In the status quo, what short-term and long-term incentives do companies have to adopt humane design principles? Specifically, is there any economic incentive for companies to adopt these principles and to make their products less addicting? If so, what is it? If not, outside of overwhelming user demand, is there a way to create such incentives for those companies?
Dee Hock on Management principles might be available when you consider, for example, The Energy Miracle is here with the #BG_NS narrative.
I depends on which business a company derives the bulk of its revenues from.
Many types of business derive higher revenues from higher engagement, addictive behaviour, tricking people, tracking people, taking and abusing your private information such as contacts, and so on. These are typically companies that rely on the attention-based business model to bring “eyeballs” for greater advert revenue. Examples include all journalism, Google, Facebook, any media whether ad-supported or subscription-supported or even grant-supported. For both the short- and long- term, the incentive to adopt humane tech principles is negative, i.e. humane tech would harm these organisations’ profits in all time frames. However, in both the short and long term there is also a strong incentive to appear to be humane as this helps mask their bad behaviour with users, investors, the government and also their own employees. An example is Google’s motto “don’t do evil” and Facebook and Instagram’s recent “time well spent” which are probably just for show.
On the other hand in some tech organisations with different business models there really is an incentive to act in accord with humane tech principles both in the short and long terms. The classic example is Apple, which derives most of its revenue from selling hardware. In this case, aside from selling more hardware (planned obsolescence), forced ecosystem adoption (bloatware), and selling add-ons, some/many of the users’ interests are actually aligned with the company’s interests. There are many organisations that are mixed – incentivised to be humane in some ways but also don’t follow all humane tech principles. It depends on the business and their individual approaches!
Personally I think rather than expecting some of the worst players like Facebook to be able to reform themselves (they won’t as it’s against their economic interest), we can expect that users will hopefully awaken and gravitate away from these companies and either go offline or shift to radically different services. It’s up to us to help make that happen.
Please tell us if this second comment, that adds to my first one, highlights the importance of the topic Helping the Humane Tech and the #GlobalDebout communities mutually reinforce each other?
John Hagel III, in his just published HBR article 3 Kinds of Jobs That Will Thrive as Automation Advances foresees that making "products less addicting" is on the way of being dissolved (no need to be solved) when he says:
The use of ad-blockers is just one signal of a much more fundamental trend: the erosion of trust, not just in companies, but in all institutions. Many increasingly believe that institutions are not serving our interests.
Does the above means the success of the Human Tech community stage is here to stay and that we are going into a stage on what´s said, for example, in the post Let’s replace with institutional innovations for #GlobalDebout a rule-based disorder.
John Hagel responded to the tweet I shared:
The whole point of my work is to make the case that there is an economic imperative to adopt humane tech principles. This is not about doing the “right” thing - it’s about driving accelerating performance improvement.
I add this other What motivations are driving business leaders?
short answer is NO
I think it’s a little overly simplistic to presume that humane tech principles are a long term net negative for the adopters. The skeptic in me needs to have that proven. But I’m a hardcore systems thinker.
Extractive economies work quite profitably in the short term – and what we are talking about today is an extractive attention economy, every bit as extractive as strip mining and buzz-sawing through the Amazon rainforests. But are even those profitable practices sustainable? No. Just as attention-hoarding practices will be unsustainable in the way that many communities around the world no longer have fishing economies due to unsustainable exploitation.
There will always be bad actors seeking a fast buck: those looking to cash in quickly and steal as much as possible before disappearing to the next thing. But I do have hope there is room for sustainable business practices that do not threaten and destroy their user bases out of complete exploitation but instead seek a more stable medium where the economics for advertisers, publishers, and users finds a better balance. Those systems that do manage to find that sustainability are often co-creators of a future where no one motivation is overly weighted and creates major instability. And to achieve that requires a thoughtful collaboration of different actors who can see each of their own roles from within the system as a whole and how it is operating. They also need the recognition that major imbalances ultimately destroy it for all parties involved.
It might be too late for Facebook to pivot their growth mindset into this sort of shared future thinking, leaving space for replacements to do it faster and better and leaving them to irrelevance. What complicates that is that the history of dominant social platforms on the Internet going back to the 1980s have typically had a 6-7-year peak in the limelight before fading and being replaced by the next generation. Perhaps we’ve reached critical mass adoption enough to finally allow social platforms to think beyond 10+ years.
This is my fifth comment here. Contrary to your hope Alex (@Free), with very high likelihood users will not be able to awaken. According to the late W. Edwards Deming, users don’t innovate. Instead, as a social entrepreneur, also with very high likelihood, I propose that it will be the result of an institutional innovation where trust govern , rather than money.
Are you talking about the whole Wall Street?
Only partially. Day traders, people optimizing their market exposure to the extent that they are directly trying to (legally) manipulate it, etc. … all yes. There little is conferred in any sense of equity ownership other than as a convertible asset.
But Wall Street also includes investors who take more of a long-term approach to investing or use their investments to support companies and causes they ethically support.
Consumers are becoming aware that products built on the manipulation of their attention are generally, long-term harmful for them. The idea that “Facebook is a new smoking” is going to become common consious knowledge. Consumers will start to look for alternatives more and more proactively.
Producers of humane products will find new business models (mostly subscriptions (think Spotify, Netflix, Youtube Premium); Self-Sovereign money supply for core cooperation services (Validbook idea)) that can support humane products.
Sure I oversimplified, there is a full spectrum of types of companies. Some operate just via scams, others are completely aligned with users’ interests. But as I mentioned earlier, it depends on the business model.
Regarding your comments on very long term sustainability, I would guess it doesn’t matter as much as nearer term profits to most businesses because economic interest works on the principle of net present value. Here all future returns are reduced by an discount rate, so that returns closer to the present are worth much more than distant future returns.
Also businesses often externalise harms, meaning they create harms and pass them on to the rest of society without having to “pay” for the damage that they do. That means there is sometimes a net negative to society from a businesses’ activity. Avoiding this usually requires legislation regulating the external harm. But in the case of humane tech, that can be very complicated and intrusive by the government!
Just look at the EU’s attempt to fix the issues of privacy with GDPR and the Cookie Law. Both pieces of legislation were attempting to fix harms that business pass onto society. However in my opinion, both laws actually ended up doing much more harm to consumers and businesses that they did good. Now users see extremely annoying and misleading popups on every website and app they use and a relatively small reduction of privacy violations that isn’t worth all the mess and the tremendous expense of tens of billions of dollars.
Yes well said Greg. I think almost everyone has this hope. It’s a balancing act and is complicated to reconcile with mixed capitalist economics. We have some regulation, but as I demonstrated too much regulation causes harm. Thoughtful collaboration that benefits society rather than companies won’t happen in the business sphere, but that is the job of the nonprofit and government sectors. Ultimately there are both benefits and negatives of government getting involved to fix imbalances. Governments are usually glacially slow and can’t handle technology fast enough to make any difference – for example technology companies fined for monopolistic practices 10 years after the offence at which point the technology has changed so much and people are already using different services.
Nearer term profits matter most to most businesses, certainly. Especially for growing businesses that are cashflow constrained and looking for proof of hockey-stick revenue growth as soon as possible.
That said, net present value can be insufficient. Even if you flip the motivations to wanting to do longer-term competitive damage, it’s a common practice for the largest player in the market to undercut pricing as a means of winnowing out their competitors … opting for the potential for longer-term profits at the expense of the near term. (Look at the long game OPEC partners played against the many fracking companies in North America, for example.)
As for externalizing harms, that’s common and, well, it almost becomes financially irresponsible for companies NOT to do that when their competitors doing. There are probably a number of layers to address this of increasing cost, complexity, and impact. Starting from public awareness and information to local regulation to more global regulation. I would still like the reserve the possibility that even the actors causing public harm are self aware of their role and would like to see the “game” leveled up for themselves and their competitors, and that could require them participating in more of a systemic approach that collectively internalizes these externalities.
On the other hand intrinsic motivation is often more powerful than economics. We do things because we want to and we want to do good. Economics is just accounting and drudgery. What really motivates people and the businesses they create is some other motivation, the motivation to follow their dreams and to help others. Economics is a secondary motivator to that.
Hey, I had posed a similar question before. You might want to take a look here: Business model innovation
Absolutely! Btw, an interesting piece on how adherence to “homo economicus” merely leads to “misery thinking”: