Sixty years after the first Ford Model T rolled off the production line, Congress passed a law requiring the installation of seat belts to address public safety concerns. Many auto manufacturer lobbyists claimed this would be the end of the U.S. car industry. But of course, it has saved millions of lives.
It looks like 2018 will be the software industry’s seat belt moment. The introduction of GDPR in Europe, rulings on the rights of contract workers on the gig-economy platform in both the UK and in the U.S., and growing pressure on social media platforms globally to control their content are just the beginning. This growing wave of regulation will likely dominate the next decade of politics as society catches up with the huge changes that new technologies have wrought.
In just the last few weeks, the UK announced the creation of a Centre for Data Ethics, its first national advisory body for artificial intelligence, to look into how data can, and cannot, be used for machine learning applications. An Australian parliamentary inquiry into the future of journalism has raised the possibility of levies on tech companies to support journalism. And financial institutions from the U.S. SEC to Japan’s FSA are working on how they can manage the cryptocurrency explosion without killing a burgeoning new movement.
The world’s leading tech platforms, led by some of the smartest people on the planet, are not oblivious to the coming reforms, and they are working hard to get out ahead of regulation on multiple fronts. Google and Facebook have committed to hire up to 10,000 human moderators to check the veracity and suitability of content on their platforms. Apple and Facebook both recently made voluntary changes to their tax status in multiple jurisdictions.
However, an underlying core belief within the tech community, one that often sees the state as an impediment to progress rather than an essential part of it, needs to shift if the industry is to avoid being blindsided by changing public sentiment and by legislators looking to put reins on global tech behemoths.
Like other transformative technologies, from securitized financial products to the internal combustion engine, today’s technology companies face the monumental challenge of working out what their relationship with the state should look like. The choice is clear: proactively collaborate on change or face decline at the hands of opportunist populist politicians and overwhelmed regulators.
Software may be eating the world, but as far as the state is concerned, it has yet to foot the bill.
While society has benefited handsomely from the hard work of innovators in technology through the many jobs created, taxes paid, and leaps in quality of life, reform is coming. And this as a good thing for both users and citizens. Seat belts did not, in fact, kill the auto industry.
James Wise is a Partner at Balderton Capital and former director of the Social Business Trust.