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We can’t see what’s wrong with the digital economy - and here’s why
It's broken, it impacts everyone, yet no-one has been able to put their finger on why...
If we are honest, our digital economy is in a mess.
Rising fraud. Power struggles with the Web2 platforms and data majors. A chaos of consent boxes. Clunky digital experiences. Difficulties with interoperability. And a collapse of trust online.
And here’s the thing - we’re all hurting.
End users and business. Regulators and innovators. Citizens and government. By everyone, I mean anyone working with people. Anyone working with personal data. Anyone building customer relationships.
And of course customers. Which is anyone. Well, everyone.
Like a pebble in our shoes, we all feel that things aren’t right with our digital tools. But what precisely is wrong?
There are three reasons we can’t see what’s going on with the digital economy:
1. Everyone thinks there’s a different root cause
What’s actually at the heart of all this digital pain? Is it about data? Is it about regulation? Is it about privacy? Is it about surveillance-based business models? Or is it about platform economics and the power laws of networks that concentrate our data in the hands of only a few companies?
The answer is probably all of it. But it’s like the parable of the blind men and the elephant - each of whom is touching different parts of the elephant, but each think they are standing in front of different animals. None of them can see the whole thing.
The same is true with our digital economy. No-one can see the bigger picture because we’re all staring at our favourite digital problem nail with our favourite digital solution hammer.
And we end up playing whack-a-mole with fixes for each of the discrete issues, not joining them up.
2. The digital issues are framed as a trade-off: value or trust
It’s described as a dilemma: businesses have to choose between using personal data to create new value… or not using personal data to build customer trust.
Either-or. You can’t have both.
Companies can gather and analyse personal data in order to offer exciting and personalised experiences. To provide customised services and tailored offers. But in doing so, they risk eroding customer trust.
By surprising customers in a bad way (“Where did you get my data from? How did you know that about me? I didn’t ask for this? Why is this ad following me around?”), or by mishandling the data itself (clumsy and untrusted data collection, issues with consent, potential data breaches etc.).
The alternative, we are told, is to build customer trust. To not use the data. To create customer value in ways not tied to personalised insights or the monetisation of customer information.
It’s a trade-off, they say. A so-called ‘balancing’ of interests.
But this is zero-sum thinking. We end up swinging wildly from data lockdown to data innovation and back again. And we have endless fights inside our businesses about which approach is better, and which is more valuable.
3. We can’t see outside today’s personal data paradigm
As Einstein said (something like) “We cannot solve our problems with the same thinking we used when we created them.”
Today’s digital solutions are making things worse, not better. And the incumbents - multinational social networks, the device and data companies - have a vested interest in keeping things as they are right now. Or at least evolving things in directions that suit them.
Those running the show today can’t - and don’t want - to see the digital issues they are causing. And certainly not to find solutions to them.
So, what is the answer?
It’s a simple idea. When you take a step back, it’s actually obvious.
It’s to give customers their own digital tools.
No, I don’t mean another personal data app. No, I don’t mean an NFT marketplace where I can sell my own data.
I mean new technology - software and processes - that are managed by the individual. Software that helps us do our own things, on our terms.
Let me make the point with a different example: cars.
With cars we can go where we like. Whenever we like. Paint them whatever colour we like. Put in them what we like. And travel together in groups as we like. Yes, we have to obey the local rules and driving customs. Yes, we must insure the car and drive carefully.
But cars are ours.
The digital tools we give people today don’t belong to individuals. Not really.
Instead, they are a cluster of apps and websites that belong to companies. They are a set of chat interfaces that belong the major messaging and handset companies. They are SMS and email channels that are run by telcos and huge corporations.*
Today’s digital customer tools aren’t like cars at all. Rather, they are much more like trains.
They are efficient. They go fast. Sometimes they can be comfortable. But they can only take us in one direction, to specified destinations. And we can awkwardly stretch the metaphor further: there’s some interoperability across our trains (the rails they run on), but if I want to take a different train route I have to change lines and wrestle with a mix of timetables and tickets. And in countries where the rail network is privatised, I have to buy a different ticket, from a different company, with a different pricing system and of course use a different account.
Look, here’s the point: we need to give people the digital equivalent of cars. New digital tools that empower us to go where we want, when we want, to do what we want.
That’s a tall order. A big mountain to climb. But many have already started and are making great progress in creating this new category - digital customer tools for people.
With the right approach, especially around decentralised digital identity, these new customer tools are going to help fix the broken mess we call the digital economy. They will help tackle fraud. They will provide alternatives to the Web2 platforms and data majors. They will help reboot digital trust.
But most importantly, they will show that there’s a way out.
That we can build digital solutions that don’t force a trade-off between value and trust - WE CAN HAVE BOTH.
There’s more to come on that in future posts. But for now, pass me the car keys and jump in. The road trip to digital independence has just begun.
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* Side point: you can argue that web browsers get close to being a genuine tool for personal independence. Much closer to the idea of digital cars. Users can visit whatever site they want, and configure it the way they want. They can even choose which browser provider they want. All because they run on the same technology rails.
But with the explosion of software-as-a-service platforms now available to every business, everywhere, browsers have morphed from being personal tools used to navigate the internet, to digital customer windows for users to interact with business applications. Literally used by people to browse - to view - each organisation’s own tools, with very little control over what happens to their data when they land on those sites and mobile apps.