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The End of Nation States? Part 2, Meta-Platforms for the Common Good

BLOG - 21 January 2019

In a first post, we discussed the ways in which meta-platforms have managed to position themselves against nation states, thanks to their ability to emancipate from geographical space and from the constraints inherent to traditional economic activities. In this second post, we try to demonstrate that these companies are also able to better understand citizens through their use of data. Could platforms, instead of states, be able to address issues related to the common good? Gilles Babinet shares his take on the matter.

In the beginning was a libertarian culture

In September 2018, Jeff Bezos, founder and CEO of Amazon, personally made a charitable donation worth $2 billion to fix a failing education system, just a few months after he had launched a huge private healthcare system, shared between Amazon and the companies of Berkshire Hathaway, Warren Buffet's holding company. 

The message this sends is representative of the one generally conveyed by platforms: "We, entrepreneurs, who know how to develop successful projects, on a scale such that they now serve billions of consumers around the world, will solve this or that problem. We will do so because we understand technology better than anyone else, we know users’ real needs and we are aware of the power of digital technologies, which is too often unsuspected."

Meta-platforms: acting for the common good? 

The firmness of these intentions can be questioned insofar as these companies seem ready to make worrying compromises as soon their commercial interests are at stake. For example, Apple removed VPN (Virtual Private Network) applications, which secure personal data, from its iStore or App Store in China, and Google is working on a Chinese search engine - DragonFly - in which politically sensitive topics and links are inaccessible. Edward Snowden, former NSA analyst, warned against the unhealthy relationship that seemed to exist between American intelligence and these companies - a claim he kept repeating over and over again, despite the strong and recurrent denials of those involved. These observations are not meant to excessively stigmatize these actors, but rather to emphasize that the very structure of these companies is based on the sustainability of a valiant stock market price (in order to continue to attract funding, and especially talent, via stock options). It would thus be naive to believe them when they claim to ultimately work for the common good, and fail to mention the structural interest they have for their shareholders.

It would thus be naive to believe GAFA when they claim to ultimately work for the common good, and fail to mention the structural interest they have for their shareholders.

Their effectiveness is nevertheless impressive, and the amount of new activities they undertake increases every year: transport, energy, health services and education are only some of the fields in which meta-platforms seem to have limitless ambitions. Does this mean that the issuance of identity, which for now is the prerogative of states, could soon fall under their responsibility? They do have countless ways of verifying our identity more reliably than states, thanks to the data they have access to: our biometric authentication (eyes, fingerprints, voice, speed and style of typing), the places we travel to, the recipients of our messages, the way we navigate, and so on.

It is therefore likely that a passport will soon be considered less reliable than an identity certified by Apple. This example can easily be transposed to many other sectors, thus demonstrating the distinctive advantage of meta-platforms.

Health and education seem to be the latter’s next targets. The challenge here for meta-platforms is not to improve, but to rethink services from top to bottom. Indeed, it was partly because Estonia was almost destroyed under Soviet rule that it was able to rebuild a radically new type of administration after the fall of the Wall. In the health sector, regions of the world with recently deployed systems are generally ranked first: Israel, Singapore and Shanghai are regularly cited as examples for having built models where numerical data plays a key role in the management of care and in the epidemiological system. Estonia is also the leading European country in education in PISA. Is it sheer coincidence that digital technologies were used to rethink almost all of the country’s educational protocols?

Like the local lords at the end of the Renaissance, political actors and senior officials do not understand the upcoming paradigm

We are essentially discussing a fundamentally cultural issue: since senior officials and political actors do not understand that a new paradigm is underway, it is impossible for them to support a transformation of such magnitude. In the unlikely event that they do not oppose it to preserve their fields of expertise, their mere passivity could be enough to obstruct this transformation. Indeed, and it is important to emphasize this point, the digital revolution is not incremental in nature. It is a disruption, and the modalities of yesterday's world are often factors that play against the understanding and implementation of the new paradigm. Establishing a form of data governance that meets the challenges of a modern nation, creating an "antitrust doctrine", which, instead of being based on market shares, potentially focuses on data and touchpoint, or on the number of contact points, creating regulatory contexts conducive to innovation... These are some of the missions of the institutions of tomorrow.

States that do not understand this new context may well die, and their digital indigence does not help them to establish other alternatives. The inability of a large majority of nations, including France, to endorse the principle of a platform state, as Estonia is doing, is worrying. In such countries, the senior administration is often in charge of setting the pace for reforms. Naturally, the ones that directly target the administration are the least likely to be implemented.

Indeed, states that manage to digitize their organizations seem to share common characteristics: a strong and ongoing political investment, sustained training of the entire civil service and in particular of senior civil servants, or the creation of units dedicated to this digitization, with transverse functions and of respectable sizes.

The inability of a large majority of nations, including France, to endorse the principle of a platform state, as Estonia is doing, is worrying.

It is thus difficult to even consider the implementation in France of a fraction of the radical e-government model observed in Singapore or Estonia. Therefore, the creation of an e-residence, allowing many Estonians to access e-services and available to anyone willing to pay 100 euros would probably be rejected early on in our country, where the notion of service is still essentially linked to the territory. However, as we have seen, these concepts are evolving rapidly. Failure to acknowledge this is tantamount to denying the very spirit underlying these transformations. At ENA, the French grande école providing training for French senior officials, only a rudimentary digital training course is proposed in 2018. France is also famous for being one of the few great nations that does not have a large public digital school. In France too, 40,000 engineers and about 10,000 programers of an acceptable level (according to optimistic estimates) are trained each year. At a minimum, twice as many engineers would be necessary to fill the skills gap signaled by the market, as well as to provide the public service with these crucial abilities. ​​​​​​

There is therefore an urgent need for these key principles of technological culture to be more widely disseminated and understood. These must spark the emergence of new models of public services, defense systems, education, health... It is also worth noting the rise of new actors, such as the meta-platforms, which interact more often with and know the citizens of a given nation better than do their own states. The goal is not to oppose these actors head-on, as it would be irresponsible not to acknowledge their immense productive and social contributions. But it is necessary to build a new doctrine in order to prevent the distortions they introduce into the markets from spreading. Meta-platforms have indeed shown that they are able to dictate their own laws and to eliminate smaller players, as was the case for price comparators.

Competition through data

It is likely that data has now become a sort of barrier to entry for new players on markets, even though meta-platforms are not necessarily in competition with these new entrants. However, competition authorities in important countries do not entirely consider data as a factor that articulates future regulation. Of course, the nature of innovation, based on disruptive mechanisms, probably justifies its being carried out far from large institutions and even more so from states. There is thus a form of "laissez-faire" to be imagined, and a new relationship to be structured between states and start-ups.

GAFA's influence is constantly growing and they do not hesitate to use powerful relays to impress public opinion and its decision-makers.

We should be concerned about the inability of nations to pre-empt this new paradigm and to create an adequate political doctrine to respond to it, because meta-platforms don’t just wait. All the political obstacles we have examined progressively leave these players free to promote and to widen the scope of their ideas and the ways they organize the world, and thus to accelerate the decay of nation states and other institutions.

Their influence is constantly growing and they do not hesitate to use powerful relays to impress public opinion and its decision-makers. For the time being, it is still possible to create effective countervailing powers. Yet will this still be the case in a few years' time, when the valuations of these companies will have increased, when their lobbying activities will have been further strengthened, and when their share in the global economy will have become even more significant? Until recently, many considered this hypothesis to be far-fetched. It has now become one that we must consider with care.

In a third post, we will highlight the economic and social influence that digital platforms have on states, local public institutions, and the ways in which they mould their influence strategies to stand up to political leaders.

 

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