Interrupt Disruptors on the Internet

Interrupt Disruptors on the Internet

After a decade of unchecked growth — when it seemed like a new billionaire was being created every day — the tech industry has finally hit a rough patch. Elon Musk’s erratic behavior after his takeover of Twitter has left the leveraged platform in a precarious state. The sudden implosion of crypto exchange FTX vaporized a company that was recently valued at US$32 billion (1.1 trillion baht), taking many other crypto businesses with it. Meta (Facebook) is laying off 11,000 people, 13% of its workforce, and Amazon is laying off 10,000.

What are we supposed to do with these setbacks? Are these isolated incidents or signs of structural change?

Twitter was already in trouble. After getting into debt and overpaying it, Mr. Musk immediately began cutting costs, saying the company was losing $4 million a day. His first layoffs wiped out 80% of the company’s contractors and half of its permanent staff.

He then reversed bans on thousands of far-right provocateurs, as well as ending enforcement of rules against “harmful disinformation” about Covid-19. Many advertisers have suspended their campaigns to prevent their brands from being associated with toxic content. As I write, Twitter is in chaos.

As the second-largest crypto exchange, FTX came out of nowhere, built a huge public profile, and then exploded — all in the span of a few years. The ripple effects are being felt in the crypto industry.

Meta’s layoffs reflect the company’s stalled growth after a meteoric 17-year run. Young people embraced TikTok, undermining the growth of Meta’s Instagram platform, and Apple introduced a tool that allows iPhone users to opt out of sharing data with platforms like Facebook and Instagram, costing Meta up to $12.8 billion this year. Meanwhile, Meta CEO Mark Zuckerberg has made a huge gamble on virtual reality, attempting to create a general-purpose operating system for an industry that doesn’t yet exist. The company has already spent $36 billion on this vision, with little to show for it.

I believe the global economy is in the early stages of a structural shift that will leave the tech industry – the biggest beneficiary of the previous economic regime – particularly vulnerable to disruption.

Russia’s invasion of Ukraine changed everything, catching most businesses and even governments off guard. I believe he will be remembered as the trigger that ushered in a new economic era, with interest rates, inflation, geopolitical tensions and instability at significantly higher levels than in the past decade. . There has been a loss of trust between the great powers.

For technology, a new economic environment presents both challenges and opportunities. Many technology companies will not recover from this. The best days of Crypto, Twitter and Meta seem to be behind them. Other tech companies, likely including Amazon and Apple, will recover, but perhaps more slowly than they would like.

New opportunities will emerge. Companies that restructure manufacturing and supply chains will need technology, and the demand for technology-enabled automation will likely increase. And as consumers adapt to new economic realities, they will benefit from a range of applications and services that do not exist today.

While it might be too much to ask, policymakers should seize this moment to steer the tech industry in more desirable directions. For years, the industry has weakened democracy, undermined public health and compromised public safety. To the extent that policymakers have done anything to rein in the industry, they have focused on privacy and competition — efforts that have accomplished too little and come too late.

The attention of policymakers and regulators should shift from symptoms to root causes: namely, culture, business models and industry structure. The culture of the industry is hyper-focused on speed, scale and profit with no regard for consumer safety.

Similarly, the business model of “surveillance capitalism” is an assault on human autonomy analogous to child labor. And it’s an onslaught that has spread from internet platforms to many other industries.

Finally, the concentration of economic power in the tech industry prevents new ideas and business models from coming to market. With the current macroeconomic disruption, policymakers have an opportunity to make up for years of laissez-faire policies. Tech companies should be required to demonstrate security as a condition of market access. Surveillance capitalism must be banned. Monopolistic business practices should be banned and monopolies dismantled.

Protecting democracy, public health and public safety is good policy. It also happens to be the right thing to do. There will never be a better time.©2022 Syndicate Project

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