Algorithms are capable of increasingly precise analyses of collected data and transferring them into applications used by the general public, companies, and governments. These are powerful instruments we hold in our hands. They’re efficient and make very few mistakes.
But with power comes great responsibility. This technology allows a previously unheard-of level of control and monitoring of society as a whole, providing deep insights into our private lives. And it can be used to manipulate opinions and environments and cause division and inequality. The question is how to harness its power without restricting freedom, creativity, and innovation. It should be treated as an opportunity to create a better world, not a path to the apocalypse.
The Otto Group therefore wants an interdisciplinary discussion of how to handle digitisation responsibly. After all, it’s no less than a digital transformation that, at its best, will be of great use to people and open up a new chapter in this field. The three following contributions from the Otto Group Annual Report 2018/19 consider what this could look like and what is needed for it to become reality.
Digitisation is fundamentally changing social and economic relationships. We’ve known it for a long time, but the question of how we handle this change is far from being answered. I think a good approach would be to look at it from a value-conservative and structurally creative perspective. Meaning that a company should constantly be thinking about what values it wants to create with its economic activities – whether, for example, integrity, respect, social cohesion, and ecological sustainability are part of its DNA – and whether these will remain its anchor as relationships change.
The challenge here is to adapt structures creatively instead of just throwing your values overboard in order to maintain business models. It’s also important to make the ideologically charged discussion about the interaction between state and company more objective. After all, markets are also man-made structures. They should enable market players to act in a responsible and sustainable manner but should have nothing to fear about remaining competitive. However, these days, there are significant competitive advantages for companies that externalise the costs of pollution and social security. And markets have a tendency towards the concentration of power, as shown by research into complex systems and a simple glance at the digital market. The latter is controlled by only a few people who set the rules, such as how data will be handled or what direction the development of working standards will take.
That’s why we ultimately need a non-ideological discussion about how industrial policy, competition policy, fiscal policy, competition law, and labour law should look like in the 21st century, in order to steer innovation and investment energy towards sustainable solutions and business models.
It won’t work without state regulation. At the end of the day, someone has to decide who gets access to what and under what conditions. Deregulation primarily means that this decision-making authority is transferred from the state sphere to the private sphere. And naturally someone who is profit-orientated will act very differently compared to someone who is more interested in the common good. We are seeing a concrete example of this today in the way data is being handled. It is being described and treated as a resource or goods item, because it is profit-orientated companies in particular that are collecting mass data and making decisions about its use.
But what data should belong to whom? Why and under what conditions? I can’t keep track these days of who’s doing what with my information where and for what price. And that’s just one of many questions that we need new answers to, not only in terms of finances, but also in terms of ethical, social, and ecological consequences.
I would welcome the creation of a space like the one the Otto Group is planning, where there can be open, honest, and transparent discussions between the state sector, civil society, and the private sector about the fact that we need to rethink regulation creatively in many areas in order to maintain our values in the global digital business.
From the wheel to the steam engine to AI: technological innovation is always more than just an update of current conditions at every level. It always also requires social, cultural and economic change – change for society as a whole. It requires every social player to take up a position: where do we stand in times of radical change?
It’s long become a platitude, the fact that digitisation would be accompanied by such radical changes. But even experts these days are surprised by the established status quo that has crept up on us. Practical service providers, social networks, cloud companies, and trading platforms have gradually become a definitive part of digital infrastructure. Today, corporations that monopolise and commercialise the most private of data have a huge influence on the digital revolution and changes to companies. The value DNA of these companies, their conceptual anchoring in systems designed for maximum growth and control – China and the USA – must inevitably lead to conflict. Europe has long held back with its own designs for a digital future.
It was too tempting to view digitisation primarily as a productivity-increasing update for the economy. It was too great a challenge to formulate a picture of the future for the many that offers more than risk avoidance and the hasty copying of strategies perceived to be successful.
However, the current level of debate – from newspaper articles to Executive Boards to the European Parliament – makes it clear that acceptance of monopolising and commercialising data corporations has reached its limits. A need for viable, European alternatives has manifested itself.
This is where companies such as the Otto Group can play a key role. Corporate Digital Responsibility understands how fundamentally digitisation is changing society as a whole. It takes a critical look at corporate roles and encourages social debate. The question “How will we live?” in relation to the opportunities and consequences of the digital revolution can only be answered if all the relevant political, cultural, and economic players come together to discuss it.
Space to explore new possibilities is also opening up in direct corporate action. Value-based, responsible digital business models could turn European value awareness into a real competitive factor. One major requirement here is a new sustainable concept of growth that places the wellbeing of society above quarterly profit across every generation.
From this position, we will be able to work out principles for how we each handle data-based services and products and come up with a joint design for a European digital market economy.
Without wishing to trivialise the issues, it is ultimately a question of transformation performance. The will is there. A start has been made.
Companies have to not only do their best to make a profit, but also be aware of their social responsibility. For decades, the history of the Otto Group has been shaped by the aim of making the environment and society a concrete part of corporate objectives and backing this up through major sustainable initiatives. Sustainability is at the heart of our idea of modern business. It applies to the way we treat our planet, our commitment to society, and, not least, to the way we treat our employees, who expect job security, fair treatment, and opportunities to unlock their potential.
This fundamental attitude is more important than ever today. Not just because our climate is changing in an worrying way, but also because digital transformation is causing an upheaval that is completely rewriting the rules of our lives and our business. But we are not just going to give up on our values. We are conservative in the classical sense. But we understand that this isn’t enough. We need to work on creating new framework conditions for a social, digital market economy. It’s im por ant for our customers to feel safe, not as if they have to surrender their private information in order to receive good service. And other companies that sell their products on our platforms should be able to rely on the fact that we are a reliable partner who won’t exploit our market power to their disadvantage by making conditions increasingly unfair.
The only thing is: if we do that, it does not mean that other companies feel obliged to create a similar moral code. And this would give rise to the question of whether this shouldn’t be mandatory for every company with a certain framework. After all, shouldn’t the same rules apply to all? Rules that not only use the new technologies to generate high profits, more efficiency, and speed, but also benefit people and society as a whole. But it’s not enough just to discuss if, how and when this is possible. That’s why we recently set up a Corporate Digital Responsibility initiative with the aim of getting various players from the economic, academic, political, media, and civil sectors together to drive forward the digital socio-ecological market economy.
We want to make the digitisation discussion more objective, leaving behind the scaremongering and clashes between state and business. It’s about leveraging the opportunities of digitisation, minimising risks, and further advancing our free democratic social order within this framework. It must be possible to be innovative while still acting in line with reasonable philanthropic values.
It’s clear to us that we can’t do this alone. That’s why we want to join up with partners from – where possible – every European country to find a new way through this, ending up with a European form of a digital market economy. It’s about time.