Month: October 2019

Digital Debates — CyFy Journal 2019

Digital Debates — CyFy Journal 2019

Digital Debates is an attempt to highlight perspectives, diagnoses and solutions for the future of our digital world that are not necessarily rooted in technology. By design or sheer circumstance, contributors to Digital Debates this year have not only dwelled on the many tensions agitating cyberspace, they have also argued that the political, social or economic realignments triggered by this medium may ultimately settle into a new normal.

Welcome to the age of the platform nation

Industrial Revolution, Efficiency, production, GDP, 4IR, inequality, digital societies, ownership, mass services, sharing economy, McKinsey, replacement, progress, productivity, labour, consumption, innovation, feasibility, IPR, onboarding
Source: Concordia

Since the First Industrial Revolution, growth and welfare have depended upon increasing the efficiency of production. Specialization, manufacturing, electricity and the computer all increased productivity, GDP – and thereby wages and national welfare. Higher wages did not just spur consumption of more goods and services, but also meant bigger national budgets through tax collection. A virtuous circle of prosperity was created. Some gained more than others, creating persistent inter-generational inequality; but, in absolute terms, economic means were enhanced across all major population segments. (Except, of course, for those places that were colonized and subject to deliberate exclusion from such gains.)

This relationship – between productive efficiency and economic growth and wages – is now breaking down in the Fourth Industrial Revolution (4IR). Digital technology is creating digital societies; mass services are replacing mass manufacturing as the source of welfare enhancement; and shared assets are supplanting exclusive asset ownership.

Providing the same final utility to a consumer requires the production of fewer manufactured goods. The sharing economy, meanwhile, means previously under-utilized assets are being more productive. When India’s economy hits $5 trillion (perhaps five-to-seven years from now), it will at most have about 50 cars per 1,000 private individuals (it is 22 cars today). Japan, which is a $5 trillion economy today, has close to 600 cars for 1,000 people. McKinsey has forecast that India will overtake Japan in total car demand in 2021. But this figure does not reveal demand for new vehicles in per capita terms. In spite of the large gap in private car ownership, private ride sharing and other mobility service options will narrow the transport experience between the residents of Japan and India.

Divergence in the automotive sector is particularly telling. In the 20th century, mass assembly-line production created efficient producers with consequently higher incomes – a feature of what came to be called “Fordism”. In the 21st century, individuals and economies are reaping welfare gains from being more efficient consumers. Consumption efficiency is replacing production efficiency – a trend we can call “Uberism”.

In the 21st century, individuals and economies are reaping welfare gains from being more efficient consumers. Consumption efficiency is replacing production efficiency – a trend we can call “Uberism”.

The changes accompanying this shift from “Fordism” to “Uberism” are difficult to see in economic metrics. The more efficient use of assets, the shift from traditional manufacturing to innovative mass services, or the provision of greater utility through fewer goods and less physical activity, may appear on the national accounts as value destruction or stagnation rather than as GDP growth. Yet welfare gains in the future are likely to do just that: appear, when observed through the economic frameworks of the past, like slower and lower growth.

This implies that three major trends need to be theorized and engaged with by economists and political scientists:

First, a replacement is needed for GDP (as we define it now) as a measure for economic progress. Governments and policy-makers chasing GDP growth in an age where welfare enhancement may not be reflected in GDP will not be serving their citizens well. Their policy emphasis will be on objectives that are irrelevant to the 4IR. Barring a few sectors (food production is remarkably resilient to the shared economy, but certainly subject to efficiency gains) and finished goods (personal communications devices being one of the exceptions), a consumption basket biased towards the drivers of production-led growth is now an incorrect marker for proper economic assessments.

Second, a new theory of productivity, labor and consumption is needed. Earlier economic strength came from creating per-unit value; but increasingly what matters is overall valuation. The strength of corporations or enterprises is already being negotiated in these newer terms, but national balance sheets continue to plod along old paths. Compare, for example, ExxonMobil and Apple. In 2007, boosted by then-unprecedented increases in the price of oil, ExxonMobil first breached a market valuation of $500 billion. That year, its revenue was $400 billion. In other words, the revenue generated by Exxon at those levels was much higher than the revenue of Apple at a $1 trillion market capitalization. But investors believe in the future of platforms, and have come to a consensus about the importance of placing value on factors external to a network itself. Platform economies are validated by the number of persons on the platform and not through plain vanilla per-unit production and sales processes of the past. The intrinsic value attached to the on-boarding of an individual or a billion of them onto a platform, or more broadly a “service ecosystem” (say a Facebook, Google or even Aadhaar) is captured by stock markets, but not by GDP assessments.

An inevitable consequence of this process will be a re-evaluation of the economic and political feasibility of current intellectual property rights (IPR) regimes. Today “onboarding” (getting users to sign on to platforms, services, operating software etc.) prevails over “gatekeeping” (charging IPR fees for use/user access). So are today’s IPRs useful when it comes to creating value for countries and citizens in Industry 4.0? This means the nature, definition and pricing of “innovation” itself might have to change: the happenings around Android and iOS are already offering some pointers to the future.

Finally, this discussion would be incomplete without delving briefly into the need for a new theory of social organization. Political and social arrangements that revolve around citizens’ identities as workers are unfit for today’s digital societies of today. The reconfiguration of the workplace (from factory floor to handheld device, for example) and of the nature of work itself, as discussed earlier implies deep changes to political structures and social support networks. Can trade unions stay relevant in this new era? What is the relevance today of party politics that developed out of First Industrial Revolution class conflict, deriving their raison d’etre from the working classes on the one hand and business owners on the other?

This article originally appeared in The World Economic Forum

Our ‘in’secure futures

emerging Technology, Sean kanuck, CyFy, Digital, Debates, Samir Saram, Insecurity, disinforamtion, globalisation, enlightenment, GDP, Aditi Kumar, Social Contract

The following is the introductory note from the upcoming publication Digital Debates 2019 — The CyFy Journal.

2019 will sputter to an end with unresolved anxieties about the future of emerging technologies, and their relationship with our societies. Sean Kanuck, our distinguished colleague and fellow chair of CyFy, identifies four trends that appear to be reinforcing these anxieties: “insecurity, disinformation, anti-globalisation, and un-enlightenment.” As is wont for these times, Sean contributes a new phrase to define the zeitgeist: “indisantiun”. They represent drivers of change that, by themselves, have little to do with the digital domain. Like their Biblical counterparts, these horsemen of the digital apocalypse represent malaises residual in 20th century global governance: economic and social exclusion, lack of transparency in the business of government, pervasive xenophobia, and a profoundly anti-elite, anti-intellectual tendency that is on the rise. These problems may have been seeded in the previous century, but attempts to resolve them using 20th century institutions, regimes and coalitions have come a cropper.

Kanuck’s contribution to the Digital Debates is one amongst fifteen essays for this edition of Digital Debates that are divided equally between five animating themes: Individual, Livelihood, Society, Governance and Conflict. We chose these themes to allow authors to explore comprehensively, the implications of digital technologies from their own unique vantage points as scholars and practitioners. Many of our contributors shared Sean’s assessment of a more insecure and anxious world. In fact, “Indisantiun” may well capture the inability of current global governance arrangements to respond to broader, technology-fuelled disruptions and their disquieting consequences.

We attempt here to tie these themes together, and to present (what we hope is) a coherent picture of the virtual world in 2019. As the most granular, and perhaps most consequential, unit of this world, it is fitting that the first set of essays address the anxieties haunting the individual. The platformisation of the public sphere may have democratised expression — or atleast deepened it through encrypted communications — its by-product has been the creation of new infrastructure designed to extract data and expand surveillance. This has created a paradoxical situation for individuals: the more they interact with digital spaces, ostensibly to exercise their freedoms, the more vulnerable they are to rights abuses — by private actors, their own sovereign, or even a foreign one. This has created a new type of insecurity, one where individuals are “simultaneously under attack and being weaponised” –as Nikhil Pahwa argues–by the influence of digital technologies on their social lives. Tanuj Bhojwani offers a provocative rebuttal to Pahwa, suggesting the notion of unfettered individual agency over digital networks is nothing but a “techno-utopia”. However, he agrees that the framing of platforms as “mere marketplaces” is problematic.

Concurrently, digital technologies have also altered the relationship between labour, capital and productivity. For much of the past century, a nation’s Gross Domestic Product — the sum total of goods and services produced — was considered an accurate picture of its economic, indeed political, health. This will not be a reliable metric for the digital economy, which will likely be characterised by incremental or marginal innovation, diffused supply chains and the “gig” economy that runs on shared resources — all, in turn, fuelled by the aggregation of data. There is great uncertainty about how to quantify the relationship between these independent variables, how they will affect development outcomes and what this implies for livelihoods in advanced and emerging markets. The essays under the theme of ‘Livelihood’ capture perfectly the nuances of this debate. While Winston Ma’s piece speaks to the potential of digital technologies in bridging 20th century development divides, Aditi Kumar responds by clinically dissecting the inequities inherent in digital workforces of the 21st century. Astha Kapoor and Sarayu Natarajan argue India in particular is becoming a “hot bed for micro-tasks” in the digital economy — especially in areas like data labelling — which could ‘invisibilise’ labour and further exclude those at the margin. They too emphasise a shift away from “static notions” of productivity and a more rounded view of “well-being”.

Whatever be the causal pathways, personal, political and economic insecurity has created a backlash against established forms of governance in domestic regimes. The dynamic between the individual, private platforms and the state is constantly in flux, prompting institutions of government to play catch-up. The social contract between the citizen and state is being usurped by private, digital platforms, who through their privacy policies confer on the individual rights that governments are reluctant to endorse. Conversely, they have begun to exercise “eminent domain” over the property of the individual in the digital age: data. In short, there is wide overlap between the functions of a platform and the state — of regulating speech, providing social protections, creating employment opportunities and ensuring national security. Rules and norms to govern these interactions are yet to fully mature, leading to uncertainty in the social contract and, as James Lewis points out, a crisis in the legitimacy of domestic norms and institutions.

The flux in domestic regimes is reflective of the churn in the international order. Connectivity between nations and mutual gains from trade, according to conventional wisdom, was expected to heighten the stakes for war or even limited conflict. Digital connectivity, however has created a new set of tensions.

The flux in domestic regimes is reflective of the churn in the international order. Connectivity between nations and mutual gains from trade, according to conventional wisdom, was expected to heighten the stakes for war or even limited conflict. Digital connectivity, however has created a new set of tensions. Digital spaces are effectively a “system of systems”, from cell towers and routers, to platforms and applications. Taken together, they reflect the digital interactions of entire nations, sans the neat segregation of boundaries which has been the edifice of 20th century politics. This infrastructure is not neutral; instead, as Arindrajit Basu argues, it is political. Cyberspace is not merely a reflection of geopolitics in the “offline” world, but has rendered it even more chaotic by adding vectors of political contest: 5G, influence operations, the Dark Net…the list is long. Isolation is no longer a feasible strategy. Dennis Broeders refers to our times as an era of “unpeace” — a time of both messy interdependence, and of friction and conflict. To be sure, history offers precedents — think of continental Europe before the first World War — but the arena is different this time, and poses a new set of challenges. Anushka Kaushik’s lucid exposition of the attribution dilemma in cyberspace exemplifies the problem: without actors to blame, who is responsible for the malaises of the digital age?

Our authors seem secularly skeptical of prospects to navigate these problems. Nevertheless, we remain optimists. The faultlines emerging today across communities and states are not a factor of digital technologies, but of problems that predate their global popularity. As Philip Reiner notes, “insecurity always has, and always will persist, in varying degrees of flux.” Disruptions exacerbated by digital technologies are an opportunity to re-conceive and adopt templates for domestic and international governance that are responsive and agile — but also rooted in ideas that were paid lip service in the last century: equity and sustainable development.

‘Digital Debates’ is an attempt to do just this — to highlight perspectives, diagnoses and solutions for the future of our digital world that are not necessarily rooted in technology. We are grateful to our authors for having fulfilled their mandates splendidly. By design or sheer circumstance, contributors to Digital Debates this year have not only dwelled on the many tensions agitating cyberspace, they have also argued that the political, social or economic realignments triggered by this medium may ultimately settle into a new normal.

Perhaps the most important of these realignments is the coming to terms of democracies with the introduction of digital technologies in our public sphere. We have, in a manner of speaking, entered a post-internet world. Previous evolutions in media and production technologies(such as the radio or the steam engine) dramatically altered the demands and methods of governance. It is not unexpected that a similar moment is upon us today. Despite present concerns around polarisation and inequality, it was comforting for us to see that each of our pieces on the theme ‘society’ were unanimous in their belief that our democracies possessed the ability to self-correct. Mihir S. Sharma argues that the problems plaguing digital governance has to be treated on its own merit. Whether the management of digital spaces is democratic is, he writes, a separate question from whether they promote democracy. Terri Chapman responds to that poser, calling for greater “explainability” in algorithmic decision-making.

Perhaps the most important of these realignments is the coming to terms of democracies with the introduction of digital technologies in our public sphere. We have, in a manner of speaking, entered a post-internet world.

A course correction is indeed being embraced by, or forced upon technology platforms. Whether it is protests against military contracts with governments, allegations of bias and partisanship, or disquiet at their sheer monopolistic power, the governance and ethics of technology platforms are being questioned more severely than ever before. Paula Kift recognises that this new backlash stems from an “internal rift” (irreconcilable, perhaps?) between ideals and business practices. Consequently, we see boardrooms responding to popular concerns. New ethics and oversight practices, institutional cooperation with the state, and new user controls are all evolving to create — or atleast, attempt to — accountable and transparent regimes for the technology industry.

Processes and conduits of globalisation are also under pressure to respond more effectively to local communities or interests. In the 20th century, economic connectivity was a process moulded by a small set of state and private actors. Digital spaces have undermined this monopoly, allowing individuals and communities to agitate for representative global economic decision making. Civil society coalitions that challenged the provisions of the Trans-Pacific Partnership, and its negotiation in secrecy, were lent a fillip by the internet, lending them instant access to allies and like-minded partners in distant lands. Most crucially, we see such digital disruption playing out in the development sector — where innovations from Asia and Africa are creating platform-based solutions for the next six billion. Their technological pathways to development and policy frameworks will be digital-first by design, and perhaps capable of providing the templates the world so desperately needs.

And finally, our contributors also recognised the character of our international community has changed in the digital world. Lydia Kostopoulous reminds us of the complexity of this new moment: where digital spaces are pervasive, but also interact with and operate within sovereign boundaries, each with their own political contexts. Resolving this contradiction will require efforts that are capable of bridging the disconnect between 19th century Westphalian understandings and the realities of a 21st century digital world. It is our hope that CyFy will be a platform to discover such solutions. We express our sincere thanks to contributors to this volume for setting the stage for the two days of debates and discussions that follow.

CyFy 2019: Chair’s note

The real world is now complemented and implicated by the virtual world. This is a new domain altogether, and its governance is not bound by traditional rules and constraints.

CyFy, CyFy 2019, Samir Saran, Arab Spring, dataveillance, emancipatory

We meet for the 9th edition of CyFy in interesting times. The assumptions that have underpinned digital technologies since the inception of CyFy in 2013 have changed dramatically. There were two competing narratives then about the future of cyberspace and its relationship with society: the emancipatory potential of digital technology, as witnessed by episodes such as the Arab Spring, and the worrying implications of government abuse of internet platforms for surveillance, evidenced in the Snowden revelations. Eight editions later, six in New Delhi and two in Morocco, it is clear which way the pendulum has swung.

The democratic ideal of cyberspace has given way to concerns around privacy, concentration of wealth, and national security. The very platforms that enabled new forms of expression and supported new social coalitions have inadvertently created a sprawling apparatus for surveillance and exploitative control. The ubiquitous availability of data has allowed a plethora of actors to generate granular information about behavioural preferences—making the fickle human mind ever more vulnerable to influence and polarised thinking.

This is now the new normal. Two decades ago, the refrain — eloquently phrased by Prof Larry Lessig — was “code is law.” Today, it is more appropriate to say that code is life. Opaque algorithms, fuelled by what the Indian Supreme Court calls ‘dataveillance’, define the interactions of individuals and communities and their relationship with industry and the state. The boardrooms that develop these algorithms, meanwhile, remain answerable only to their shareholders (if at all), often at the expense of their customers and users. Frameworks for accountability in the digital age — whether from sovereigns or technology companies — have yet to emerge.

States have also taken note of these new tensions. Given the vast social and strategic implications of digital technologies, their evolution in the coming decade will undeniably be shaped by the strong arm and long reach of the state. Governments have instinctively spiralled themselves into a zero-sum race to lead in the development and deployment of these technologies. As a consequence, the internet is less global, less secure and less free than it has ever been at any time since its widespread adoption.

Taken together, these new realities have produced disorder in technological and social systems globally. Malicious actors have aggregated on social media to produce a fractured information environment, malicious actors have weaponised data and algorithms, while states are intent on erasing private spaces and exerting sovereign control over global flows of information. Two decades into the 21st century, the structural forces being driven by digital technologies appear to be leading us into a more polarized and fractured world.

All consequential evolutions in technologies have required societies to create new arrangements. In this, the past cannot help us. The velocity of change and disruption underway today is unprecedented. The real world is now complemented and implicated by the virtual world. This is a new domain altogether, and its governance is not bound by traditional rules and constraints. The 25 conversations we have curated at CyFy 2019 are designed to acknowledge this new reality and to outline pragmatic solutions for this networked world.

Over 130 speakers and delegates from nearly 40 countries, including 10 cyber-ambassadors and government representatives, will spend the next three days in New Delhi to join us for this crucial effort.  As always, we strive to create new coalitions and norms that can address comprehensively the problems of our digital world. We are grateful to our partners, speakers and delegates for joining us to debate these important issues. I am confident that the ideas we hear at CyFy 2019 will inevitably lead to a new consensus for our tech futures.


Oil, gold or more : The big data debate

Data,GATS,OPEC,Silicon Valley

The 1970s saw heated debates in the international community with regard to the ownership of natural resources, centered on the methods and institutions that would manage their price and supply, and the strategic routes and chokepoints that determined access to these resources. Oil was the most important such resource—simultaneously a fuel for 20th century industrialization and a source of geopolitical instability and risk.

In time, the international order did create a new set of arrangements – although not always efficiently. The UN adopted a resolution guaranteeing states’ sovereignty over their national resources — remember the New International Economic Order (NIEO)? — and while cartels like the Organization of Petroleum Exporting Countries (OPEC) became critical to negotiating prices, the sea lanes were protected by mandates under international maritime law. In fact, it would be the US, which opposed the NIEO, that stayed out of the UN Convention on the Law of the Sea for fear it would impede commercial exploitation of the deep seabed.

It is not hard to see why the management of oil was a contentious affair. Like data today, oil was a crucial input for economic, military and strategic advancement. And as such was a perennial cause for tensions in international politics, which is why the comparison continues to enjoy relevance. Similar concerns animate data governance: ownership, economic growth and national security.

Nevertheless, this characterization of data does not always present an accurate template for policymaking. As negotiations on cross-border data flows continue to exacerbate multilateral and bilateral tensions, it is essential for India to appreciate why the ‘data is oil’ analogy is important, and where it falls short. Delhi must prioritise three considerations in this debate.

The first relates to national security. Unlike oil, the flow of data creates a wealth of information that provides granular insights into the preferences, habits and behaviours of individuals and large communities. For centuries, such information was considered essential to intelligence gathering and statecraft. Even today, it is a force multiplier for national power.

The proliferation of data and digital systems has created a very wide catchment area for the application of state interests. Protecting natural resources was a function of a states’ military power; securing cyberspace, however, will require strong cooperation between governments, platforms and academia. In the US, technology platforms are increasingly frontline actors in national security decision-making. How should net-data exporters like India that are dependent on foreign technology systems manage these risks? So far, no reliable templates have emerged.

The second is economic. Unlike physical commodities, the value of data does not necessarily accrue to those who exercise jurisdiction over it. The largest oil companies, whether owned privately or by the state, belong to those nations with easy access to the resource. In many cases, businesses are offered very long-term leases over a resource whose ownership by the state is not disputed. However, while India is home to 600 million active internet users, North America hosts 13 of the world’s 15-largest technology companies by market capitalization, with China hosting the remaining two.

Therefore, the value of data is captured not at the point of extraction but in transit — when it flows, and supports new products, business methods and industries. Indeed, data flows already generate more value in the global economy than goods and services. This may be an obvious point, but its implications are not. The regimes managing the globalization of goods, services and capital were written to privilege Western economic interests. And while developing states enjoyed economic gains from the outsourcing of manufacturing industries, the value addition from investments, royalties and taxes were almost entirely captured by the West.

There is a real risk that digital globalization will lead to the same outcomes. Restricting the flow of data alone will not remedy the challenges for India. However, Delhi should use this moment to renegotiate the commercial, financial and intellectual property regimes that will govern the flow not only of data, but that of wealth and people. The flow of Indian data and personal information cannot be freely bartered. It must be conditional on an architecture that prioritizes equitable development and economic outcomes.

The final consideration is political. Many argue that data should not be thought of as a resource or commodity at all; rather, it should be regarded as the sole and exclusive property of the individual. Data cannot, after all, be mined in isolation – it is the digital interactions of humans and technologies that produce an infinite supply of raw data. In this, data is entirely dissimilar to natural resources. (That said, some analogies can be drawn: what is the point of conferring property rights to underprivileged Indians if their social and cultural status prevents them from exercising this right?) The human rights implications of data generation and flows certainly necessitate the creation of a new set of legislative and institutional protections for individuals.

Nevertheless, it is hard to imagine that this responsibility belongs to actors other than the state. Silicon Valley cannot wear the mantle of a guarantor of rights, because technology companies are exactly what they are: companies. When these platforms are unresponsive to the concerns of their own sovereigns, the probability that they will devote resources to developing states is low.

Moreover, even if data is thought of as inherent to individuals, the Westphalian order continues to privilege the authority of the state in determining the mobility of individuals and their property.

During the Doha round of WTO negotiations at the turn of the century, there was intense debate about the modalities for labour mobility. Under the proposed GATS regime, fast-track pathways would facilitate the mobility of highly skilled labour, while low and medium-skill workers were left out of the bargain – despite the fact that most developing countries enjoyed a comparative advantage in these categories. As it was then, it is hypocritical for the developed world to pick and choose which individuals, and which ‘parts’ of the individual (read: data) can flow freely.

Despite what the thrust of this piece might suggest, data should flow freely. This is the most optimal outcome for the international community. However, this process cannot occur in isolation. This piece is a provocation to address some of the regulatory impulses that have driven the push for localization. Cross-border data flows are compelling structural changes in the global economy. Unless complimentary and ancillary rules and institutions mature, the benefits of these flows will be distributed unequally, creating new digital divides and national security risks. It would be against India’s national interest to uncritically accede to regimes that mandate free flows of data without accommodating its political, development and security concerns.

This article originally appeared in World Economic Forum