Wednesday, 29 April 2015

* How Silicon Valley shapes our future

By Thomas Schulz
In the Silicon Valley, a new elite is forming that wants to determine not only what we consume, but also the way we live. They want to change the world, but they don't want to accept any rules. Do they need to be reined in?

The word on the street is that Travis Kalanick, founder and CEO of Uber, can be an asshole. He publicly insults the competition, mocks his own customers on Twitter and believes that politicians are incompetent. A top company executive even went so far as to suggest that journalists be spied on and Kalanick himself has said that it is as easy for him to seduce women as it is for others to call a taxi. In response to unhappy Uber drivers protesting poor pay, Kalanick predicted that they would soon be replaced by computers anyway.

Since December, Uber has been valued at $41 billion, not much less than Germany's largest financial institution, Deutsche Bank. It only took the company five years to spread from San Francisco to more than 260 cities in over 50 countries around the world. Every month, the company adds another couple of countries and a handful of cities to its portfolio.

Uber is a good -- no, a great -- product. Essentially carpooling at the push of a button, it is an extremely simple service and one whose implementation is technically brilliant and easy to use. In most parts of the world, Uber is not only cheaper than any taxi service on offer, but also better. The company says that 50,000 new drivers join Uber each month.

The fact that the boss isn't particularly nice shouldn't really matter that much, but things aren't quite that easy in this case. The company, after all, is a mirror image of its founder: aggressive, ruthless and overly ambitious.

After Portland, Oregon, banned the ride-sharing company from operating in the city late last year, Kalanick launched the service there anyway. The head of the local bureau of transportation was furious. "They think they can just come in here and flagrantly violate the law?" he asked. "This is really amazing. Apparently they believe they're gods."

There has been similar resistance in many other cities around the world, including in Germany, where Uber simply ignored court orders. For Kalanick, though, such skirmishes are small frays in a much larger war for supremacy. His "vision," as he calls it, sees Uber becoming a kind of global transportation service that will ultimately allow city dwellers to eschew owning a car. He sees it transforming into a mobility giant that doesn't just take people from place to place, but also goods -- at the click of a button and at the lowest price available. Ideally with a driverless vehicle.

But Uber isn't the only company with ambitions of taking over the world. That's how they all think: Google and Facebook, Apple and Airbnb -- all the digital giants along with the myriad smaller companies in their wake.

Their goal is never a niche market; it's always the entire world. But far from being driven by delusional fantasies, their objectives are often realistic, made possible by a potent cocktail unique in economic history: globalization combined with digitalization.

The technological advances made in the last decade have been breathtaking, but it is likely still just the beginning. The growth of new technologies, after all, has been exponential rather than linear, with ever larger advances coming at an increasingly rapid rate. It is like a gigantic avalanche that begins as a tiny snowball at the top of the mountain.

The iPhone only made its appearance seven years ago, but most of us no longer remember what the world was like before. Driverless cars were considered to be a crazy fantasy not long ago, but today nobody is particularly amazed by them. All the world's knowledge condensed into a digital map and easily accessible? Normal. The fact that algorithms in the US control some 70 percent of all trading on the stock market? Crazy, to be sure. But normal craziness.

Dozens of companies are trying to figure out how to use drones for commercial use, be it for deliveries, data collection or other purposes. Huge armies of engineers are chasing after the holy grail of artificial intelligence. And the advances keep coming. Machines that can learn, intelligent robots: We have begun overtaking science fiction.

The phenomenon is still misunderstood, first and foremost by policymakers. It appears they have not yet decided whether to dive in and create a usable policy framework for the future or to stand aside as others create a global revolution. After all, what we are witnessing is not just the triumph of a particular technology. And it is not just an economic phenomenon. It isn't about "the Internet" or "the social networks," nor is it about intelligence services and Edward Snowden or the question as to what Google is doing with our data. It isn't about the huge numbers of newspapers that are going broke nor is it about jobs being replaced by software. It's not about a messaging service being worth €19 billion ($21.1 billion) or the fact that 20-year-olds are launching entire new industries.

We are witnessing nothing less than a societal transformation that ultimately nobody will be able to avoid. It is the kind of sea change that can only be compared with 19th century industrialization, but it is happening much faster this time. Just as the change from hand work to mass production dramatically changed our society over 100 years ago, the digital revolution isn't just altering specific sectors of the economy, it is changing the way we think and live.

This time, though, the transformation is different. This time, it is being driven by just a few hundred people.

There is, of course, nothing new about powerful elites. Indeed, wealthy factory and oil barons dominated the 19th century. Later, it was bankers and hedge fund managers who felt called upon to grab control of the world's destiny -- a group that un-ironically called itself "masters of the universe". But their era is slowly reaching an end.

The new global elite are no longer based on Wall Street. Rather, they have their headquarters in Silicon Valley, the 80-kilometer (50-mile) long valley south of San Francisco. It is here that the chip industry got its start and where the computer age began -- and it is now where the leaders of the current digital revolution are located. They are founders and CEOs like Sergey Brin of Google, Tim Cook of Apple and Mark Zuckerberg of Facebook. They are more recent newcomers like Travis Kalanick of Uber and Joe Gebbia of Airbnb. They are angel investors who pump billions into up-and-coming tech companies. And they are all supported by an innumerable army of programmers, computer experts and engineers who are constantly seeking to replace an old concept with a new product.

The new "masters of the universe," though, are fundamentally different from their predecessors: Their primary focus isn't on money. They don't want to just determine what we consume, but how we consume it and how we live. They aren't trying to capture just one economic sector, but all of them. They aren't stumbling haphazardly into the future, rather they are ideologues with a clear agenda.

Indeed, aside from their astounding success, it is that ideology that makes them unique. The religion of Wall Street is money. But the religion of Silicon Valley goes much deeper. It is driven by substance; it is the unfailing belief in a message.

That message holds that technology can change humanity for the better. The people from the valley who hope to reshape the world fundamentally believe that their high-tech solutions will create a better future for all of mankind just as pious Hindus believe in reincarnation. But they are not interested in external interference. The Silicon Valley elite has little use for policymakers and considers regulation to be more than just a hindrance, they see it as an anachronism. Their message seems to be: If societal values such as privacy and data protection stand in the way, then we simply have to develop new values.

They see the roots of their technological crusade in the counterculture of the 1960s, the era that formed Apple co-founder Steve Jobs. But their worldview is a libertarian one, in the tradition of radical thinkers such as Noam Chomsky, Ayn Rand and Friedrich Hayek. The result is a unique political philosophy that combines esoteric hippie sensibilities with hardcore capitalism. And the Silicon Valley elite aren't reticent about their plans. They openly admit to wanting to shape the world in accordance with their ideas. And they are convinced that the changes we have already seen in recent years were nothing but the opening act.

Is their success preordained? Is the attempt to block Uber just as silly as the attempt to preserve the horse-drawn wagon was a century ago? Is now the time to impose regulation before the world falls into the hands of a digital monopoly? Or should we simply gratefully accept the high-tech solutions that are making our lives easier? Should we be afraid of a technological future or should we yearn for it as a path to greater prosperity?

There is also one more important question. Silicon Valley is a masculine world, one in which Yahoo CEO Marissa Mayer is the exception. Indeed, some start-ups don't hire any women at all and it is more difficult for female entrepreneurs to access funding. Can a global vision be so one-sided?

This much is certain: Over the coming years, we will have a global debate about what the framework for the digital future needs to look like. Those who wish to play a part in shaping the future need to understand how Silicon Valley leaders view the world and what they want. Four encounters with prominent thought leaders, protagonists of the technological elite open a window into that world.

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