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Friday, 21 June 2013

A collapse in trust could stall tech development by decades, causing substatial damage to the hi-tech economy

One message, a message that drove me into digital politics, still isn't getting through.

It's the link between trust and growth.

Economists and social scientists understand this.  Robert D Putnam looked at the concept of social capital and how bonds of trust within communities help them prosper over 10 years before Facebook launched.

Zak and Knack (1998), and Dincer and Uslaner (2007), went on to study how generalised trust - that is, the propensity of strangers to trust each other - contributes to economic growth.

The logic is incredibly simple.

Generalised trust is critical to an entrepreneurial society.

In the absence of generalised trust it is not possible to do business with strangers because they are unlikely to stick to their end of any deal.

Therefore you will be far less inclined to trade outside your own established network, and far less inclined to try something new as you would in a society with a high degree of generalised trust.

Generalised trust within a society is maintained through fairness at all levels through access to justice, and a belief in social structures and the political system.

Studies show a link between trust and prosperity, and I argue exactly the same principles apply to data.

If we don't trust the custodians of our data - companies we choose to share our personal data with - then we will be less inclined to share our data, and also less inclined to try new products and services.

If we're less inclined to share we are unlikely to see continued growth in a sector which is becoming increasingly reliant on trust; and, if we're less inclined to try new products and services, then competition and innovation will be affected.

Trust brings convenience; and, from our willing participation in networked online communities, the prospect of further technological advancement, and further benefits in future.

If we want convenient access to what has become for many a digital extension of our brains, from anywhere, at any time, then we need to trust someone to look after our data in the cloud as we would ourselves in our home.

A collapse in trust could stem from wholesale misuse of our data by big companies themselves; or from the recent revelations that governments snoop on our data - a practice that tech giants can't distance themselves from.

Technology companies asked us to trust them with information that we would otherwise keep close - within our homes or about our person.

With than comes an expectation of legal safeguards comparable with those preventing police from entering our homes to read our diaries and letters.

Yet the tech giants failed to fight for our rights as we would have fought ourselves had the police been battering down doors to read our email.

And governments, whilst reaping many benefits of the high-growth technology sector, have failed to appreciate a potential impact on digital trust.  

The land grab for our data and control of  the data networks might bring short-term rewards for law and order and through the gathering of foreign political intelligence.

But it might have a longer-term impact on the digital economy through a collapse in trust.

President Obama claims the balance between privacy and security is about right.

I disagree.

I think we need to look to replicate the law of the physical world - a balance that has evolved over centuries - in the digital world.

Our personal data that we choose to store remotely needs to be afforded the same protection as our homes - the state should not access either without equivalent judicial oversight.

And because data can transcend jurisdictions it's not good enough to offer one level of protection to "citizens" whilst offering almost no protection and zero safeguards to "foreigners" - at least not without causing those "foreigners" to distrust your jurisdiction entirely.

@JamesFirth

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