Digitisation – ethics and social consideration

We are living in challenging times, as the pace of technological change as we know it in the modern age that goes back to the industrial revolution of the eighteenth century, takes a new turning point as Industry 4.0 is now characterised by a combination of technological innovations and applications including digitisation, robotics, nanotechnology, biotech and neuroscience.

There is much to be gained from technological innovations and the exponential growth in computing power. Digitisation has improved efficiency and productivity at work, opened doors for global communication, and made the world safer and more secure. The process of innovation is continuous and spreads now to data management, blockchains and cryptocurrencies, and the rise of artificial intelligence and robotics. Digitised start-ups became a normal phenomenon with low barrier to entry for entreprenneurs as the need for “brick and mortar” and stockpiling of inventory is substituted by virtual work and communication and just-in-time manufacturing to delivery.

This rapid technological innovation has created new business opportunities through a process of creativity through destruction. We speak today of disruption in the way institutions – business, governments and consumers think, decide, behave and act. Digitisation has demanded new business models which are providing scope for improved efficiency and business growth. Well established businesses are changing their business models to survive, consumers buy through alternative channels, governments utilise (and hopefully not abuse) data management, algorithms are used in providing services and improving user communication.

Innovators, policy makers and users are mistaken if they do not consider as an underlying factor in their equation the human element, and human relationships in society. The person is more than a data profile that is downloaded into algorithms. The person has human dignity, rights and freedom. The unconditional respect of the person is the only essential feature to be taken into account when considering policy, taking decisions and acting in an economic environment. Social interaction and human touch and dialogue which is open and sincere but always interactive must be a permanent feature in the deliberation process. Human dignity demands solidarity, justice and mercy.

Two points usually come to mind – first, is technology abusive, manipulative and addictive? Second, is digitisation and its various technological ramifications a threat to human work?

There is truth in the addictive and manipulative nature of technology. Take Facebook which is designed to exploit human vulnerabilities including tech addiction – the dopamine reaction behind a “social validation feedback loop”. Former Google employees have set an advocacy group to encourage resistance to the way technology platforms “hijack our minds”. Depression, cyberbullying and eating disorders have been identified as potential harm from excessive use of social media. Consider the dependence on addiction by the i-gaming and i-betting industries. Another threat emerges from the monopolistic nature of these technological operators and the difficulty in regulation to catch up with their speed and fast-adaptability.

The question to be raised here is “what is the purpose of this industry?” What were the initial intentions of the entrepreneur and consequently of management? How much have stakeholders rather than shareholders been considered? What about the common good? Is there an ethical compass in the decision-making process?

Some criteria that investment analysts struggle with today which go beyond economic and financial criteria centre around the nature of the business model, its scalability, the long-term benefits of the enterprise, and its sustainability at the wake of both social acceptance and social resistance.

Answering the question on the impact of digitisation on work is as complex. One starts by pointing at the digital divide in our society. Somebody born in the digital world enjoys the benefits which are self-perpetuating as the child is educated and socialized in a digital environment. On the other hand, being deprived of this reality will place people at a disadvantage. An uneven distribution of opportunities creates differences, prejudice and rejection. This is how minorities are ostracized – due to their lack of opportunities to learn and be qualified in what is demanded by the new world.

Will there ever be a replacement of the human person by technology? What are the implications of this on employment and social conditions? It is easy to fall into a pessimistic view and a sense of hopelessness. Indeed, facts are showing the opposite in terms of employment opportunities. On the other hand, it is also true that technology has increased anxiety and stress and psychological health problems.

Which is the other side of the story?

Digitisation, artificial intelligence and robotics can offer more time to persons for the family, friends and relaxation. A more balanced individual with time to work, love and play.

Digitisation and consequent improved productivity, releases work time for creativity in the arts and sciences. More time for the appreciation of visual arts, literature, theatre and performances, while time and money are invested in research and development.

At each stage of the process we are basing our judgements on responsibility and trust. Responsibility of the various social and economic actors in the eco-system, whether it is the state, business, worker or consumer. This responsibility in decision-making and policy-making goes beyond that of awareness of not harming others (creating unemployment or a digital divide), but that of encouraging, cooperating and developing others in not falling backwards in this movement of technological progress.

It is also a matter of trust. Do we trust business, financial institutions, the state, the judiciary, the regulators? We are living in a period of extreme cynicism if not repugnance of the “establishment” which has disappointed people mostly because of its hypocrisy and its invariable attitude of exclusiveness, greed, rejection of accountability and dishonesty. This trust in leadership needs to be regained if we are to rebuild a society open to technology and having faith in what is good and of benefit to society.

In the concluding document called “The Madrid Conclusions for the Common Good” as part of the Dublin Process – A Dialogue on the Economy and the Common Good (www.centesimusannus.org) held at the Universidad Pontificia Comillas in Madrid, a number of practical proposals were presented to strengthen the link between responsibility and trust in modern technology:

  1. Dialogue between business, employees’ representatives and civic society on the value of technological innovation and the way that this can improve productivity, job security and well-being.
  2. New ways of cooperation to be explored between the public and the private sector to design “transition projects” to mitigate the risks on employment and to incentivize leadership in the digital economy.
  3. Priorities in education must be reviewed in the context of the changes in the future of work.
  4. The invasion of privacy because of data gathering enterprises (including financial institutions and technology firms) demands the design of simple, understandable and trusted forms of consent for data treatment.
  5. The use of big data can also be promoted by banks and business in collaboration with international organisations and universities for “common good” projects, such as natural disaster damage prevention, job market exchanges or data access on business opportunities for small companies in developing countries.
  6. The need for a continuous dialogue amongst social ethics specialists, economists, politicians, employees’ representatives and business with the aim of developing an understanding of the new ethical issues surrounding the various challenging questions arising from the digital economy.

Business that has become global both in ownership and outreach has become so important to a large number of people that we all accept that the business paradigm is changing, more so as digitisation plays an even more important part in this transformation. To start with, maximisation of stakeholder value takes priority over shareholder value, encompassing benefits to customers, suppliers, employees and communities where the business serves.

In conclusion, there are a few points that must be kept in mind. Human dignity and freedom cannot be brushed aside. Digitisation is a reality now that we must embrace. The important point here is what and how should the computer decide when faced with a critical situation. In decision making the human person cannot be substituted by a machine. In the process of digitisation, all people should have the opportunity to participate and therefore education, vocational training and accessibility to the internet is a must. Matters of privacy and data ownership cannot be understated as they are closely linked to human freedom and this is why we must consider a proposal for a common ownership of data, as we do for climate and the oceans. At the end, all depends on our reply to the question: How do we want to develop our future?

This article featured in The Accountant, Summer 2018 issue.

About the author(s)

Joseph F.X. Zahra is a Malta based economist with over thirty five years of corporate leadership and business consultancy experience.