During the recent Consumer Goods Forum global summit here in Cape Town, I had the opportunity to briefly chat with Michael about some of the issues confronting the digital disruption of this industry sector. [The original transcript has been edited for clarity and space.]
Michael Fertik founded Reputation.com with the belief that people and businesses have the right to control and protect their online reputation and privacy. A futurist, Michael is credited with pioneering the field of online reputation management (ORM) and lauded as the world’s leading cyberthinker in digital privacy and reputation. Michael was most recently named Entrepreneur of the Year by TechAmerica, an annual award given by the technology industry trade group to an individual they feel embodies the entrepreneurial spirit that made the U.S. technology sector a global leader.
He is a member of the World Economic Forum Agenda Council on the Future of the Internet, a recipient of the World Economic Forum Technology Pioneer 2011 Award and through his leadership, the Forum named Reputation.com a Global Growth Company in 2012.
Fertik is an industry commentator with guest columns in Harvard Business Review, Reuters, Inc.com and Newsweek. Named a LinkedIn Influencer, he regularly blogs on current events as well as developments in entrepreneurship and technology. Fertik frequently appears on national and international television and radio, including the BBC, Good Morning America, Today Show, Dr. Phil, CBS Early Show, CNN, Fox, Bloomberg, and MSNBC. He is the co-author of two books, Wild West 2.0 (2010), and New York Times best seller, The Reputation Economy (2015).
Fertik founded his first Internet company while at Harvard College. He received his JD from Harvard Law School.
Ed: As we move into a hyper-connected world, where consumers are tracked almost constantly, and now passively through our interactions with an IoT-enabled universe: how do we consumers maintain some level of control and privacy over the data we provide to vendors and other data banks?
Michael: Yes, passive sharing is actually the lion’s share of data gathering today, and will continue in the future. I think the question of privacy can be broadly broken down into two areas. One is privacy against the government and the other is privacy against ‘the other guy’.
One might call this “Big Brother” (governments) and “Little Brother” (commercial or private interests). The question of invasion of privacy by Big Brother is valid, useful and something we should care about in many parts of the world. While I, as an American, don’t worry overly about the US government’s surveillance actions (I believethat the US is out to get ‘Jihadi John’ not you or me); I do believe that many other governments’ interest in their citizens is not as benign.
I think if you are in much of the world, worrying about the panopticon of visibility from one side of the one-way mirror to the other side where most of us sit is something to think and care about. We are under surveillance by Big Brother (governments) all the time. The surveillance tools are so good, and digital technology makes it possible to have so much of our data easily surveilled by governments that I think that battle is already lost.
What is done with that data, and how it is used is important: I believe that this access and usage should be regulated by the rule of law, and that only activities that could prove to be extremely adverse to our personal and national interests should be actively monitored and pursued.
When it comes to “Little Brother” I worry a lot. I don’t want my private life, my frailties, my strengths, my interests.. surveilled by guys I don’t know. The basic ‘bargain’ of the internet is a Faustian one: they will give you something free to use and in exchange will collect your data without your knowledge or permission for a purpose you can never know. Actually, they will collect your data without your permission and sell it to someone else for a purpose that you can never know!
I think that encryption technologies that help prevent and mitigate those activities are good and I support that. I believe that companies that promise not to do that and actually mean it, that provide real transparency, are welcome and should be supported.
I think this problem is solvable. It’s a problem that begins with technology but is also solvable by technology. I think this issue is more quickly and efficiently solvable by technology than through regulation – which is always behind the curve and slow to react. In the USA privacy is regarded as a benefit, not an absolute right; while in most of Europe it’s a constitutionally guaranteed right, on the same level as dignity. We have elements of privacy in American constitutional law that are recognized, but also massive exceptions – leading to a patchwork of protection in the USA as far as privacy goes. Remember, the constitutional protections for privacy in the USA are directed to the government, not very much towards privacy from other commercial interests or private interests. In this regard I think we have much to learn from other countries.
Interestingly, I think you can rely on incompetence as a relatively effective deterrence against public sector ‘snooping’ to some degree – as so much government is behind the curve technically. The combination of regulation, bureaucracy, lack of cohesion and general technical lack of applied knowledge all serve to slow the capability of governments to effectively mass surveile their populations.
However, in the commercial sector, the opposite is true. The speed, accuracy, reach and skill of private corporations, groups and individuals is awesome. For the last ten years this (individual privacy and awareness/ownership of one’s data) has been my main professional interest… and I am constantly surprised by how people can get screwed in new ways on the internet.
Ed: Just as in branding, where many consumers actually pay a lot for clothing, that in addition to being a T-shirt, advertise prominently the brand name of the manufacturer, with no recompense for the consumer; is there any way for digital consumers to ‘own’ and have some degree of control over the use of the data they provide just through their interactions? Or are consumers forever to be relegated to the short end of the stick and give up their data for free?
Michael: I have mapped out, as well as others, how the consumer can become the ‘verb’ of the sentence instead of what they currently are, the ‘object’ of the sentence. The biggest lie of the internet is that “You” matter… You are the object of the sentence, the butt of the joke. You (or the digital representation of you) is what we (the internet owners/puppeteers) buy and sell. There is nothing about the internet that needs to be this way. This is not a technical or practical requirement of this ecosystem. If we could today ask the grandfathers of the internet how this came to be, they would likely say that one of areas in which they didn’t succeed was to add an authentication layer on top of the operational layer of the internet. And what I mean here is not what some may assume: providing access control credentials in order to use the network.
Ed: Isn’t attribution another way of saying this? That the data provided (whether a comment or purchasing / browsing data) is attributable to a certain individual?
Michael: Perhaps “provenance” is closer to what I mean. As an example, let’s say you buy some coffee online. The fact that you bought coffee; that you’re interested in coffee; the fact that you spend money, with a certain credit card, at a certain date and time; etc. are all things that you, the consumer, should have control over – in terms of knowing which 3rd parties may make use of this data and for what purpose. The consumer should be able to ‘barter’ this valuable information for some type of benefit – and I don’t think that means getting ‘better targeted ads!’ That explanation is a pernicious lie that is put forward by those that have only their own financial gain at heart.
What I am for is “a knowing exchange” between both parties, with at least some form of compensation for both parties in the deal. That is a libertarian principle, of which I am a staunch supporter. Perhaps users can accumulate something like ‘frequent flyer miles’ whereby the accumulated data of their online habits can be exchanged for some product or service of value to the user – as a balance against the certain value of the data that is provided to the data mining firms.
Ed: Wouldn’t this “knowing exchange” also provide more accuracy in the provided data? As opposed to passively or surreptitiously collected data?
Michael: Absolutely. With a knowing and willing provider, not only is the data collection process more transparent, but if an anomaly is detected (such as a significant change in consumer behavior), this can be questioned and corrected if the data was in error. A lot of noise is produced in the current one-sided data collection model and much time and expense is required to normalize the information.
Ed: I’d like to move to a different subject and gain your perspective as one who is intimately connected to this current process of digital disruption. The confluence of AI, robotics, automation, IoT, VR, AR and other technologies that are literally exploding into practical usage have a tendency, as did other disruptive technologies before them, to supplant human workers with non-human processes. Here in Africa (and today we are speaking from Cape Town, South Africa) we have massive unemployment – varying between 25% – 50% of working age young people in particular. How do you see this disruption affecting this problem, and can new jobs, new forms of work be created by this sea change?
Michael: The short answer is No. I think this is a one-way ratchet. I’m not saying that in a hundred years’ time that may change, but in the next 20-50 years, I don’t see it. Many, many current jobs will be replaced by machines, and that will be a fact we must deal with. I think there will be jobs for people that are educated. This makes education much, much more important in the future than it’s even been to date – which is huge enough. I’m not saying that only Ph.D.’s will have work, but to work at all in this disrupted society will require a reasonable level of technical skill.
We are headed towards an irrecoverable loss of unskilled labor jobs. Full stop. For example, we have over a million professional drivers in the USA – virtually all of these jobs are headed for extinction as autonomous vehicles, including taxis and trucks, start replacing human drivers in the next decade. These jobs will never come back.
I do think you have a saving set of graces in the developing world, that may slow down this effect in the short term: the cost of human labor is so low that in many places this will be cheaper than technology for some time; the fact that corruption is often a bigger impediment to job growth than technology; and trade restrictions and unfair practices are also such a huge limiting factor. But none of this will stem the inevitable tide of permanent disruption of the current jobs market.
And this doesn’t just affect the poor and unskilled workers in developing economies: many white collar jobs are at high risk in the USA and Western Europe: financial analysts, basic lawyers, medical technicians, stock traders, etc.
I’m very bullish on the future in general, but we must be prepared to accommodate these interstitial times, and the very real effects that will result. The good news is that, for the developing world in particular, a person that has even rudimentary computer skills or other machine-interface skills will find work for some time to come – as this truly transformative disruption of so many job markets will not happen overnight.