firms such as Amazon and Facebook would not be able to transfer data generated in Europe to a data center in the US.
The challenges regarding business ethics in the digital economy will sharply increase as our use of digital seemingly has no limits. The proliferation of the Internet of Things, digital ecosystems, smart grids, smart cities and smart homes are giving access to every moment in our lives. More than ever before we need to take responsibility for how we express our values. This needs to happen at all levels - from individuals and corporations, to governments and non-governmental organisations - especially when it comes to safeguarding essential functions like energy, water supply and healthcare for individuals, companies and even cities.
If relevant stakeholders are able to establish a framework where building trust is an inherent element, the digital economy would profit from these developments. Data governance and regulation, but also values and business ethics are important areas to be considered if we are to continue to accept such rapid changes to our economies and society.
With a commonly accepted framework of values, digital will continue to thrive. Without this, the future may not be so accepting of the next digital breakthroughs.