Happy new year and welcome back! At the beginning of each year, we reflect upon the happenings of the past twelve months, and ponder about what might be coming.
Last year, we thought that use cases and sophistication of AI would expand to different sectors, but fall short of bringing the level of autonomous decision-making that many predict (and fear). In some sense, the corporate applications of AI have concrete, practical backing — at least in the basic levels — but we also saw a wave of skepticism, spurred by an acknowledgement of the hundreds of thousands of human annotators required to create the data sets that AI needs to train.
We also thought that IoT deployment would accelerate, pushed by edge computing and 5G, and we thought the year would be dominated by discussions over interoperability and security of connected devices. On that topic we were somewhat off target: 5G clearly hasn’t seen much commercial rollout, despite ongoing infrastructural projects; and while connected products are still being introduced — they have largely been iterations of existing items (watches, cars, etc.) and they certainly have not been making the headlines that we expected (except in cases where the security of these devices were compromised).
Where we were right on the spot, though, was 2019 being a year of ethical reckoning for the tech industry. Increasingly, consumers are becoming more aware, and more concerned, over how their data is being collected and used by tech companies — such as recordings of conversations with Amazon’s Alexa being sent to human transcribers. Beyond data, the ethical probes also expanded to include the role that tech firms should play in society at large (witness the internal activism of Google and Microsoft employees, and the official probes by American and European authorities into the anti-competitive behavior and privacy breaches of big tech). For what it’s worth, Google also announced a phasing out of third-party cookies, citing privacy and data concerns.
In the year ahead:
In 2020, the tech world will be undergoing a period of intense self-reflection — and heavy external scrutiny as they navigate a disrupted world that they have helped to create. Almost three decades after the commercialization of the internet, we are at a cusp of a paradigmatic shift of attitudes: from bewildered wonderment where tech firms have been largely allowed to roam free, and consumers willing to blindly hand over data in exchange for services — to a world far more skeptical of the intentions of big tech, and the ethics which guide these titans of the modern economy. More so, they will be expected to have opinions on issues beyond their immediate industries, and perhaps even to intervene in places where government action is lacking.
The much publicized trade war between the US and China is likely only a symptom of a vast and brewing geopolitical split of deeply conflicting ideology and economic doctrine, and therefore likely only the start of a more fundamental split between the world’s two biggest economies. In particular, the term ‘decoupling’ has often been attached when discussing the relationship between the two nations, with the suggestion being that the interwoven system of global trade, capital flows, and technology exchange may be split into two, separate ecosystems. Whether this rivalry should indeed manifest in tangible fissures in technological development will take longer than a short year to determine, but over the course of 2020, this is certainly something we’ll be keeping a close eye on.
Already, reports suggest that investment by Chinese VCs fell by more than half in the first half of 2019 year-on-year, while American VC activity in China fell to its lowest levels since 2014. Plus, China just formally created a $29bn fund to invest in the semiconductor industry in effort to reduce its reliance on US tech. Many more such events will take place in the next two years, even as the sides are about to sign a small trade pact. But slower investments are not the biggest killer: it might not be ideal, but far more damaging would be a severance of a global marketplace of ideas and talent.
Davids and Goliaths
Seemingly, there comes a point in the life of a tech company that, when it becomes big enough, it is no longer just a company, but a platform. And these firms become so big, and their pockets so deep, that they can expand relentlessly, imitate and out-invent would-be competitors, or outright acquire smaller firms before they become serious threats.
Alphabet’s Google started as a search engine and later as a marketing machine. Today, it makes smart home apps and speakers, autonomous cars, internet browsers, disaster prediction algorithms, and healthcare services. From selling books online, Amazon has morphed into a web services provider. It also makes smart home appliances, runs a grocery chain, builds robots and autonomous logistics vehicles, owns a major newspaper and one of the world’s most popular streaming platforms, and supplies surveillance tools to law enforcement. They start out as definable companies with definable products, services, or specialties — but they now fall under the murky description of ‘technology company’.
So, we think a topic of this year will involve a fundamental discussion over how to best approach corporate innovation. The leading question is whether these firms have gathered too much power and popped their fingers in too many pies, and stifling the creativity of smaller firms — or whether this immense power is also necessary for incredible inventions by allowing deep pockets to back R&D efforts, and an easy exit route for smaller innovators that come up with something clever.
Finally, few areas require action as urgently as climate change — and this is one major arena where technology could, or is perhaps even expected to, play a pivotal role. The industry will be undergoing change from many fronts. Existing firms will be feeling the heat to contribute. Companies like Amazon will have to find ways to answer questions on how their operations add to a struggling planet, while the new generation of innovators will be intimately aware of the biggest challenge of our era. Public concern is high, which means consumer interest is high. This helps sustainable tech to shift away from being a philanthropic investment, but as something that can generate returns as well as create benefits for the wider world.