Podcast: COVID and Its Impacts on Technology, the Tech Industry, and Tech Policy, With Special Guest David Moschella

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The COVID crisis has highlighted more than ever the importance of information technology and the tech companies that produce it as many of us work at home, rely on e-commerce, and enjoy streaming video and social media. What is the impact of this on the so-called “techlash” and on broader perceptions of technology companies? What gaps has the COVID crisis exposed in current IT system that need more innovation and investment? And what does all of this say about government’s role in spurring the digitalization of the economy? Rob and Jackie discuss these issues with IT expert David Moschella, a research fellow at the Leading Edge Forum and author of Seeing Digital: A Visual Guide to the Industries, Organizations, and Careers of the 2020s.

 

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Rob Atkinson: Welcome to Innovation Files. I’m Rob Atkinson, founder and president of the Information Technology and Innovation Foundation. We’re a DC based think tank that works on technology policy.

Jackie Whisman: I’m Jackie Whisman. I’ve been with ITIF for over a decade, and part of my job is making sure Rob, doesn’t forget to say that we’re the world’s top ranked think tank for science and technology policy.

Rob Atkinson: This podcast is about the kinds of issues we cover at ITIF from the broad economics of innovation to specific policy and regulatory questions about new technologies. In this episode, we’re focusing on the impacts of the COVID-19 pandemic on information and communications technology, including public attitudes towards tech companies, how companies will use it going forward and what the government needs to do.

Jackie Whisman: Rob, you wrote a report about a year ago, called “The Task Ahead of Us: Transforming the Global Economy With Connectivity, Automation, and Intelligence.” You wrote that the next wave of digital innovation was coming and countries could either prepare for it and ride it to new heights of innovation and prosperity, or they can ignore the changing tide and miss the wave. Well, it really seems a tsunami has hit doesn’t it?

Rob Atkinson: Yeah. I actually wrote that report based on reading a book by David Moschella, our speaker today. That inspired me to really think through some of the public policy implications and absolutely today countries have no choice, but to focus their economic policies on overcoming these big obstacles around IT and taking advantage of this next wave. To talk about this we have one of my favorite thinkers on digital technology issues. My friend and colleague David Moschella.

David is a research fellow at Leading Edge Forum, where he explores the global business impact of digital technologies. He’s a well known international speaker writer and thought leader, and recently released his latest book, seeing digital, a visual guide to the industries, organizations, and careers of the 2020s. David, I’m not saying this just because you’re here, but I’ve heard Rob say many times that yours is the best book he’s read in a long time. Thanks for being here. We’re excited to have you.

David Moschella: Well, thanks Jackie. Thanks, Rob. Its great be here. Appreciate all the kind words.

Rob Atkinson: Let’s start with the implications for the “techlash.” I probably should define what that means. We wrote a report at ITIF called “A Policymakers Guide to the Techlash” late last year. The techlash is essentially this elite opinion that’s formed in the last few years, that blames technology companies for a wide array of harms. From privacy harms to hurting the environment. How do you think this all is going to play out now that we’re all so dependent upon and using technology, so effectively in this time of crisis?

David Moschella: Well, everything’s been turned on its head. If you look at the so-called a BC, before COVID period, and how worried people were about the power of tech and now tech has gone from the force that disrupts the world and changes it, to the force that actually stabilizes it and sustains it. When you are working through tech and you’re getting your food through tech and communicating with your friends and family through tech and entertaining yourself through tech. When it’s sustaining your very way of life, it’s much harder to say that this is somehow a bad thing. Although the issues of privacy and automation and monopoly power, none of those things are going to go away. There are real issues, but the steam is basically being taken out of them piece by piece. If you look at those. Look at privacy, well, the very people who are most concerned about privacy six, eight months ago, are the same people today that are demanding extensive contact tracing, very antithesis of what people had in mind.

The people who were concerned about automation are saying, “Well, how come we can’t process all of these small business loans? How come we can’t conduct hundreds of thousands of tests?” These are the very things that require automation. You could go down the list of most of the great techlash concerns, and you’ll see the same pattern, that when you switch from being the disruptor, to being essentially the sustainer of the way we work and live, that is that it’s hard to be as fierce critic as you were. I just think a lot of the steam will go out of the techlash once this period is over. I think that’s rightly so and good thing.

Rob Atkinson: I see the same dynamic with regard to pharmaceutical companies, biotech and big pharma companies that are developing new drugs. Three, four months ago, they were demonized as profit hungry companies that only cared about making money. Now you can’t go a day without reading an article, and “Oh, so and so is coming up with potential treatment. How was J&J coming up with a vaccine, or Pfizer?” I think the same dynamic is probably going to play out there as well, where we’re like, thank God there are these innovative companies that are coming to the fore right now, just when we need them.

David Moschella: Yeah, I certainly hope so. So much of the current period really depends on whether we do or don’t get a vaccine or an effective treatment. If we get either of those things, life will get a lot more back to normal pretty quickly. If we don’t, it won’t, and those companies, not just the American ones of course, but ones all around the world are working on this problem. The private sector is the one that’s almost certainly going to solve this in terms of a vaccine. I think that those change perception and how these big companies are seen.

Rob Atkinson: Yeah. Again, it’s this juxtaposition, not just to the fact that we’re reliant on these, but how we see the government failures or at least government missteps. They haven’t been able to process unemployment insurance claims adequately. SBA has not been able to deal adequately with loans. You see the same thing with the CDC, which was once the gold standard of all government organizations, which has certainly made some mistakes and not done what it should have been doing. I think that helps as well. It makes it clear that a lot of these big companies are actually doing quite well.

David Moschella: Yeah. Without question, and people are starting to ask the fundamental question of, “Why is it that so much of Asia has managed this thing so much better than not just the US but most of Europe as well.”

That is not a private sector problem. That is a public sector issue. The answers of that are still not all that clear and you don’t have to look at China, but you look at Hong Kong and Taiwan and South Korea and Singapore, even Australia and New Zealand, all with dramatically different results than we have, not just in the US but in just about all the European countries. Germany has done better than most, but the rest of them, Spain, France, England, Sweden, Belgium, their numbers are actually worse than here and sort of trending to be probably more or less the same over time.

The public sector is still trying to understand, why some parts of the world have done so much better than others. That’s a big shock to our leadership. That’s going to be hard to avoid. When you contrast that with the private sector and I think a lot of companies have done a pretty good job of getting food and supplies and continuing their operations through this period. I think there’s far less criticism on that side of the fence.

Rob Atkinson: I was looking at a story on Twitter a couple of days ago, and it showed a little robot walking along in Singapore and warning people in a very polite voice, please keep six feet apart. Singapore, they’re rolling out these automated technologies to help with social distancing. We’re not, and not only are we not, but much of the coverage in the United States portrayed that is dystopian, horrifying, awful, scary robots. Yet when you listen to what they say there, please stop being so close.

David Moschella: Yeah. I saw that robotic dog. It’s funny in some ways but it’s a really quite efficient thing, rather than asking your police to hassle people about such little things when they have bigger issues to deal with, it makes sense. It does speak to these views of automation and Rob, you and I have talked about this for years, that people always are very quick to see the downsides of automation, and they’re pretty slow to see the upsides. We’re seeing that here.

We’ve talked about getting money into people’s accounts or processing loans or doing testing, but look ahead, this would have been a pretty good time to have self driving cars. It would be a great time to have robots in warehouses and all of these things that seem science fiction, not that long ago now, if we’re going to be in this isolation economy, these things take on far more significance and become almost an essential thing that we have to do. It is accurate to say that the US and most of Europe is certainly behind in that sort of thinking.

Rob Atkinson: Just think about when people hear the term automation, they think about things like a self driving car or a factory, but as you and I have written about in a piece for ITIF in Leading Edge Forum on the importance of technology automation, it also applies to offices. If you think about, for example, the unemployment insurance process in this country, which has really failed and it’s failed because it has still relied on, oftentimes manual processing. You cannot scale. When Google has a tenfold increase in the number of search results or search queries. It doesn’t have to hire 10 times more people. How do you see organizations, both business and government dealing with that office task automation going forward?

David Moschella: I think there’s two issues there. In the short term, there’s a fundamental question of, are large organizations going to keep these large office spaces in particularly in dense urban areas where you are dependent on transportation systems? I was talking to a client in the UK the other day and said, they have their big office towers of bank in Canary Wharf and outside of London. He’s like, “We probably don’t need those. We don’t need them because a lot of people are actually enjoying it and prefer to work at home, so we’ll have some of that. We may need less people in our organization going forward anyways. We’re starting to be more interested in not being in such dense urban areas.”

When you stack those three together, you start to see a scenario where more office space and the real estate implications, not just for commercial, but for residential as well.

If you look at this period, the people who probably suffered most. Well, most a lot of people suffer, but people living in high rise accommodations, have perhaps one of the tougher lives. Every time you get in an elevator, you have to think about what that might mean, or being stuck in a place with no balcony, 30 floors above the city. They have huge issues there in offices and in housing. That’s a downer and a challenge going forward.

If there’s any upside to this whole automation discussion, and you and I have talked about this for years, there is the view that if America, if Europe, if we’re really going to address the challenges of the 21st century of transforming our energy systems, our transportation systems, our food systems, and taking better care of people and remaining competitive, taking care of climate change and the environment. All these immense challenges that are coming down, and don’t really care about this virus one way or another. If we’re going to have the bandwidth and the capacity to face those challenges and to meet those needs, you have to reduce the burden of what’s here now, and therefore essentially automating what people are doing now as a way of freeing up capacity to deal with the things that we need to take care of going forward, is probably a decent way of looking at the world pre COVID.

You and I have talked about that a good bit. Now you look at a post COVID, but how does that change it? Well, in some ways it changes it because you now have lots of unemployed people, whereas before you had almost maximum plate, but in another way it actually accelerates it, because the only way of dealing with the COVID crisis is through increased automation. I think it sets us on that course. I don’t know if you saw a bit recently, the CEO of Microsoft. Satya Nadella, said, “We’ve seen three years of transformation and automation, in the last three months.” The accelerated pace of automation and transformation, whatever you want to call it, is clearly going on. There is a bright side of that going forward, but of course we’re a long way from there.

Jackie Whisman: You see this spring and increase in automation and autonomous systems are at a minimum, increasing public support for it.

David Moschella: Well, certainly in the short terms. You imagine a city that today is dealing with this and say they close the streets at night, and all you had was self driving vehicles going around all night long making deliveries. Well, that is a very safe and effective way of doing it. Technologically, it becomes much simpler when there aren’t a lot of other cars on the road. It’s still futuristic. It’s still not something people are going to do today more than experiment, but in people’s minds, they start to see, a lot of us including myself, say, “Oh, I don’t really care about self driving cars I like to drive... Self driving trucks, no big deal”

In this environment, they take on much more critical need and you see that happening. Again, if you look at what’s going on in Asia, that they’re preparing for that sort of future.

Rob Atkinson: David, I think one of the other impetus for automation going forward is going to be the fact that the federal government has spent over $3 trillion.

That’s huge budget hits to the government. That is going to have to be dealt with at some point. As we have argued before, the best way to deal with that is to raise productivity, to get the economy growing faster, to get higher incomes. How do you see role of automation playing in that?

David Moschella: I’m no expert on government budgets and financing, but it is quite extraordinary that, for most of our lives, we’re constantly being told that the government can’t spend anymore and the deficits are a problem. We have all these constraints and then all of a sudden you can find three trillion or six trillion to do things.

The first thing is how does that relate to the citizens expectations at all? You start to see now things like universal basic income that people thought was maybe something for the future, but a pretty radical idea, all of a sudden getting support and actually being rolled out in Spain and other places. The citizens view of this spending thing, I think is a huge issue for governments that forever I’ve told people they can’t spend money, and now suddenly they can. To your point about how you pay for it, how you finance it, how you grow.

I think if you take seriously metrics of debt as a share of GDP, which everybody historically has. The only way to put that into any perspective is to grow the economy, to have more productivity and to make that debt a smaller share of the pie. Growing your way out of it is a longterm thing. In the short term, it seems to be mostly a political thing of whether anyone is going to say, there are limits to what can and can’t be spent. We haven’t really got anywhere near that. As you well know that the plans to spend even more are still under development and depending on what happens, nobody knows how all of that will play out. From a citizen’s point of view, people are getting checks and stopping that, it’s going to be tricky.

Jackie Whisman: How do you view the government and the role it could play in supporting this drive to digitize in an accelerated way? It seems like the need is here. How does the government fix these problems in a way that makes sense?

David Moschella: Yeah, it’s a great question. There’s lots of things government can do from R&D, and a policy and skills and education and immigration, and all of those things. We can talk about those. The one that I always like to stress is that to me, the main thing that governments can do in terms of advancing the digital agenda is actually be an effective user of technology in its own work. I always use the example of the Internet. The Internet did not emerge because the government said the tech sector needs this incredible societal platform. The Internet emerged because the Defense Department said, “We have a need for decentralized more resilient networks.” They design technologies to do that, and those technologies went on to become the backbone of how the Internet worked, but nobody knew that that was the case.

In fact, if governments had sat down to design the Internet in the seventies and eighties. They would have done what the French did. They would design a Minitel system based around dumb terminals almost certainly. I use that example as a way of reinforcing this idea that the government meeting its own advanced needs for technology is one of the main things they can do to move our industry forward.

What are those needs? Well, you look at them, identification systems. Look at voting, having this massive thing now about mail voting, from a tech strategy, is like the most retro thing we’ve ever heard of and depressing. You look at Defense Department deal with all kinds of advanced needs for autonomous systems and robots. You look at smart cities, you look at blockchain, but the point is not so much to look at technologies or things. It’s to look at needs and say, what needs does the government have that are significant, that technology can address? If they address those needs, like the Defense Department did, odds are, those technologies will spin off and have great value in the private sector. You use the example of a really good secure identification system or digital payment system, digital cash, all these things. The tech policy agenda is really important. It was important in meeting the Japanese challenge many years ago, but the even bigger one is using technology well in your own work. I think that’s an area that I think that we all know the government can do better in.

Rob Atkinson: David, I think in that space, there’s really one way to think about this, is divide it into two groups of issues. One is areas where the private sector is already rolling these out and developing them effectively and is using them effectively. There we see federal, state, local government websites, for example, oftentimes failing or not operating the way they should. One of the pieces is just get the government to come up to something close to commercial standards. The second though is, as you noted, all of these new areas that the government, by meeting its own needs, could play an important role. You mentioned a couple, but let me say three. ID, as you mentioned, we all need digital IDs. That would make this whole system we’re in, of isolation economy a lot easier. If we could authenticate ourselves, sign documents legally, without having to leave our home.

Secondly is the whole issue of digital cash. Imagine if the government says everybody’s going to get a thousand dollars and it’s going to happen within seven minutes. It could be done through everybody’s phone. Then lastly is data analytics and data. We really need much better, more real time data about the disease. Who’s getting it? What are the treatments? Right now there are actually people, or there are organizations that are faxing information in, to the CDC. You think about that. Faxing information. Thoughts on all of those?

David Moschella: I think they’re real. It actually amazes me in all the efforts to really test and use the data in the whole COVID period, that the tech companies have played such a minor role in and traditional ways of collecting data have persisted. That is a frustration, but your first point about bringing the government up to commercial standards seems like such an obvious thing to do until you start realizing, there are town websites and city websites and state websites and all the different federal websites. That’s so much the opposite of how the Internet is evolving with trying to have a few really powerful, really resilient platforms that everybody uses and everybody is familiar with and just get better and stronger over time. I think that has been an enormous challenge. I think some progress has been made there.

I know we worked with the UK government on this problem a good bit, and obviously a smaller version there, but a version of the same issue. One of the things they concluded was they could not solve these problems without dealing with those issues of structures and hierarchies and specialization. That they needed a more broad based set of systems and tools that had more commonality, that are more shared and more like a cloud experience. That was politically very difficult and they certainly haven’t done it all yet, but that’s the direction they are going down. Whether that’s feasible in our system, you would know better than me, but it seems to me from a technology point of view, that would be the direction that could work. Otherwise, the private sector is going to continue to move into those spaces.

Rob Atkinson: I’m glad you brought that up because this is an issue I’ve been writing about for almost 20 years, about the government needs to do, rather than be the provider on the Internet, it needs to open it’s back systems up to APIs, application protocol interfaces, and really let private sector players come in and provide these services. We see it in tax, but I was on a call recently with the NASCIO, The National Association of State CIOs. One of the things we talked about was unemployment insurance websites. What I proposed was that all 50 states work together, create one giant UI portal, that uses the cloud, works with private sector analytics and then sure, there’d be little differences between Maryland and Oklahoma, but those just could be easily programmed into the software. What are your thoughts on something like that?

David Moschella: Well, I think from a technology point of view, it seems not only a good idea, it seems like an obvious idea. You know the politics better than me from a political idea, how did that go over? Do people want to do it?

It’s not just fiefdoms and turf and all, that’s a big part of it, its people’s jobs in all of those IT departments at every level, doing things the way they’ve always done them. In that sense it’s a mirror of the private sector, that before the Internet came, every company had its own little data center and its own little set of applications and did things in its own little way. After the Internet, the people who had brought more scales with the system, won. Anything that could go that way, did, and that movement is still going on. I think it’s the one that has largely left the government behind.

Jackie Whisman: One more question for you just for fun. If you were a presidential advisor on tech policy, what would be your top priority?

David Moschella: Well, forgetting about the virus for a second, there is no question that the top priority of the US tech industry, is what to do about China. That China is now a legitimate challenger on virtually every front of the tech sector, at least the software side, and gaining ahead in many areas, 5G, drones, AI, many things. We’ve been essentially asleep at the switch through the last 10 to 20 years of Republicans, Democrats. It doesn’t matter. People thought that it was all going to work out well and that America would always have this tech lead and get a great big market. That’s just been wrong and it’s been obviously wrong for a good stretch of time. The question is what to do about it, because it’s so late, that is actually quite hard.

It’s very hard to do a lot of things that curtail China, that don’t actually hurt ourselves as well, because most of the companies that China works through. We don’t buy a lot of Chinese branded products here in America, but the products that come from Apple or through Walmart or Target, or obviously everywhere else, are made there. It’s hard to so-called “punish” China without punishing Apple or Walmart too. That makes it hard. What can you do?

Well you’ve got to look at the things that are really a problem. I think there’s clearly some progress that can be made on reducing dependencies in critical areas. People have been asleep on that one, but at least now are woken up to it. I think there are things that can be done to, hopefully get parts of the rest of the world to agree that, the current way of essentially having forced technology transfer, is to do business in China. Everybody caves in when they’re on their own in that situation. If everybody, the Europeans, the Japanese, the Americans said, “We’re not going to do that anymore.” then you might have some success there, but that sort of solidarity has been extremely difficult to maintain. Most importantly, America itself has to be more competitive in those key areas. Whether going forward, it’s quantum or AI or payment systems or digital currencies or cameras and surveillance and facial recognition, all of these things.

We better be competitive in those or else. Just putting up walls to our own market won’t do all that much for the rest of the world. Dealing with China is the biggest issue in Silicon Valley today. It’s a tough situation when one country is both your number one competitor and your biggest market. That is true writ large for many industries and companies right now. I would say that’s the top priority. I think that’s going to come out of the virus situation and it’s going to, I think going to get pretty ugly.

Right now, it already is with the blaming of China. We’re going to blame China. China is going to tell us that, “Hey, you’re just using that to distract from your own failings.”

The amazing thing about that is that both sides are true. There are things we can blame them for and people will use it to distract from our own problems. The bottom line is fighting with China won’t help us get through the virus period, but it will be a huge factor in the post virus period. Therefore from a policy point of view, I would think that would be the dominant issue in tech for the next five years and maybe more.

Jackie Whisman: Well, thanks so much for being here, David. This was so interesting. Can you tell our listeners where they can find you?

David Moschella: Sure. All the standard ways: I’m @dmoschella on Twitter, I’m on LinkedIn. Send me an email at [email protected] or just ask our friends at ITIF and get contact info that way. I always like to hear from the ITIF community because you’re all doing such interesting and important work. Thanks for everything.

Jackie Whisman: Thanks again. Thanks for listening everyone. If you liked it, please be sure to rate us wherever you get your podcasts. You can find the show notes, including all of David’s contact information on ITIF.org.

While you’re there, you should sign up for our weekly email newsletter. You can also find us on Twitter, @ITIFdc, and we’re on Facebook and LinkedIn too.

Rob Atkinson: Well, that’s it for now. We have more episodes coming up with great guests lined up to talk about telemedicine, regional tech hubs, and others. Please come back.

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Podcast: COVID and Its Impacts on Technology, the Tech Industry, and Tech Policy, With Special Guest David Moschella