The Innovation Paradox: Our Hopes and Fears

by JenniferCobb on 04/13/2011

Innovation is the lifeblood not only of much of our economic and personal well-being, but of our forward motion as a species.  Our capacity to grow and change is what makes us adaptive, what enables us to survive and thrive on a planet that is not always hospitable to our needs.  The human drive to innovate is one of our greatest blessings, and an ongoing source of hope for us and our world.  On the flip side, innovation can go terribly wrong, generating unintended and overlooked consequences that can have significant negative impact.  When that happens, it can be a source of tremendous fear.  Was Mark Zuckerberg thinking about activists in Iran being tracked down and tortured by their government when he baked into Facebook the requirement that all members use their real names?  Should he have thought about it?

When it comes to digital technology, innovation and privacy represent the polar opposites of our hopes and fears.  Innovation and privacy are often framed as locked in a battle for control of our hearts and minds.  The first seeks an unfettered, open and rule-less environment while the other thrives on rules and regulations that channel activity in particular ways.  The hope among many thoughtful people is that we can find a way to harvest the creativity in this tension so that the demands of both are honored.

The Privacy Fear

There is something essentially human about the capacity to go about our lives without the fear of being tracked, observed and monitored.  Privacy is about our freedom to choose when we are seen and by whom.  It is central to our capacity to be in solitude, to be autonomous, to be intimate with one other.  When we lose the capacity to differentiate between our private and public lives, we lose much of what it means to be human.

As more and more of our lives migrate to digital environments, we are increasingly at risk of losing our privacy.  Amazon knows what books we purchase.  Facebook knows where we live, what we like and who our online friends are.  Google knows what websites we visit, what we click on when we get there, how long we stay and where we go next.  The smart grid is starting to monitor our energy usage, revealing when we are taking showers, washing our clothes, or away for the week.

These issues are poised to heat up even further, very soon.  According to Kevin Kelly, Cisco estimates traffic over the Internet will exceed 667 exabytes by 2013, quintupling from 2009 levels.  Much of that traffic will be generated not by people, but by things.  Cisco predicts that by 2012, one trillion devices will be connected to the Internet.  The so-called Internet of Things is quickly coming online as objects from appliances to cars to clothes are tagged with small RFID tags that have the capacity to transmit data about their status, and about us as their “owners”.  This “ambient intelligence” will have the capacity to know more about us than ever before in human history.  Our fearful reaction to this vision is natural and normal.  The notion that it can develop unhindered is scary stuff.

But not everyone is afraid.  Those least afraid are those with the greatest investment in the unfettered power of innovation.  Mark Zuckerberg, who has benefited enormously from the open sharing of much very personal information, argues that our social norms around privacy are changing and soon we just won’t care that much about it anymore.  In a now-infamous interview with TechCrunch last year, he stated, “In the last 5 or 6 years, blogging has taken off in a huge way and all these different services that have people sharing all this information. People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people. That social norm is just something that has evolved over time.”  And, he continued, “We view it as our role in the system to constantly be innovating and be updating what our system is to reflect what the current social norms are.”

One of the problems with this argument is that in many ways Facebook is creating these new norms, not following them.  It is all too easy for tech entrepreneurs to get so dazzled by their own creations that they fail to see beyond the boundaries of their inventions.  The need to invent becomes the primary driver, leading to serious myopia.  In Zuckerberg’s case, he seems to be misreading the dominant zeitgeist around this issue.  Numerous studies show that both young and older adults care deeply about protecting their online information and want to be asked for permission before it is shared with applications or companies.

On the Flip Side:  The Value of Innovating from Shared Information

Too much privacy can lead to its own set of problems.  Farhad Manjoo of Slate argues that consumers reap untold benefits from tech companies like Google that watch what we do and provide us the services we want as a result.  Manjoo points out that the collection of anonymous data by companies such as Google enables “innovations that wouldn’t be possible without our personal data. This is especially true when it comes to anonymous data—information that can’t be used to identify you, but which serves as the building blocks of amazing things.”  What are these “amazing things”?  His examples include the automatic spell checker in Google’s search engine that “knows” what you are looking for and services such as Flu Trends, an application that seeks to predict outbreaks of flu based on an uptick in Google searches on flu related issues.  While I am not wowed by his examples, he does make a good case that the companies that mine our data do use it to innovate and create new products and services, some of which we have come to depend upon.

Another take on the value of sharing is noted by Bruce Schneier, a security expert, who points out that when it comes to intelligence operations and battling terrorism, “sharing is far more important than secrecy.”   Intelligence professionals need open lines of communication that can make connections between highly disparate streams of information.  He argues, “What we need is an intelligence community that shares ideas and hunches and facts on their versions of Facebook, Twitter and wikis. We need the bottom-up organization that has made the Internet the greatest collection of human knowledge and ideas ever assembled.”  In other words, openness can be safer in the long run.

Seeking a Balance

How can we reach a balance between innovation and privacy, the need to share and the need to protect?  One promising approach, currently being embraced by businesses, consumer groups and the Federal Trade Commission is Privacy by Design (PbD). This approach, pioneered by Ann Cavoukian, Information and Privacy Commissioner of Ontario, is “the philosophy of embedding privacy proactively into technology itself – making it the default.”  This approach puts the responsibility on companies to build privacy into applications and services from the outset and could include things like a privacy wizard that would step consumers through choices when a new program is installed.  Regulators in this paradigm become a second line of defense.  Cavoukian explains that the foundational principals of PbD “can help companies innovate in ways that are consistent with Fair Information Practices (FIPs).”  The seven principles are:

♦  Proactive, not Reactive; Preventative, not Remedial
♦  Privacy as the Default
♦  Privacy Embedded into Design
♦  Full Functionality – Positive-Sum, not Zero-Sum
♦  End-to-End Lifecycle Protection
♦  Visibility and Transparency
♦  Respect for User Privacy

To date IBM, Sun Microsystems, Hewlett-Packard and Microsoft have begun to integrate Privacy by Design into their product development processes.  Facebook and Google — the young, highly innovative giants — are notably absent.  In fact, on March 30 of this year, the Federal Trade Commission entered a proposed administrative consent agreement with Google over their alleged misuse of user data during the launch of the now-abandoned Buzz social network.  The Bureau of National Affairs reported, , “Privacy and e-commerce attorneys told the Bureau of National Affairs that the enforcement action also serves notice that the FTC considers privacy by design to be more of a compliance requirement than a guiding principle.”

Many privacy advocates argue that privacy protections are good business.  These protections ensure that companies build trusted relationships with their customers and keep them coming back for more.  Privacy can be a competitive advantage.  This makes sense conceptually, but I worry when the two biggest companies that continue to innovate and grow at the expense of privacy, Google and Facebook, are so embedded in our daily lives that the switching costs of not using them are simply too high for most of us.  They seem to have us over a barrel.

Striking a balance between innovation and privacy is a critical and deeply difficult issue and cannot be left up to the private sector to get right. Private companies are driven by motives that do not necessarily fit with the needs and values of individual privacy.  Nor can it be left solely up to government to regulate.  Government oversight is an important element, but with the inherent challenges of imperfect information and the slow time frame that government moves within, it is all too easy for the private sector in this space to do end runs around regulation.  The solution is not yet clear.  What is clear is that all stakeholders must play a role.  And the biggest and most important stakeholder is the consumer.  You and me.  We must figure out how to leverage the power of crowds, the voices of democracy, to have a clear hand in the decisions that affect us all.   And we must find ways to move forward, to continue to innovate and nurture our creativity, without losing something essential about who we are.   We must apply pressure on both corporations and government to try and get the balance right between these two powerful human needs.

{ 2 comments… read them below or add one }

Alexander Korth April 15, 2011 at 6:52 am

Great read! Thanks for sharing!

Chris Kuzak April 25, 2011 at 10:05 am

Using Sun as an example is a little late to the party given they were swallowed by Oracle. Although companies can publicly state fluff on privacy by design, the truth is that it’s all talk until we start seeing products that truly do promote user control and transparency with respect to how the data is being used. And that starts with building products that offer a compelling reason for the data collected with minimal surprises.

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