The dark heart of the brave new world

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Management journalist Simon Caulkin, best-known for his column in The Observer newspaper, looks at the role of the manager as a possible force for good in the way businesses manage personal data and internet technologies. 

The difficulty with changing the world is dealing with the unanticipated consequences. The Industrial Revolution certainly transformed the world, bringing work and rising living standards to billions - but its consequences now threaten to fry the planet. Nuclear power altered the world, too, with results that are at best mixed. Now the internet is once again reshaping the earth before our eyes, for good or ill, affecting everyone on it.

How the latest transformation turns out depends crucially on management - our technology for human collaboration. In the abstract, management is neutral, a tool that can be used to build or demolish, like a hammer. In practice, not so much. It would be more accurate to say it has a light and a dark side, dominance depending on whether managers take an optimistic or pessimistic view of human nature and what they believe management is for.

If managers believe that the business of business is business - as many following Milton Friedman do - they will not be too worried where the money comes from. So long as the means are legal, making lots of money for shareholders and oneself is its own justification.

The problem is that how the money is made is even more critical on the internet than on terra firma. And the problem compounds as online interconnectedness increases. We have lost sight of the implications because the row triggered by Edward Snowden's spying revelations focuses on the issue of surveillance by the state. In fact, equally important - and contentious - is the surveillance-as-business model formula of the big internet companies that has delivered the intelligence agencies all the personal data their hearts desired, on a plate.

The oldest law in the book is that if you are offered a free lunch, reach for your wallet. The 'free' services offered by companies such as Facebook, Google and Twitter are a classic case in point. They don't have to be a trap; reflecting the binary dark and light, there's an optimistic narrative under which freely volunteered personal data is used in conjunction with a trusted custodian to benefit both individuals and wider society. This is the prospect offered by the NHS in support of its planned patient data-sharing scheme. And there's no doubt the potential gains are enormous. Ctrl-Shift, which follows such things, estimates thet future value of volunteered information at £20 billion for the UK by 2020. The Boston Consulting Group thinks the value created by digital identity could hit $1 trillion for Europe alone by the same date.

But for that to happen data must be reliable and intermediaries trusted. Currently, neither is the case - witness the fact that almost everyone takes steps to hide their identity online. Not only that but, in the meantime, Big Tech has had a 15-year lead time in which to use the internet's formidable information-gathering potential to turn us into lucrative bundles of 'likes', preferences and habits, to be sold to advertisers. We are now the product, not the customer.

The 'internet of things' raises the stakes again. For several reasons we have already become winner-takes-all economies. As internet seer Jaron Lanier points out in his book Who owns the future? this takes its most extreme form online, when a tiny number of giant companies use their vast computing power to suck up not only profits but jobs too. He notes that at its peak Kodak employed 145,000 people and was valued at $28bn; when the new face of photography, Instagram, was sold to Facebook for $1bn in 2012 its payroll was 13. 'Where did all those jobs disappear?' asks Lanier. 'And what happened to the wealth that all those middle-class jobs created?' 

The Financial Times recently asked: 'Will robots [i.e. machine intelligence and interconnectedness] help us or cost us our jobs?' It left the question open.

We are on the brink of the unknown. But consider this. Yes, the world is changing once again. But if managers' priority is to make money for shareholders from us, as the product, to be sold to advertisers, the real customers, do you think the world will change in a good way?

About the author

Simon Caulkin is a management journalist, best-known for his weekly column in The Observer newspaper which he wrote for 16 years, from 1993 to June 2009. For more information and articles see Simon’s website, http://www.simoncaulkin.com/

This article originally appeared in Professional Manager, Spring 2014, p.74. Reprinted with permission of the copyright-holder, Think Publishing.

Books

Lanier, J. Who owns the future? Allen Lane, 2013.