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Big Tech Needs to Better Defend Itself

January 3, 2023

Defending Digital Series, No. 13: Although many of today’s accusations against Big Tech are unfair, the technology industry should do more to protect itself. Pushing back against its critics, better aligning itself with America’s national interests, becoming more politically neutral, and effectively addressing long-term societal challenges would surely help.

Contents

Leading Digital Mythologies 1

Aligning With the National Interest 2

Pursuing Ideological Balance. 3

Fulfilling Societal Promises 4

Endnotes 5

The Information Technology and Innovation Foundation (ITIF) began this Defending Digital series in January of 2022 because we were increasingly concerned that so many of the critiques of “Big Tech” were exaggerated, unfair, or flat out wrong. We decided that each month we would look at one oft-repeated charge and examine how well it holds up to scrutiny. Our goal has not been to dismiss all such concerns completely, but rather to restore a sense of balance. We continue to believe that if politicians, policymakers, and the general public have overly negative views of the impact of information technology on American society, then U.S. competitiveness and innovation inevitably will be undermined at the very time they are being seriously challenged by China, India, and others.

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Description automatically generatedOf course, many things changed in the technology industry during 2022. Steep share price declines, mass layoffs, Elon Musk’s purchase of Twitter, the subsequent release of the so-called “Twitter Files,” and the scandal at FTX reshaped much of the digital conversation. As we wrote about in June, the power—and fear—of Big Tech peaked during the pandemic when much of the world needed to operate virtually.[1] But although the tumultuous events of the last six months have drowned out many long-standing tech fears, the core accusations haven’t gone away and could easily resurface once more stable times return. In this series summary, we recap our work so far, and outline three areas where the technology industry could substantially improve its image over the coming years. If there is any upside to the current tech downturn, it’s that it has given the industry time to reposition itself politically and socially for its next phase of growth.

Leading Digital Mythologies

Here are the 12 myths that we challenged in 2022, listed in the order they were published:[2]

1. Online services are the dominant source of societal misinformation.

2. Technology is destroying individual privacy.

3. Hi-tech antitrust interventions are both necessary and warranted.

4. Big Tech makes too much money off of “our” data.

5. AI systems are inherently biased.

6. Today’s tech giants face no real competition.

7. Automation destroys more jobs than it creates.

8. The tech industry discriminates by race and gender.

9. Online services are the primary cause of societal polarization.

10.Technology is the main driver of income inequality.

11.Digital technology is uniquely and dangerously addictive.

12.Artificial intelligence is improving much faster than our ability to manage it.

Again, we aren’t saying that there are no serious concerns in these areas, nor that policymakers have no role. All of these issues are complex and come with potential risks. But the constant claims about technology destroying jobs, ending privacy, ripping off consumers, and manipulating behavior are so exaggerated that it often seems as if politicians, regulators, pundits, traditional media, and academia are using technology as a convenient scapegoat for just about every societal ill. Additionally, it hasn’t helped that the technology industry has done little to push back against these charges. For example, during their many congressional appearances in recent years, the leading Big Tech CEOs mostly acknowledged their shortcomings and promised to do better. While trying to be conciliatory is an understandable tactic, this approach has ceded way too much ground. The longer these myths go unchallenged, the more entrenched they become—and the more assertive tech’s adversaries can be. At some point, the conventional wisdom becomes almost impossible to overturn.

Moreover, pushing back against the accusations of the boom years is only half of today’s public relations challenge. There are at least three forward-looking areas where the technology industry should seek to earn the broad political and public support needed to overcome barriers in many important areas. Although ITIF is reluctant to make blanket statements about what the highly diverse tech industry should or shouldn’t do, progress in these areas would surely help in accelerating the rate of American innovation.

Aligning With the National Interest

Of all the challenges facing the technology industry, none are more complicated than how to address the rise of China. The story is now all too familiar. When China joined the World Trade Organization in 2001, multinational corporations saw both a huge new market and a major new source of low-cost manufacturing. They—and most of Washington—largely ignored concerns about job losses at home, economic dependency, and human rights abuses because the short-term business results were so good. Their basic approach was: “We adhere to the laws of all the nations we do business in, and, given these laws, we decide what’s in our company’s best interest.” This has been the underlying philosophy of globalization, and for some 20 years it was very successful financially. Like many political and thought leaders, CEOs hoped that societal concerns about China would diminish over time.[3]

But of course, that hasn’t happened, and these days unrestricted globalization has far fewer proponents. Although China is still a giant market and an essential source of supply for many U.S. firms, those short-term benefits are increasingly outweighed by long-term concerns about China as both a business and military competitor. This is making the country-neutral mindset of globalization less and less viable, especially in technology-related markets. Chinese companies have long been required to support the Chinese state. America won’t and shouldn’t go this far legally; however, U.S.-based companies will be increasingly expected to take more account of their home nation’s concerns. There are at least three areas where Silicon Valley should be less global and more American going forward:

Via the CHIPS and Science Act of 2022, the federal government is seeking to bring advanced semiconductor manufacturing back to the United States in order to reduce today’s almost total dependency on Asian suppliers. It’s important for the tech industry to assist such efforts from both a policymaking and business operations perspective. Apple’s, Nvidia’s, and AMD’s support for TSMC’s chip-making investments in the United States is a good start, but ongoing federal, state, and local government support will be much easier to sustain if the industry proactively pushes for policies that strengthen America’s national interest.

The Biden administration’s recent bans on exporting advanced chips, tools and components to China marks a sea change in U.S. technology policy, and China will likely retaliate in some significant way. Although today’s heightened U.S.-China tensions could adversely affect numerous short-term business interests, America’s big tech players need to adhere to these policies, not undermine them. It’s a major new phase in the “following the laws of the countries we do business in” philosophy.

Many left-leaning staff in Silicon Valley have long been reluctant to work on military projects, and the Defense Department has long struggled to work well with fast-moving tech firms. But as advanced chips and AI become critical to military competition with China and Russia, the need for Big Tech and the U.S. military to work together can no longer be ignored. DOD’s recent awarding of the ominously named Joint Warfighting Cloud Capability (JWCC) contract to Amazon, Microsoft, Google, and Oracle may symbolize an important new cooperative phase.

Pursuing Ideological Balance

As the recent midterms have confirmed, America remains a sharply divided country—about as close to 50/50 as possible. However, as the Twitter Files have reinforced, there are many examples of the tech industry not being 50/50. Blocking hate speech and identifying misinformation is inherently difficult on platforms designed to be open, and corporations have every right to manage potential risks and excesses as they see fit. Yet even the biggest tech firms need to be humble about their ability to fairly determine which content should be banned or suppressed, and bend over backwards to be politically evenhanded in any such efforts.

This Twitter clearly failed to do. By banning mRNA pioneer Dr. Robert Malone for questioning the safety of vaccines, the satirical site The Babylon Bee for giving a transgender woman a man-of-the-year award, and even the president of the United States for whom 74 million Americans voted—while also shadow banning, among many others, Stanford Medical School Professor Jay Bhattacharya for warning about the impact of lockdowns on children, Twitter alienated much of the country and political class.[4] But although Twitter’s actions are understandably getting most of today’s attention, Alphabet and Meta have struggled with similar issues. PayPal’s actions have been particularly blatant; by freezing with little or no explanation the accounts of individuals and organizations who financially supported the Canadian truckers and others, it has shown us how a privatized version of China’s social credit system could someday work.[5]

Hopefully, the ever-changing scientific consensus regarding the origins of COVID-19, the impact of lockdowns and the side effects of vaccines, as well as the way social media companies were duped and pressured into blocking the Hunter Biden laptop story, and the historic malfeasance at the supposedly altruistic FTX will make tech firms question their ability to be successful arbiters of truth and goodness. And to be fair, many traditional media organizations have made similar mistakes without exhibiting any real intention to change. But to avoid being seen as politically biased, the tech industry must find a way to be much more content-neutral even if their companies’ employees remain overwhelmingly liberal. However, as we have seen with Twitter, the resistance to change will be fierce, and whether Elon Musk’s chaotic interventions will ultimately succeed in creating a town square that is safe, stable, and fair is far from certain.

Fortunately, there are signs that a more balanced digital world may be emerging. In addition to the revelations of the Twitter Files, the growing success of independent platforms such as Substack, the currently reduced fears of coronavirus, the backlash against PayPal, and Big Tech’s need for Republican support to fend off the Journalism Competition and Preservation Act (JCPA) and other interventions might all help restore a sense of neutrality that is more in keeping with the Internet’s open—and often libertarian—roots. However, many emotional hearings, accusations, threads, op-eds and internal company debates surely lie ahead.

Fulfilling Societal Promises

The great success of the technology industry thus far has been in the consumer sector—web browsing, messaging, social media, e-commerce, search, media, maps, apps, and so on—as well as in cloud computing, which has transformed data processing into a utility-like service. However, Big Tech has been much less successful in fulfilling many of the grand promises of the information age—such as more effective and less expensive health care and education, cleaner and more efficient cities and grids, smart products and services, using automation to bring jobs back to the United States, creating a more sustainable and circular economy, precision farming, 3D printing, new materials, and more. Some of this lag has been due to incumbent resistance and regulatory challenges, some due to the complex nature of these systems, yet the promise and opportunity remains.

If the digital world is to have a second act as great as its first, it will be because it successfully addresses these fundamental societal needs. Thus far, information technology has helped us stay connected and entertained, and the public has highly valued these services. But should information technology make the world healthier, smarter, safer, cleaner, and more sustainable, the level of support would be much deeper and long-lasting. Whether the challenge is effectively competing with China, reducing political polarization, or meeting the critical requirements of the 21st century, the goals of the technology industry and those of America overall should be increasingly aligned. This creates important opportunities to turnaround today’s overly negative Big Tech perceptions and keep the digital industry at the forefront of U.S. innovation, competitiveness, and prosperity.

About This Series

ITIF’s “Defending Digital” series examines popular criticisms, complaints, and policy indictments against the tech industry to assess their validity, correct factual errors, and debunk outright myths. Our goal in this series is not to defend tech reflexively or categorically, but to scrutinize widely echoed claims that are driving the most consequential debates in tech policy. Before enacting new laws and regulations, it’s important to ask: Do these claims hold water?

About the Author

David Moschella is a non-resident senior fellow at ITIF. Previously, he was head of research at the Leading Edge Forum, where he explored the global impact of digital technologies, with a particular focus on disruptive business models, industry restructuring and machine intelligence. Before that, David was the worldwide research director for IDC, the largest market analysis firm in the information technology industry. His books include Seeing Digital—A Visual Guide to the Industries, Organizations, and Careers of the 2020s (DXC, 2018), Customer-Driven IT (Harvard Business School Press, 2003), and Waves of Power (Amacom, 1997).

About ITIF

The Information Technology and Innovation Foundation (ITIF) is an independent, nonprofit, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy. Recognized by its peers in the think tank community as the global center of excellence for science and technology policy, ITIF’s mission is to formulate and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress. For more information, visit us at www.itif.org.

Endnotes

[1].     David Moschella, “The Power of Big Tech Peaked During the Pandemic; Disruptive Forces Are on the Rise” (ITIF, June 2022), https://itif.org/publications/2022/06/01/power-big-tech-peaked-during-pandemic-disruptive-forces-are-rise/.

[2].     “‘Defending Digital’ Series,” ITIF, https://itif.org/publications/2022/01/10/defending-digital-series/.

[3].     Robert D. Atkinson and Stephen Ezell, “False Promises: The Yawning Gap Between China’s WTO Commitments and Practices” (ITIF, September 2015), https://itif.org/publications/2015/09/17/false-promises-yawning-gap-between-chinas-wto-commitments-and-practices/.

[4].     Bebe Nicholson, “Here Are Some of the People Twitter Has Suspended,” Medium, May 1, 2022, https://medium.com/the-partnered-pen/here-are-some-people-twitter-has-suspended-1cb159091070.

[5].     Rupa Subramanya, “What the Hell Happened to PayPal?” The Free Press, December 13, 2022, https://www.thefp.com/p/what-the-hell-happened-to-paypal.

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