Social Risk Analysis in the Tech Sector
Over the past decade, growing concerns regarding the societal impact of new technologies have been at the centre of many controversies animating the public debate. A critical aspect of this dialogue is encapsulated by what Harvard University Professor S. Zuboff describes as “surveillance capitalism”. This concept refers to a new stage of capitalism in which the commodification of user data has begun to erode democratic institutions and processes, thereby necessitating a reassessment of the existing social contract. As the pace of digital innovation outstrips the rate at which society can adapt, policy makers and civil society find themselves grappling with the disruptive power of these technological platforms. This disruption was notably evidenced in the 2018 Cambridge Analytica scandal, where data from approximately 87 million Facebook users was exploited to manipulate public opinion during the U.S. presidential election. Amid a surge in international cybersecurity threats targeting both public and private sectors, the sector is also weakened by the leading number of layofss across industries, seeing an alarming 649% year-over-year increase in 2022. In navigating this intricate landscape, the Environmental, Social, and Governance (ESG) framework emerges as an indispensable framework to identify company risks and opportunities. Not only are companies with robust ESG practices well-positioned for growth, but they also exhibit more resilience against market volatility. Within the tech sector, the Social pillar of ESG plays a critical role in bolstering organisational structures while mitigating some of the negative externalities produced by unchecked digital innovations. This article aims to explore two main social challenges currently confronting the sector: on the external front, it examines the necessity to mitigate the mechanisms producing negative societal outcomes; internally, it probes into critical issues concerning the well-being and development of the sector’s human capital.
Ethics by Design as a preventative measure
A growing number of countries are joining efforts to regulate the digital realm. Operating under different degrees of stringency and enforcement — with landmark regulations such as the EU’s GDPR, Brazil’s Bill 2630 and California’s California Privacy Rights Act setting standards — tech companies are facing major regulatory changes addressing both technical and business operations. Clashes between tech firms and policy makers are becoming more and more frequent as multimillion-dollar to billion-dollar fines are targeting tech giants like Amazon, Google and Meta. In order to avoid such financial and reputational risks, tech companies should proactively align with emerging regulations. Instead of waiting for end-of-process ethics-seeking regulatory controls, companies might benefit from adopting an “ethics by design” approach — akin to frameworks already advanced in AI development — to achieve responsible tech. Such ethics-oriented project management can successfully contribute to risk minimisation, the strengthening of brand appeal, and the establishment of a long-term strategic vision. Hence, transitioning to this anticipatory, ethics-centric model represents the next crucial challenge and competitive differentiator for the technology sector.
The importance of a diverse and healthy workforce
As ownership and accountability become central arguments for tech development, investing in specialised ethics teams can provide a comprehensive understanding of a product's ethical implications. Educational programs for all employees could further enhance overall ethical corporate culture. This recommendation acts as a twofold solution: firstly, it addresses the need for ethical thinking in the product evaluation, secondly, it addresses the lack of diversity affecting in the tech sector, which remains a mostly white and male-dominated industry. By hiring a diverse team, companies can more effectively mitigate the impact of inherent biases — manifesting, for example, in facial recognition technologies or autonomous vehicle detection systems. Such an inclusive approach ensures the development of more rounded, non-discriminatory software, thereby fostering safe accessibility for a diverse user base. Similarly, it is essential that companies make sure to preserve the mental health of the team, particularly given the proven detrimental mental toll of daily employee exposure to morally complex scenarios.
Systematic implementation of ethics
The modus operandi of design ethicists oversees the totality of the business cycle and ensures alignment with company values. In the case of social media, design ethics would reconsider the Hook Model of behavioural economics that capitalises on unconscious human nudges. For instance, design ethicists have questioned the the “pull-to-refresh” platform feature that stimulates “intermittent reinforcements” encouraging endless online binge sessions.
Along with economic and technical testing, ethical testing has the potential to elevate products’ standards. Instead of waiting for finished products to collapse under external controls, a “pre mortem” examination of intents and strategies might be useful. “How can our project fail? What could be the main causes? Which ones are our blind spots? How can we prevent or mitigate those risks?” are all valid questions that ethically frame the beginning and development of a project. Ethics experts encourage the use of Eyal’s Manipulation Matrix, an essential tool for firms to evaluate the impact of their products on consumers. This matrix not only facilitates strategic product positioning but also fosters corporate self-awareness inquiries, steering companies to the “facilitators” category.
Source: Toxboe, 2019.
Evaluating the social ethics of a product can be challenging, given the intrinsically subjective nature of the matter. Nevertheless, tech companies have a range of procedures at their disposal. For instance, they can implement red teaming practices to ensure robust security and the data privacy for users and employees alike. Additionally, joining an ESG registry can not only signal a public commitment to sustainability, but also provide a platform for companies to set ambitious standards. New academic and scientific research increasinlgy attempt to understandhow technology can self-evaluate its ethics, notably through AI. Yet perhaps most critically, any ethical evaluation process should incorporate external feedback loops that prioritise customer satisfaction. Ultimately, aligning new technologies with societal needs means bridging the gap between the people developing such technologies and the people they impact.
Patterns and demands of the tech sector workforce
Besides the “ethics by design” challenges, the internal social challenges are equally demanding. As one of the most dynamic and growing sectors, the tech industry is populated by highly skilled workers whose competencies are high in demand. Considering the recent staggering turnover rates in tech companies, it is imperative to align talent retention and management strategies with robust ESG guidelines. Competitive remuneration, possibilities for growth and a supportive work culture are determining factors for tech employees nowadays. Analogously, attracting young talents entails offering continual learning and skill enhancement opportunities,, recognition and flexibility to work remotely. Additionally, with the post-pandemic landscape making community building more complex than ever,initiatives such as team-building and family care packages have been proven to be the most effective to foster employee satisfaction. Social responsibility can incentivise a transition from an exclusively transactional environment to a synergetic one where work conditions are supportive and burnout rates — amongst the highest across tech companies — decrease. Additionally, quantitative metrics like staff turnover rates and disparities in pay based on gender and ethnicity serve as pivotal indicators that are both transferable and actionable, capable of catalyzing genuine change. By optimizing working conditions, companies can simultaneously elevate their innovation rates, enhance their desirability as employers, and bolster their brand equity. Finally, credible and transparent communication strategies are key to engage communities throughout the organisational and business life-cycles.
Conclusion
In summary, the rapid development of technology in recent years has created significant social challenges and opportunities. “Surveillance capitalism” poses a threat to democratic integrity by exploiting user data and compromising the security of global elections. Coupled with heightened regulatory scrutiny, this necessitates an urgent, proactive ethical framework in technological innovation, embodied by “ethics by design” approaches. Such approaches not only help avoiding conflicts with regulations, but also promote responsible technology development, reduce risk, and strengthen brand reputation. Additionally, talent management and transparent communication are key factors in engaging communities and building socially responsible technology organisations. By addressing these challenges and implementing ethical practices, the technology sector can contribute to a more ethical, responsible and sustainable future.