THE RIGHT BALANCE

World Economic Forum

Outputs from Strategy Officers & Global Future Council meetings
Sanjay Nazerali Feb 2019
 CONTEXT CONTENTS
• What will world leaders be talking about in 2019? 1. 2018/19 Overall theme/narrative

• WEF meetings offer insight into the biggest 2. 4 unintended consequences of the digital
concerns of governments and industry. economy.

• These insights enable DAN to:- a) Social fragmentation

b) Accountability
c) Innovation vs Improvement
o Contextualise our business within a broader d) Short-termism
global narrative

o Speak to clients and partners at a higher level 3. Where world leaders are restoring balance

a) Respect & Listening

• This year, more inputs than before: Strategy b) Balanced growth
Officers’ meetings (cross-industry) + Global c) Human judgement
Future Council (information & entertainment) + d) Transparency & control
Working Group
4. Summary + thought starters
 1.

Overall theme/narrative
for 2018/19
STRIKING THE RIGHT BALANCE
Pervasive sense across business and government that we
have embraced tech, digital, and data. But in doing so, we
have lost sight of fundamentals which make business,
government & society operate successfully and sustainably.
Some of these fundamentals (such as democracy and human
rights, including truth and privacy) are being compromised by
the way we’ve approached tech, digital & data.
The issue isn’t the tech/data itself; it’s our approach to it.
All WEF participants coalesced around striking the right
balance between the capability of the digital economy and
the needs of people (as consumers and citizens)
“We need to ask ourselves not only what
computers can do, but what computers should do”
Satya Nadella, Chairman, Microsoft
“We’re not using it to inform what we do, we’re
using it to dictate what we do. That’s the mistake”
Columbia academic re. data usage
“Echo chambers are the greatest threat to dialogue
and debate. They’re where populism breeds.”
European Union council member, talking about Trump and Brexit
DOMINANT VIEW: OUR MISTAKE HAS BEEN TO PUT
TECH, DIGITAL, DATA IN CONTROL. THIS HAS LED TO
4 UNINTENDED CONSEQUENCES
 2.
4 unintended consequences
of the digital economy

a)Social fragmentation
b)Accountability
c)Innovation vs Improvement
d)Short-termism
(a) SOCIAL FRAGMENTATION The Economist

WHAT HAS HAPPENED?

1. Algorithms are built to optimise.

2. In Search & Social media, that means people

only see views and “facts” which reflect their
“likes”.

3. Any views/news which they don’t “like” gets

filtered out of their feed.

4. The unintended consequence is that people

increasingly live in echo chambers, filter bubbles
and never hear “the other side”.
EVEN IN POLITICS, WHERE DEBATE AND DISCUSSION IS
5. As the algorithm receives more data, our AT THE HEART, THIS CREEPING POLARISATION IS TAKING
content becomes even more polarised. We end PLACE
up with fragmented worlds, which don’t even
know about each other. THE “CENTRE GROUND” HAS DISAPPEARED
SOCIAL FRAGMENTATION: MORE DATA & EXAMPLES

A DIVIDED WORLD WITH DECREASING DEBATE BUT WHAT’S BUSINESS DOING?

The world is getting richer, but income inequality is growing Even universities, champions of debate and advancement,
Business is being taxed
significantly, particularly in Advanced Economies. This is are adopting no-platforming policies and stifling alternative
less than ever before,
creating resentment, social divisions and leading to the rise views. People are very quick to take offence.
but it’s not seen to be
of populism around the world. doing enough to repair
social divisions.
Data below is over the past 5 years – inequality has
increased by over 2 ppts in 75% of Advanced Economies.

If each side sees the other in a highly emotive and negative

light, it diminishes the ability to create common ground
In fact, Fourth Industrial Revolution tech businesses are
perceived to be making social division even worse.

This has led to WEF calling for a “Fourth Social Revolution” to

counter the impact/distribute the benefits of the Fourth
Industrial Revolution

“In Virginia, most Clinton voters (56%) don’t know any

Trump voters and vice versa”
Source: World Bank Source: Washington Post
(b) ACCOUNTABILITY

WHAT HAS HAPPENED?

1. The digital economy is built on automation, which

delivers quality, speed and cost efficiency.

2. But who’s accountable when something goes wrong?

How do you sue an algorithm? Are you insured against
a driverless car?

3. And how do you police criminality such as data theft

and dis/misinformation?

4. Faced with this controversy, the tech giants’ usual

answer is to develop new tech to counter the old
tech’s issues. Regulators have found that answer to
be insufficient.

5. Very high profile cases around suicide, hate speech,

dis/misinformation and child protection have got the 2019 WILL BE THE YEAR WHEN PEOPLE AND
public pressurising regulators to act. ORGANISATIONS ARE HELD ACCOUNTABLE FOR
THEIR TECH, PRODUCTS AND PLATFORMS
ACCOUNTABILITY: MORE DATA & EXAMPLES

BAD THINGS HAPPEN PEOPLE GET ANGRY REGULATORS ACT

People’s anger gives politicians a mandate/permission to act
Attacks on “social People are clearly starting to blame social networks,
– right across the world.
irresponsibility” of rather than the people who post offensive content.
social networks are The argument that “social media are just platforms”
almost daily. Once isn’t working any more
it’s seen to affect
children, it’s highly
charged

In Singapore, the government is undertaking a

mass public education campaign

The Times

Govts are regulating against QSRs operating within

proximity of schools to address child obesity. But
what if students all have food delivery apps?

The Guardian
ACCOUNTABILITY: THE BOTTOM LINE
SOCIAL MEDIA CAN’T CONTINUE TO BLAME
“THE ALGORITHM”
Facebook has hired former deputy UK Prime Minister Nick Clegg as its head of global
affairs. In his opening address, the acceptance of accountability is clear
“I think it’s perfectly legitimate for governments to say, ‘look,
we want to take our responsibility as governments or
legislators to set boundaries’. I don’t think it is sustainable for
tech companies to just say no we don’t like all regulation.”
Nick Clegg, source Press Association
CRITICS AREN’T JUST FROM GOVERNMENT –
THEY’RE FROM THE SAME SILICON VALLEY…
Data-driven business models are being attacked even from within the digital world.
Apple and Microsoft distance themselves from social media woes by attacking it.
““Platforms and algorithms that promised to improve our lives can actually
magnify our worst human tendencies. Rogue actors and even governments
have taken advantage of user trust to deepen divisions, incite violence, and
even undermine our shared sense of what is true and what is false.
Tim Cook
“We don’t actually know what governance they (eg FB) have in place around
code development. I can’t see that ‘longterm societal impact’ would be a
universal guideline for their developers!”
Columbia academic
(c) INNOVATION VS IMPROVEMENT

WHAT HAS HAPPENED?

1. Content creators (including publishers, broadcasters)

are still mostly funded by advertising/traffic.

2. The most financially efficient way to create traffic is to

deliver what people already want (the “sequel
strategy”).

3. Data makes it easier to identify traffic winners by

highlighting exactly what people have/haven’t liked.

4. Content creators are being driven by optimisation,

which delivers financial value, but may not be
delivering the cultural value of innovation.
5. Or, as with Netflix, they’re playing a longer game and
are ready to lose short-term income.
INNOVATION IS ABOUT “DIFFERENT”, NOT
“BETTER” AND IT REQUIRES AN ALTERNATIVE,
RISKIER, MORE LONG-TERM BUSINESS MODEL
INNOVATION VS IMPROVEMENT: MORE DATA & EXAMPLES

ENTERTAINMENT IS LOSING OUT
Short-term business models are risking innovation in the
entertainment industry
“We’re not investing in experimental formats
any more. It’s less risky to stick to what we
know they (i.e. audiences) like”
Star TV
INFORMATION IS ALSO AT RISK EVEN TECH ISN’T INNOVATING
Tech world criticised for creating more “toys”, rather than
“An ad-funded model will always drive truly beneficial innovation. The culprit is often seen to be
confirmation bias, because clicks = revenue. “what can be monetised in the short-term”
This is really dangerous for journalists beyond
tabloid and sensation”
FT

What a paradox! Pewdiepie, the world’s biggest YouTube

star, on why Clickbait is taking over the world and burying
Netflix is considered the digital economy’s most successful “good content”
entertainment company. But – until Bloomberg lifted the
lid – we forget how long (and risky) its business model is

PBS’s view is the same: clicks are creating less diversity of

opinion (journalistic deviance) in news media
Great story: when Brian
Eno met Jeff Bezos and
suggested “People who
bought this NEVER
bought this” to
encourage people to try
new things. Bezos was
not impressed
(d) SHORT-TERMISM

WHAT HAS HAPPENED?

1. Data-driven policy has focused attention on short-term

gains (i.e. efficiency), because it doesn’t/can’t
measure longer-term impacts on corporate and brand
health.

2. The focus on short-term growth has also impacted

society: business isn’t focused on creating sustainable
wealth. It’s focused on cutting costs through
tech/automation, which is impacting jobs and the
consumer wallet.

3. This is generating a heated discussion across WEF

about what “growth” really means:
A. Short-term revenue impacts VS long-term
corporate health.
B. Appropriate growth for corporate success +
societal wellbeing
“ECONOMIC SECURITY” AND “QUALITY OF LIFE”
ARE BEING PROPOSED BY INDUSTRY AS ESSENTIAL
FACTORS IN ECONOMIC GROWTH, RATHER THAN
JUST GDP
 3.
Where world leaders
are aiming to restore
balance
4 AREAS WHERE EARLY SIGNS
ARE VISIBLE
There arepractical initiatives across business and government to
counter these 4 unintended consequences. Every one of them “If we believe in democracy, we
revolves around 4 clearly aligned principles. need to listen to opposing views,
not let them be filtered out”
a) Respect & listening. “RESPECT” and “BALANCE“ are the
words of the year at WEF and beyond. Strong alignment that
NL MEP
spaces need to be created where people can respectfully
listen to “the other side” and respectfully dis/agree.

b) Balanced growth. Balancing short- and long-term goals and

balancing the needs of business with society and the planet

c) Human judgement. Society hasn’t asked data science what

we want it to do; we’ve asked data science what it wants us
to do. View is that we need to restore human conviction and
judgement, albeit data-evidenced.

d) Transparency & control. Last year, WEF talked about

“transparency”. This year, it has evolved to “transparency + RESPECT IS AT THE HEART OF REGAINING “THE
control”, so that citizens don’t just know about their data CENTRE”: DIALOGUE, DEBATE, DIVERSITY AND
usage, they’re actually empowered to change it. DEVELOPMENT
(a) RESPECT & LISTENING
RESPECT IN POLITICS
Politicians are starting to decry the level that political
discourse has sunk to
One NL politician at WEF has created a
pioneering “listening project” for opposing
views to come together, with clear ground rules
around interruption/facts, etc.
LISTENING TO DIFFERENT OPINIONS RESPECT IN INDUSTRY
Tech and media are starting to come together to address Business is increasingly noting that “respect” is a key driver
“echo chambers” with real (if small) initiatives. of employee satisfaction and performance – and that
business isn’t yet doing enough to promote respect. This is
apart from the huge ripples caused by “me too”.
Politecho is an app which
calculates the opinion
diversity of your social media
friends/contacts
Balancer is a Chrome
extention which shows the
bias of the sites you visit
USA Today now pairs its editorials with Opposing Views
(b) BALANCED GROWTH
GROWTH-FOR-THE-SAKE-OF-GROWTH UNDER ATTACK SHORT-TERMISM UNDER ATTACK
Mainstream economists and businesses are attacking GDP as a measure of wealth Even free market economists are pushing back against short-termism
and as an ideal. This has not really been seen in the mainstream before.

Michael Spence, Nobel Laureate, Stanford Emeritus

There’s a particular problem being highlighted in R&D (% of Dividends (% of

the UK, where R&D is very low relative to other GDP) earnings)
economies, but dividends are really high. In other
USA 2.8 35
words, low investment in the long-term
OECD/Euro 2.6 48
UK 1.7 55
Demos
World Bank, OECD
(b) NEW GROWTH MODELS

THIS IS MORE THAN A “LIBERAL FIRESIDE CHAT” ACTIVELY CREATING ALTERNATIVES

This is not about liberal agitators – business is now championing the Global players are actively looking at alternative measures which balance short +
project to create new ways of measuring sustainable growth which longterm, business + society
balances the needs of business + society

These aren’t the words of a left wing egalitarian. It’s Christine Lagarde,
the head of the IMF and a devout free market economist
(c) HUMAN JUDGEMENT

BROADER THAN AN ALGORITHM SAFER THAN AN ALGORITHM MORE CREATIVE THAN AN ALGORITHM

People take more balanced decisions than tech – taking in Tech giants are starting to wake up to the safeguards that Business is noting that it’s people who make things
more variables and being able to see the historical and human judgement and curation deliver different, machines just make things better.
moral dimension, too

“People can take account of way more variables
– societal, longterm, environmental and so on –
than any tech. That’s why we need to re-
establish human judgement as a valid way of
making decisions”
Columbia academic
“The idea of Photoshop never came out of the
kind of data products which are making us
successful today…I think we may be losing
entrepreneurship”
Lauren Kern, Apple News’s Editor in Chief uses
algorithms, but never lets them make editorial
Adobe
decisions.

“Tech has no should, it only has a could. It’s only Even YouTube are using humans to protect children
people who can work out the should”
Mozilla Foundation

Image recognition
software just saw
“nudity” until a human
being intervened with
FIFA’s use of Video Assistant Referees is clear that the “It’s strange – clients were always more
historical context.
VARs never make a decision; they just support the referee comfortable taking surveys with a pinch of salt
than digital data. But in the end, I’m telling
clients to treat them the same way”
Nielsen
(d) TRANSPARENCY & CONTROL

DATA IS IN THE FIRING LINE AND SO ARE POLITICIANS BUT TECH CAN HELP
When Satya Nadella called privacy a “human right”, this is Beyond the constant accusations of Russian data hacking, Like Amazon, we can use data and tech to deliver
what he was championing: individuals’ right to transparency many countries are pushing back against government transparency to citizens and consumers.
and control over their own data/identity control of data

“The High Court has ruled that the govt has

“We need to agree the line between being
no right to retain biometric data or to require
relevant and invading privacy”
it for transactions”
EU Commissioner
Star TV, re Indian data ruling

According to researchers at Penn State

Amazon gets away with it. Why? Because users know
exactly what data is being stored and how it’s being used. It
is perceived to help users make better choices
KPMG
In an offline conversation with KPMG, they assert that it’s
the third point which most governments and corporations
haven’t identified as a priority
University, higher perceived transparency –
whether users recognize how and why the
app is collecting data - is associated with
better product involvement and user
engagement

Even Google has

created a data
usage dashboard,
although it hasn’t
publicised it (!) and
users haven’t
engaged with it.
SUMMARY: 3 THOUGHT
STARTERS FOR COMMS

GROWTH. The digital economy drives unprecedented short-term growth. We can make our clients’ expenditure more efficient, more
accountable and drive their ROI. What industry is concerned about is how to balance that with sustainable, longterm growth. We need to
balance that short-term performance with longerterm, realistic growth. To ensure that our clients – and we - can build sustainable
businesses. That will mean finding the right rate of growth: winning today, but also investing some of today’s gains so that we and our
clients can win tomorrow.

SOCIETY. Business has always been about society. Business creates jobs, which not only creates disposable income, it also creates
taxation, so that society can achieve better health and education outcomes. But left uncontrolled, business can sometimes create wealth
for a few and – with technology – can actually damage job prospects and lead to a poorer society. That’s one reason why we’re seeing
signs of social division and unrest across the world. We need to ensure that we’re not just creating value for shareholders, but also for the
society of citizens and consumers whose prosperity is what ultimately fuels our clients’ businesses.

HUMAN JUDGEMENT. Data and technology, such as AI, provide us with more information than ever before to excel in our jobs. But
they’re not a substitute for human judgement. Human judgement can take account of so many more factors than an algorithm, such as
society, the environment, longterm business benefit, equality and diversity. Machines still can’t take account of all the factors we use in
decision-making. Machines can’t build strong, trusting client relationships. It’s people who are rewarded for their creativity, judgement and
wisdom. Data and tech are great supports, but it’s ultimately people who change the world