Who is responsible for creating the “trust in tech” needed for the Fourth Industrial Revolution?

“A collision between the wall of physical assets and the wall of the internet, wireless communications, etc.” The 4th Industrial Revolution (4IR) has many interpretations, but this one by my PwC partner, Mohamed Kande, may best describe how the new platforms and technologies of the 4IR are fundamentally changing how we work and live. A core focus at this year’s Davos World Economic Forum meeting, 4IR is expected to disrupt existing business models, create new business models and has the potential to generate significant economic value in addition to having a positive impact on society. But while the potential of 4IR - and its foundation of next generation technologies - was widely acknowledged in the Davos summit rooms, the 4IR is predicated on trust and there has been a growing erosion of that trust over the past couple of years.  

The lack of trust showed itself in the comments of many world leaders.  From Chancellor Angela Merkel of Germany and Prime Minister Shinzo Abe of Japan to Vice President Wang Qishan of China, world leaders at Davos took the time to join the chorus of voices commenting on the influence of new technologies and the need for policy makers around the world to address some of the potentially negative impacts.  

• Chancellor Merkel called for global collaboration to address concerns from the public about the pace of technological change.  
• Prime Minister Abe expressed his hopes that this year’s G20 meeting in Japan would be remembered as the summit that started “worldwide data governance.”  
• Back in the US, Congressional leaders from both parties have raised their concerns about the influence of new technologies and have started to discuss Federal privacy legislation as a first step in addressing those concerns.  

These policy concerns are not just political grandstanding or hyperbole, nor is this just a “big tech” issue.  The past year has seen numerous public disclosures - and a growing public debate - regarding the collection, ownership and misuse of personal data.  Criticism ranging from the impact of artificial intelligence (AI) and robotics on the workforce to how data collection practices are crossing over ethical lines are hitting every sector and every size organization.  Moreover, it is clear that the data fueling 4IR may not be as safe as it needs to be -- especially in a borderless digital world. According to a recent report from the Identity Theft Resource Center there were more 1,244 publicly reported data breaches in 2018 exposing more than 446 million records.  Bottom line: policy makers have both the reason and the momentum to act now on the bigger issues of privacy and data security - and are doing so.  Will action on the other technology pillars of 4IR (e.g. AI, facial recognition) be far behind?

How to address the erosion of trust?

Is regulation the most effective approach to addressing these policy concerns?  Probably not - at least not without significant industry involvement. The legislative and/or rulemaking process is often not the most efficient process nor does it always land on the best results for businesses or their customers.  Fortunately, we are only in the early phases of policy making for the 4IR. Policy makers around the world are still working to understand the impact of the 4IR and trying to find the right balance between regulating and a more laissez faire approach.  There is still time for companies to take the lead in addressing these growing policy concerns about the technological advances driving the 4IR.  PwC’s 2019 CEO survey released at Davos found that global CEOs are worried about the impact of policies and regulation on their ability to execute on their strategies - particularly their digital transformation strategies.  Regulation, policies and cybersecurity were all on the top 10 list of concerns of CEOs.  Each was cited by more than 40% of the more than 1200 CEOs interviewed.  An obvious response for CEOs is to take a more proactive approach to addressing policy concerns before they are addressed unilaterally by new laws or regulations.  We call this proactive approach “do it yourself” policy making for the 4IR.

One clear benefit of the “do it yourself” approach is that it allows companies to respond more quickly to the concerns of the general public.  2018 saw the rise of the “digital megaphone” where the public has influenced the policy debate and forced action from businesses at a pace that traditional public policy making has never seen before.  Think about the speed of the online #metoo movement in forcing actions by companies in connection with harassment in the workplace. It would have taken traditional policy makers or regulators months or even years to address these issues.  The public understands its new found power and will leverage it in addressing their concerns with new technologies, AI etc. Companies need to be able to react quickly or they need to be more proactive and lead from the front before issues truly hit the digital megaphone.

Leading from the front with responsible innovation

What does leading from the front look like on 4th IR policies?  What it does not look like is a PR campaign and sound bites from Congressional or other testimony.  Too often we have seen companies declare their dedication to addressing some policy issue - privacy, fake news - only to be back in front of the microphone 6 months later talking about the next thing they are doing because the first thing didn’t quite work out.  Leading from the front means integrating policy considerations into the decision making and evaluation process at the business unit or product level. This is real “responsible innovation” and for some companies it may require some significant cultural change. It will also require a closer relationship between the business units and part of the firm that is monitoring policy developments - often a government relations or government affairs unit.

We have recently seen companies such as Microsoft and Apple take a proactive approach on issues such as AI regulation and privacy.  Microsoft President Brad Smith has written on his blog about the need for thoughtful “government regulation and responsible industry standards to address advancing facial recognition technology.”  Apple CEO Tim Cook has called on US legislators to pass privacy legislation allowing consumers to see - and delete - their online personal data from a central clearinghouse.  Apple has also been an industry leader with regard to privacy controls on their products. These are good examples of leading from the front.

What other types of things should a company - preferably in concert with other industry participants - be doing to ensure it is leading from the front on 4IR “do it yourself” policy making?  Here are a few thoughts.

• Take the lead on the debate on emerging policy issues related to the 4IR through the education of policy makers and the public and by building industry-wide coalitions to address the largest of those concerns.  
• Identify opportunities to build and expand public/private collaboration vehicles at the local, national and global level.
• Include policy considerations in the new product development process and integrate a policy point of view into new businesses, products or services leveraging 4IR technologies.
• Ensure that you are putting your money where your mouth is by validating that you are following your “responsible innovation”, “responsible  AI” etc. vision. This could involve an industry wide self-regulatory organization to ensure that all industry participants are abiding by those standards.  

As with everything with the 4IR, things are moving quickly and are incredibly more complex.  Establishing trust with your customers will be table stakes for success in the 4IR. The companies that establish that trust will have access to data - the fuel needed to drive success in the 4IR.  Will your company be among the first movers to help establish that trust and along with it the policy environment for the 4IR? Seems to me that the only sensible answer to that question is, yes.