Tech, investment and a better world
Henning Stein, PhD
Results-Oriented Investment Solutions Executive | Asset & Wealth Management Change Agent
The corollaries of progress
Does technological progress really improve our lives? This sounds like a question for philosophers, but it is also one for investors. Maybe I should commence my own attempt to provide an answer by revealing what I did immediately prior to writing this article.
In short: I surfed the internet. Specifically, I visited Google’s homepage and initiated a search for “quotes about science and technology”. I did not trawl my personal epistemic base. I did not dredge my bookshelves. I let the web take the strain.
The top-ranked quote uncovered by my “research” – to use the word loosely – came from Edward Teller, the theoretical physicist often referred to as the “father of the hydrogen bomb”. Teller, whose work played a pivotal role in making Armageddon eminently achievable by the early 1950s, once remarked: “The science of today is the technology of tomorrow.”
The second-ranked quote came from Carl Sagan, the astronomer and cosmologist who assembled an interstellar time-capsule for NASA in anticipation of an extraterrestrial encounter. A key figure in the Voyagermissions of the 1970s, Sagan once lamented: “We live in a society exquisitely dependent on science and technology, in which hardly anyone knows anything about science and technology.”
Teller’s and Sagan’s experiences have enduring resonance. As well as underscoring how creativity and inventiveness can dramatically reshape the world, Teller’s story reminds us that we occasionally unleash forces so awesome that we can scarcely comprehend or control them. In addition to emphasising that there are invariably new frontiers to explore, Sagan’s endeavours lay bare the rapidity with which previous normals can be left behind: after all, the time capsule he prepared for an alien civilisation took the form of a 12-inch phonograph record.
Today, not least in light of the COVID-19 pandemic, technology continues to remould the world. It still does not always lead to the outcomes originally envisaged. It is as insatiable and as relentless as ever, if not more so. And my near-effortless recourse to Googling is just one illustration of how it often makes our lives easier. But the question remains: does it make our lives better?
Unfulfilled promise and unintended consequences
Many present-day investors think of technology almost exclusively in terms of Big Tech, a label most commonly applied to Amazon, Apple, Facebook, Microsoft and the aforementioned Google. These and other tech titans have clearly transformed our lives, and many people would also say – quite reasonably – that the overall impact has been to render day-to-day tasks more efficient and less onerous.
From an investment perspective, of course, the attractions of Big Tech are equally obvious. We might argue about blips or bubbles, but what is beyond dispute – as discussed in an earlier piece – is that anyone who has backed these businesses over the longer term would have reaped significant financial rewards.
Yet whether Big Tech makes our lives better in the strictest sense is a moot point. The debate is not so much a matter of if it is capable of doing so: rather, the contention revolves around if it is even interested in doing so.
Consider the view of Chamath Palihapitiya, formerly a senior executive at Facebook and more recently the founder and CEO of venture capital firm Social Capital. In 2019, in his annual letter to Social Capital’s stakeholders, Palihapitiya wrote that Big Tech’s constituents had “promised to change the world and eradicate its evils” but had instead become “more focused on protecting their monopolies than advancing humanity”.
Condemning what he called “intellectual sterilisation”, Palihapitiya accused the sector’s giants of rounding up the most talented individuals in STEM – science, technology, engineering and mathematics – and wasting their potential on “irrelevant” projects. If these would-be visionaries were able to perceive career value elsewhere, he said, they could channel their brilliance into addressing the major challenges and existential threats we all face – as opposed to, say, working on a new algorithm for iTunes.
Similar sentiments are expressed in The Social Dilemma, a fascinating documentary-drama that examines the detrimental effects of some of the most dominant innovations to emerge in the era of digitisation and data. In the words of computer scientist Jaron Lainer: “We’ve created an entire global generation of people raised within a context where the very meaning of communication, the very meaning of culture, is manipulation.”
From Big Tech to bigger picture
It is by no means my intention here to pass judgment on Big Tech or its preferred fields of R&D. I merely wish to draw attention to the fact that the life-enhancing capacity of much of the disruptive technology that defines our age is increasingly disputed.
In tandem, crucially, I wish to stress that there are also many examples of technological progress whose life-enhancing capacity is nigh on impossible to impugn. For instance, it is tough to criticise a novel technology that contributes to health and enriches quality of life; or one that augments care provision and eases burdens; or one that reduces crime and makes us feel safer; or one that, with the future of our planet and its inhabitants at stake, helps save us from ourselves.
Although they can sometimes get lost in the frenzy surrounding their more high-profile counterparts, we should not lose sight of such areas of ingenuity. This is especially true if we are investors, because the best ideas need to be supported by capital if they are to fulfil their potential, prove genuinely transformative and allow humanity to keep innovating its way out of trouble.
Perhaps we should try to remember this whenever we invest in technology. There is nothing wrong with backing Big Tech; there is no shame in favouring the FAANGs; but, as my Invesco colleague John McDonough observed in an excellent article, innovation comes in many guises. We must not forget that other opportunities exist and that many are explicitly geared towards making our lives not just easier, less arduous or more entertaining but manifestly, demonstrably, incontestably better.
Ultimately, we can view this issue through the prism of ESG. There are myriad tech investments that bring environmental, social and governance benefits and which are therefore aligned with the underlying notion of delivering financial performance while serving the greater good. This strikes me as a useful rule of thumb if our concern, as stated at the outset, is whether technological progress really does improve our lives.
Astrophysicist Neil deGrasse Tyson, an acclaimed communicator of science, once said that we should strive to know more today than we knew yesterday and at the same time seek to lessen the suffering of others. He added: “You’d be surprised how far that gets you.” In my opinion, this perfectly encapsulates a way of thinking worthy of philosophers and investors alike – and I am proud to say that it is one quote I did not need to Google.
Disclaimer: I work at Invesco. All views and recommendations in this article are solely my personal opinion. They may or may not coincide with company opinion but should never be interpreted as Invesco company statements.
Links
Scientific American: “The many tragedies of Edward Teller”
https://blogs.scientificamerican.com/the-curious-wavefunction/the-many-tragedies-of-edward-teller/
Smithsonian Magazine: “Why Carl Sagan is truly irreplaceable”
https://www.smithsonianmag.com/science-nature/why-carl-sagan-truly-irreplaceable-180949818/
LinkedIn: “Pandemics, perspectives and the pale blue dot”
LinkedIn: “Are we in a stock market bubble?”
https://www.dhirubhai.net/pulse/we-stock-market-bubble-kristina-hooper-1f
LinkedIn: “Who will spot investment’s next big bang?”
Social Capital: “2019 Annual Letter”
https://www.socialcapital.com/annual-letters/2019
The Social Dilemma: “Discover what’s hiding on the other side of your screen”
https://www.thesocialdilemma.com/the-film/
Medical Futurist: “10 ways technology is changing healthcare”
https://medicalfuturist.com/ten-ways-technology-changing-healthcare/
BBC Future Inc: “The technologies that could transform ageing”
https://www.bbc.com/future/article/20201104-the-technologies-that-could-transform-ageing
Wired: “We’re safer than ever before, and it’s all thanks to technology”
https://www.wired.co.uk/article/technology-fuels-crime-decline
Recharge: “Seven emerging technologies that will be vital for fighting climate change”
LinkedIn: “Why the end of asset management is not nigh”
LinkedIn: “Taking 2020’s most crucial business lesson into 2021”
Invesco: “Environmental, social and governance”