Technological revolutions and the search for trust

For the past several years, I have been an advisor to the Data-Smart City Solutions initiative at the Harvard Kennedy School of Government.  This is a group tasked with helping cities consider how to govern in new ways using the volumes of new data that are now available.  An adjacent group at HKS is the Program on Municipal Innovation (PMI), which brings together a large group of city managers (deputy mayors and other operational leaders) twice a year to talk shop.  I’ve had the honor of attending this meeting a few times in the past, and I must say it’s inspiring and encouraging to see urban leaders from across the US come together to learn from one another.

One of the PMI’s latest projects is an initiative on regulatory reform — studying how, exactly, cities can go about assessing existing rules and regulations, and revising them as necessary.  As part of this initiative, I’ve been writing up a short white paper on “Regulation 2.0” — the idea that government can adopt some of the “regulatory” techniques pioneered by web platforms to achieve trust and safety at scale.  Over the course of this week, I’ll publish my latest drafts of the sections of the paper.

Here’s the outline I’m working on:

  1. Regulation 1.0 vs. Regulation 2.0: an example
  2. Context: technological revolutions and the search for trust
  3. Today’s conflict: some concrete examples
  4. Web platforms as regulatory systems
  5. Regulation 2.0: applying the lessons of web platform regulation to the real world

Section 1 will be an adaptation of this post from last year.  My latest draft of section 2 is below.  I’ll publish the remaining sections over the course of this week.

As always, any and all feedback is greatly appreciated!

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Technological revolutions and the search for trust

The search for trust amidst rapid change, as described in the Seattle ridesharing example, is not a new thing.  It is, in fact, a natural and predictable response to times when new technologies fundamentally change the rules of the game.

We are in the midst of a major technological revolution, the likes of which we experience only once or twice per century.  Economist Carlota Perez describes these waves of massive technological change as “great surges”, each of which involves “profound changes in people, organizations and skills in a sort of habit-breaking hurricane.”[1]

This sounds very big and scary, of course, and it is.  Perez’s study of technological revolutions over the past 250 years — five distinct great surges lasting roughly fifty years each — shows that as we develop and deploy new technologies, we repeatedly break and rebuild the foundations of society: economic structures, social norms, laws and regulations.  It’s a wild, turbulent and unpredictable process.

Despite the inherent unpredictability with new technologies, Perez found that each of these great surges does, in fact, follow a common pattern:

First: a new technology opens up a massive new opportunity for innovation and investment. Second, the wild rush to explore and implement this technology produces vast new wealth, while at the same time causing massive dislocation and angst, often resulting in a bubble bursting and a recession.  Finally, broader cultural adoption paired with regulatory reforms set the stage for a smoother and more broadly prosperous period of growth, resulting in the full deployment of the mature technology and all of its associated social and institutional changes.  And of course, by the time each fifty-year surge concluded, the seeds of the next one had been planted.

CSU929

image: The Economist

So essentially: wild growth, societal disruption, then readjustment and broad adoption.  Perez describes the “readjustment and broad adoption” phase (the “deployment period” in the diagram above), as the percolating of the “common sense” throughout other aspects of society:

“the new paradigm eventually becomes the new generalized ‘common sense’, which gradually finds itself embedded in social practice, legislation and other components of the institutional framework, facilitating compatible innovations and hindering incompatible ones.”[2]

In other words, once the established powers of the previous paradigm are done fighting off the new paradigm (typically after some sort of profound blow-up), we come around to adopting the techniques of the new paradigm to achieve the sense of trust and safety that we had come to know in the previous one.  Same goals, new methods.

As it happens, our current “1.0” regulatory model was actually the result of a previous technological revolution.  In The Search for Order: 1877-1920[2], Robert H. Wiebe describes the state of affairs that led to the progressive era reforms of the early 20th century:

Established wealth and power fought one battle after another against the great new fortunes and political kingdoms carved out of urban-industrial America, and the more they struggled, the more they scrambled the criteria of prestige. The concept of a middle class crumbled at the touch. Small business appeared and disappeared at a frightening rate. The so-called professions meant little as long as anyone with a bag of pills and a bottle of syrup could pass for a doctor, a few books and a corrupt judge made a man a lawyer, and an unemployed literate qualified as a teacher.

This sounds a lot like today, right?  A new techno-economic paradigm (in this case, urbanization and inter-city transportation) broke the previous model of trust (isolated, closely-knit rural communities), resulting in a re-thinking of how to find that trust.  During the “bureaucratic revolution” of the early 20th century progressive reforms, the answer to this problem was the establishment of institutions — on the private side, firms with trustworthy brands, and on the public side, regulatory bodies — that took on the burden of ensuring public safety and the necessary trust & security to underpin the economy and society.

Coming back to today, we are currently in the middle of one of these 50-year surges — the paradigm of networked information — and that we are roughly in the middle of the above graph — we’ve seen wild growth, intense investment, and profound conflicts between the new paradigm and the old.

What this paper is about, then, is how we might consider adopting the tools & techniques of the networked information paradigm to achieve the societal goals previously achieved through the 20th century’s “industrial” regulations and public policies.  A “2.0” approach, if you will, that adopts the “common sense” of the internet era to build a foundation of trust and safety.

Coming up: a look at some concrete examples of the tensions between the networked information era and the industrial era; a view into the world of web platforms’ “trust and safety” teams and the model of regulation they’re pioneering; and finally, some specific recommendations for how we might envision a new paradigm for regulation that embraces the networked information era.

 

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Footnotes:

  1. Perez, p.4
  2. Perez, p. 16
  3. Weibe, p. 13.  Hat tip to Rit Aggarwala for this reference, and the idea of the “first bureaucratic revolution”

3 thoughts on “Technological revolutions and the search for trust

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