- Technology companies are coming under increasing public and political scrutiny, impacting on share prices and growth prospects.
- The relentless roll out of innovation as well as a perception of a lack of diligence in data privacy are contributing factors to a loss of trust in the sector.
- A focus on the elements of transparency, governance and participation in creating public policy can help improve trust levels – and profitability.
Trust has always been important for businesses to get right when it comes to building a relationship with the world they operate in. But arguably never has it been a more critical element for technology companies to focus on than now.
The tech sector is currently navigating massive shifts in expectations both from society at large and the governments that regulate it. Although these companies – many of which now count among the world’s biggest – have enjoyed steady profitability and growth, rising geopolitical pressures as well as challenges relating to the mainstreaming of innovations are disrupting their growth trajectories.
Indeed, the results from PwC’s 22nd Annual Global CEO Survey show that just 40% of tech leaders said they were very confident about their revenue growth prospects over the next 12 months. Confidence in their longer term prospects between now and 2021 is at its lowest level in five years.
Navigating an era
of profound change
There is a rising consciousness among citizens of how their personal information is being handled and secured, and as a result, customers are increasingly approaching new technology with caution. While emerging technologies continue to capture the imagination of executives for their transformative potential, some have yet to prove their commercial viability. Further, some highly publicised problems – such as inbuilt biases in AI, or deadly self-driving car accidents – have yet to be resolved.
It’s also become evident that consumers and governments are pushing back over a perception that the industry operates on a principle of ‘it’s better to beg for forgiveness than ask for permission’. Instead of viewing elements of the sharing economy as society-enhancing innovations, they are being seen as simply new revenue streams that can be quickly rolled out without rigorous consideration to the consequences.
But these challenges are no reason for those operating in the sector to despair. As the fourth industrial revolution takes hold, a willingness to open up about the issues technologies are creating and facing could actually improve business value, with research and breakthroughs along the way helping alleviate concerns about their viability.
Building a strategy
Rather than being reactive to the political and societal changes that affect them, technology companies must be proactively engaged with both – in order to help them navigate the challenges that lie ahead, but also to ensure they positively shape the world in which they play an increasingly large role.
Starting in the development and implementation stages, companies should consider these three factors to help build trust:
Businesses must be upfront about how their technologies work. For example, with AI, concerns already abound regarding the biases that are being built into supposedly neutral systems – biases that among other things, have precluded people from being hired for jobs or applying for loans based on their background or in extreme cases, race. These concerns are leading to the demand for ‘explainable AI’ so that users can understand how decisions are made and what the potential impact may be. Perhaps intuitively, these measures should be considered and developed with the technology – not as an afterthought.
It’s important not to rush products to market before they have been fully tested. The risks and potential harm to their reputation are enormous. The risks that must be considered include not only the technological and economic risks, but social and political risks as well. Public acknowledgement of these risks and innovations adapted specifically to reduce them will also go a long way towards mitigation. Above all, the design of governance rules that determine accountability for when things go wrong is critical to swiftly and decisively manage a situation when it does happen.
3. Public Policy
The tech industry should be playing an active role, working with governments to develop policies and regulations that directly affect them. Much of the backlash towards tech companies comes from the perception that they are standing in the way of what the public sees as reasonable oversight. Such an approach could result in more stringent regulation, so it is incumbent on the organisations themselves to engage and work with regulators in developing reasonable standards that meet societal expectations but still allow the space to innovate and reducing any negative impact on society.
The more pervasive a technology becomes, so too does the potential for fear towards it. Trust and openness are the keys to changing this mindset and ensuring that innovations being implemented are not only adopted but embraced by both customers and society at large.