You know that feeling when you roll your car into the repair shop? You might not understand how all the parts work, but you have to trust your auto mechanic — after all, they’re the expert, and cars are getting more and more sophisticated. But sometimes, it’s difficult to tell whether you’re getting sound advice or a raw deal.
This is often paralleled in the relationship between the technology industry and government, according to some of tech’s top brass including Microsoft President, Brad Smith. The issue is that both sides sometimes feel like the outfoxed customer. In early November, Smith took to the stage of Web Summit, Europe’s largest tech conference, speaking about how their industry and government regulators, particularly those in the U.S., could work together to find mutual understanding and a common ground for the pace of business.
Sam Schechner, a tech correspondent for the Wall Street Journal, conducted the live interview on stage in Lisbon, Portugal, titled “How global companies need to earn trust locally to succeed in a cloud services world.” For a conversation set to discuss cloud computing, the talk veered more towards addressing this growing gap along with the potential for future regulation to safeguard data for both businesses and citizens.
Bridging the gap: An optimistic future
Back in the 1990s, few people would have had a basic understanding of today’s common technology. But only two decades later, those same people carry the industry’s products with them everywhere they go and communicate using tech tools they’d have never dreamed of before.
Smith recalled a story from 1998, when he had to defend the size and influence of Windows (Microsoft’s now famous operating system) in an anti-trust case. Smith realized that the elected officials involved in the case didn’t understand how quickly things were going to change in the industry.
During the case, Smith made two tech predictions that the people involved, including journalists covering the story, never believed would come true.
“The first was the proposition that there would be a device that was a phone that would compete with a laptop,” he said. “The second was that countries like China and India would develop a large software sector.”
It’s almost comical now in hindsight, but even though people have caught up to the reality of today’s technology, there are new gaps that have formed. Smith still pointed out that the gap between the pace of technological innovation and the speed of government continues to grow.
The fast pace of tech
Overall, Smith was still optimistic about the future relationship between tech and government. Everyone today, from technicians to politicians, is seeing their lives become more integrated with technology.
The reality, as described in the talk, is that the tech industry is built on speed, and failure is often considered a realistic possibility. In fact, failure can also be a desirable outcome — since it can accelerate the pace of innovation in many instances.
Smith pointed out that government, on the other hand, operates with a different approach. Decisions and projects are often studied, tested, predicted and approached much more slowly through their process. The intention is to ensure a level of accountability, fiscal responsibility and transparency.
According to Smith, as the world becomes more reliant on digital technologies, however, the two need to find a mutual pace to ensure that regulation keeps up with innovation, and that governments themselves are able to utilize all the tools at their disposal.
Europeans stepping ahead
While the U.S. government is challenging the tech industry, Smith did applaud the European Union’s implementation of the General Data Protection Regulation, or GDPR.
The bill, which goes into effect in 2018, is designed to protect EU citizens’ privacy by enforcing standards of data protection. According to these new rules, “the GDPR not only applies to organisations located within the EU but it will also apply to organisations located outside of the EU if they offer goods or services to, or monitor the behaviour of, EU data subjects.”
Though many in the industry felt the standards were too restrictive, Smith believes they will ultimately help build transparency and trust between the tech industry and customers.
“Overall it’s a step forward, because for all of us that depend on the web and depend on data, what we really depend on is the trust of people using our services,” he said. “If we really want to maintain the trust of people, being able to assure them that there’s a regulatory structure and there’s regulatory oversight is not a bad thing.”
While the regulatory oversight largely impacts EU member nations, Smith says it will quickly become a global standard, as most international companies are unable to build multiple data privacy architectures.
“Do we want to have one privacy architecture in Europe and a different privacy architecture outside of Europe? No way. That just makes life way too complicated,” he said. “The engineering resources are too scarce, the business process complexity is too great. We’re going to create one architecture.”
Both groups have important responsibilities
Back to North America, the responsibility doesn’t lie entirely on one person or group’s shoulders.
Smith believes that the U.S. tech industry needs to do a better job explaining how it operates, adding that transparency will ultimately strengthen the relationship with both government and users. Addressing the recent hearings that brought representatives from the biggest tech firms to Washington, he believes the attention has focused on the tech industry because of their growing influence in daily life.
“These inquiries are not actually about whether these companies are too big, it’s about whether they’re using their market power to compete fairly; they’re about the definition of what fairness means,” said Smith. “If you are big and successful, you need to get used to dealing with those questions.”
While Smith believes those questions are fair, he also believes that governments need to be committed to outlining clear expectations. “This is where I think we all come together as a technology community, as a community of entrepreneurs.”