Journey to the information society – Issues and strategic themes
Phuah Eng Chye (22 May 2021)
Issues
Developed countries have reached a crossroads in their journey to the information society. They face a populist backlash against technology and globalisation and have to decide whether to continue their advance or retreat. There’s not much to be said for a retreat except it is economically and socially regressive. Therefore, my comments are focused on the challenges of continuing with the journey.
The first point I want to make is that technologies have improved so much that information can now be used to great effect to solve problems. But this wasn’t demonstrated in the pandemic. While privacy concerns are a stumbling block, this does not justify the inept coordination (leadership, logistics, communications) and the politicisation of science and public services. In the West, markets[1] and platforms should have been harnessed to play a greater role in containing the pandemic. But politicians and platforms seemed distracted by content, regulation issues, new business opportunities and their soaring share prices. Governments and platforms should have done so much more. For whatever reason, there is a need to put more effort and resources into using information to solve societal problems and meet public needs because it isn’t happening on its own.
The second point is that the dark side of information – information disorder – is casting a shadow over democracies. Information disorder arises because information is autonomous (i.e. detached from ideologies and beliefs) and this leaves a power vacuum. Information disorder thus reflects the contest to control narratives and claim legitimacy. The ideological dogfights over health facts and measures reflect the antagonistic team dynamics; blame culture is reaching virulent levels and leading to a breakdown in trust. This is unhealthy for a democracy and needs to be addressed. We should be wary of efforts to do this by controlling or removing access, or by curtailing distribution of information as this tends to concentrate information privileges (power) with a select few (such as security agencies or platforms). Information privileges should be viewed as a form of power inequality that leads to exploitation or suppression of citizens.
In my view, we should follow the paths that are more likely to lead us to an information democracy. The essence of a democracy is that no one should be able to control information flows and narratives – a philosophy consistent with concepts such as internet neutrality, peer-to-peer and bitcoin. This requires society to be highly transparent (where information and narratives are generally accessible and distributed); and robust (safeguards to ensure there is balanced debate, that information is not abused, there are checks to validate and authenticate narratives and identities, to moderate behaviours and to ensure efficient dispute resolution). Efforts should therefore focus on enhancing the maturity levels of societal cultures; i.e. to make it tolerant of dissent, accommodative of diverse beliefs and lifestyles, and facilitative to constructive debate and engagement. Towards this end, the expansion of quality sources of content[2], the injection of thoughtful content into reality bubbles or information silos, the establishment of independent institutions to promote societal trust and cooperation, and the expansion of authentic zones[3] are means of enhancing information as a public good and facilitating communities to cope with higher levels of transparency.
The third point is to reassess the public and private roles[4] in the information society. Many areas of society are experiencing stress from information disruption. In the name of upholding the virtues of markets, some governments have been neglectful and allowed social ills to become entrenched. The private sector and markets, to be fair, have their limits and aren’t set up to address social problems. Governments need to provide the leadership to address the challenges posed by information disruption. This requires designing policies broadening the use of information for public good and enhancing its value creating good content[5] and good jobs[6]; and designing information rules to rebalance private and public interests, and individual choice and social cooperation.
The fourth point is not to under-estimate the leadership transition challenges. As societies become informationalised, power shifts to a generation that grew up with technology. In the future, greater responsibility will fall on a new “geek leadership” that is able to bridge the gap between information use and public needs in the society of the future. But that should not be taken for granted. The most successful tech companies are run by idiosyncratic leaders who seemed intense, competition-focused superficial and cocooned in a virtual world of their own creation. The leading technologists understand science, machines and data but their visions often seem cold (autonomous cars, robotic factories and smart cities) and manipulative (global domination, high share prices). Traditional leadership virtues such as character, compassion, morality, honesty and a sense of responsibility and dedication to public service appear lacking in geek cultures. I think this gap needs to be addressed by mapping out a skill development roadmap to prepare “geek talents” for a greater role in public service.
The journey also represents a search for a coherent economic vision of the information society. In this regard, policy-making is handicapped by the lack of a robust, holistic theoretical framework for the information society. There are studies on data, privacy, surveillance, transparency, content, algorithms, competitiveness, innovation and security but they are conducted in silos. Economists are far from developing a general theory for the information society – where information is the core and not the exception (as is the case now). A holistic framework would help policy-makers to figure out how to instil order in an environment characterised by instability, multi-dimensionality and ambiguous boundaries; and without recourse to physical responses. We need to understand how to reset objectives, overhaul organisational structures and legal frameworks and manage economic policies in the context of information disruption.
Strategic themes
How do we assess if visions and plans are aligned with the journey to an information society? One way is to have a checklist of information-centric strategic themes.
- Information should be at the core of strategies
A plan aligned to the information society would view challenges from an information perspective and propose information-driven solutions. There are significant implications arising from the central role of information. First, the systemic (rather than ad hoc) collection of information becomes a goal in itself. Primarily, you can’t solve problems if you don’t have the necessary information. Information provides the basis of defining and resolving problems. It should be noted the availability of information does not create problems in itself. It reveals what the problems are and forces society to deal with them. It is also important to be wary of the dangers of creating information blind spots. Second, there should be initiatives to increase and broaden the use of information. In this regard, privacy shouldn’t be viewed as an objective but as a constraint; i.e. we should aim to increase information transparency and usage subject to meeting privacy considerations. Promoting data-sharing and transparency increases usage and improves the quality of data and content. It enhances robustness –ensuring data and ideas are tested and thought-through (rather than belief-driven). Information sharing also enhances coordination, innovation and participation. Third, plans should aim to create or strengthen ecosystems to maximise the creation of value from information and to broaden the distribution of its benefits. Too often information is used for administration or enforcement purposes (in the case of governments) or private gains. Plans should therefore be developed to position different aspects of information (such as technology, content[7], teaching, healthcare, disputes[8] and compliance) as growth industries or to increase the value of public goods.
- Establish information-based indicators
Traditional indicators (profits and output) don’t capture the benefits and risks of information-driven growth. New indicators should be designed to define growth from an information perspective. One approach is to combine quantitative-qualitative measurements to differentiate between good competition (that produces improvements in smartphones and cars) and bad competition (that made houses, education and health costs unaffordable), and good content and jobs from bad ones. The quality of government intervention should be assessed based on criteria that differentiate good policies and rules from bad ones. Externalities – such as inequality, financial and social instability and various forms of information-driven pollution – should also be measured. Quantitative targets are also needed particularly to track inputs, productivity and wealth accumulation and dispersion over time.
- Re-organisation of government
Governments need to be re-organised to manage a successful transition to the information society. This is critical because governments should take a leadership role to spearhead the change process. An agency should be established to manage the formulation and implementation of information society-related strategies. This would include providing advice on the compatibility of organisational structures of ministries and agencies, policies, regulations and taxes and the provision of public goods in an information society. A key objective would be to strengthen intra-agency coordination to facilitate new ways of using information and to promote “whole-of-government” approaches. Governments should also give serious consideration to building platforms[9] to strengthen economic coordination and to expand the use of information to achieve public objectives.
- Manage changes in legal framework
The expansion of the information sphere is accompanied by an expansion of rules. Thus, the natural consequence of information overload is regulatory overload. More rules imply more crimes, more disputes, more lawsuits and higher legal risks, liabilities and bureaucracy for society as a whole. In addition, where crime used to be largely defined in a physical context, the new rules define misdemeanours and illegal conduct within an information context. Physical crimes (such as burglary) are overshadowed by newly defined information crimes (such as in relation to theft, abuses, privacy, data and content). Enforcers and regulators are already finding it more expedient to prosecute on information or procedural failures (tax evasion, omitting or providing erroneous information, and failure to comply) than to prove actual wrong-doings. The penalties for information are also becoming more onerous particularly when it is linked to offences like money laundering or national security. In particular, the externalities from legal disputes and information disorder can become serious impediments to coordination, efficiency, innovation, competitiveness, growth and democracy. Hence information rules are critical to incentivise new behaviours and to protect individual choice and rights. However, information rules[10] are difficult to design because legal definitions and boundaries are unsettled by fungibility, fragmentation, transience, convergence and complexity. A specialist team should be set up to take an overview on information rules across all areas such as employment, (data) ownership, licenses, competition, disclosure, privacy, data, inequality, ethics, taxation, content, national security and international governance. They should also review the specification of information crimes such as for cybercrime, hate crime, intellectual property, national security and enforcement and ensure rules are fair and punishments are proportional. It is preferable that rules are designed are autonomous and adhere to generic principles that can be applied consistently across physical and virtual operations, that accountabilities are structured to cater for flexible operational configuration[11] and that dispute resolution processes are fair, transparent, efficient and effective.
- Adopt human capital-centric approaches
A human capital-centric approach perceives the value of human capital as an information problem. This requires extensive data on individuals which includes quantitative indicators such as income (including welfare and other benefits) and assets (savings, properties and investments); and qualitative indicators such as opportunities (employment, mobility) and access to amenities (education, healthcare, welfare). The extensive datasets facilitate tailored and cost-effective solutions to address inequalities and strengthen social protections in the face of challenges from aging demographics, shrinking household sizes[12], transience[13], and monetisation. Detailed data is also key to linking the creation of opportunities for income, work and asset ownership across the welfare, employment, healthcare and education ecosystems within communities. The focus on human capital development is critical to mitigating the information threats – posed by data, logic and machines – to the role of humans as a vehicle for knowledge and wealth accumulation. Safeguards will be required to mitigate concerns on privacy risks.
- Re-orient macroeconomic objectives and policies
Conventional macroeconomic policies have let societies down. Stimulus deficits are climbing to extreme and unsustainable levels, yet the benefits don’t seem to be address the problems faced by the expanding group of low-income citizens. These are symptoms that developed economies are turning anorexic[14] and financialised; conditions that conventional macroeconomic policies cannot provide effective remedies for. In this context, traditional income redistribution is undermined by acute inequalities which narrows the tax revenue base and by rising costs[15]. Policy-makers need to consider augmenting redistribution by expanding income streams from capital[16] for the poor. Welfare support and labour regulation needs to be revamped to cope with challenges posed by fragmentation and transience; and through government initiatives that focus on creating good jobs[17]. Fiscal support should be redirected from legacy industries, firms and jobs and channelled into accelerating the growth of new industries and expanding the platform ecosystem (as well as to promote competition on platforms).
Seemingly permanent quantitative easing and fiscal deficits, deflation and negative interest rates are symptoms of a messed-up monetary system. Monetary theory needs to be revised to incorporate the effects of intangibility on value and payments[18]; of repricing[19] on the costs of living; of negative interest rates on financial intermediation; and of large global central bank balance sheets on economies. Central banks need to consider differentiating interventions in a profit-led versus wage-led economy; and design policy tools that can transform negative or low interest rates into catalysts for a recovery in capital formation and employment creation. A new framework may also be needed to redefine sound monetary policy in a financialised economy.
Conclusions
Organising a society around information expands the range of possibilities. Technology firms led the way to demonstrate how these possibilities can be created and monetised. But they have stopped short, due to the constraints of their profit objectives, on meeting societal needs for public goods. It remains now for governments to step up and complete the journey to the information society. Governments should reset their policies to accelerate the use of information for public objectives. They should change the rules to widen access and use of information, support information-based projects, incentivise the production of content that serve as public goods, promote authenticity, transparency, and frame rights and democracy from an information perspective.
Most of all, information societies are highly connected and global. This means that policies need to consider how best to tap resources from the flow and exchange of goods, people, capital and information around the world. In this regard, while globalisation has underpinned rising economic prosperity, it has altered the balance of global economic power. This has triggered a populist backlash which is creating difficulties for developed countries to sustain their openness and causing them to re-assert national sovereignty. The tension in national sovereignties has initiated a global reset with a great power conflict already taking place in the information sphere.
References
Phuah Eng Chye (2015) Policy paradigms for the anorexic and financialised economy: Managing the transition to an information society. http://www.amazon.com/dp/B01AWRAKJG
Phuah Eng Chye (10 March 2018) “Organisation of households: Shrinking households, labour market frictions and societal cultures”. http://economicsofinformationsociety.com/organisation-of-households-shrinking-households-labour-market-frictions-and-societal-cultures/
Phuah Eng Chye (16 March 2019) “Future of work: Strategy roadmap for labour”. http://economicsofinformationsociety.com/future-of-work-strategy-roadmap-for-labour/
Phuah Eng Chye (9 November 2019) “Information and organisation: China’s surveillance state growth model (Part 1: China’s state model)”. http://economicsofinformationsociety.com/information-and-organisation-chinas-surveillance-state-growth-model-part-1-chinas-state-model/
Phuah Eng Chye (23 November 2019) “Information and organisation: China’s surveillance state growth model (Part 2: The clash of models)”. http://economicsofinformationsociety.com/information-and-organisation-chinas-surveillance-state-growth-model-part-2-the-clash-of-models/
Phuah Eng Chye (7 December 2019) “Information and organisation: China’s surveillance state growth model (Part 3: The relationship between surveillance and growth)”. http://economicsofinformationsociety.com/information-and-organisation-chinas-surveillance-state-growth-model-part-3-the-relationship-between-surveillance-and-growth/
Phuah Eng Chye (28 March 2020) “The transparency paradigm”. http://economicsofinformationsociety.com/the-transparency-paradigm/
Phuah Eng Chye (11 April 2020) “Anonymity, opacity and zones”. http://economicsofinformationsociety.com/anonymity-opacity-and-zones/
Phuah Eng Chye (25 April 2020) “Public and private roles in managing data (Part 1: Surveillance)”. http://economicsofinformationsociety.com/public-and-private-roles-in-managing-data-part-1-surveillance/
Phuah Eng Chye (9 May 2020) “Public and private roles in managing data (Part 2: Data sharing)”. http://economicsofinformationsociety.com/public-and-private-roles-in-managing-data-part-2-data-sharing/
Phuah Eng Chye (23 May 2020) “Public and private roles in managing data (Part 3: Evolving roles)”. http://economicsofinformationsociety.com/public-and-private-roles-in-managing-data-part-3-evolving-roles/
Phuah Eng Chye (4 July 2020) “Government of the Data (Part 3: The future of government platforms)”. http://economicsofinformationsociety.com/government-of-the-data-part-3-the-future-of-government-platforms/
Phuah Eng Chye (15 August 2020) “Economics of data (Part 3: Relationship between data and value and the monetisation framework)”. http://economicsofinformationsociety.com/economics-of-data-part-3-relationship-between-data-and-value-and-the-monetisation-framework/
Phuah Eng Chye (26 September 2020) “Economics of data (Part 6: Data and poverty eradication)”. http://economicsofinformationsociety.com/economics-of-data-part-6-data-and-poverty-eradication/
Phuah Eng Chye (24 October 2020) “Hayek: Economic models in the pandemic and information society”. http://economicsofinformationsociety.com/hayek-economic-models-in-the-context-of-a-pandemic-and-the-information-society/
Phuah Eng Chye (7 November 2020) “Information rules (Part 1: Law, code and changing rules of the game)”. http://economicsofinformationsociety.com/information-rules-part-1-law-code-and-changing-rules-of-the-game/
Phuah Eng Chye (21 November 2020) “Information rules (Part 2: Capitalism, democracy and the path forward)”. http://economicsofinformationsociety.com/information-rules-part-2-capitalism-democracy-and-the-path-forward/
Phuah Eng Chye (5 December 2020) “Information rules (Part 3: Regulating platforms – Reviews, models and challenges)”. http://economicsofinformationsociety.com/information-rules-part-3-regulating-platforms-reviews-models-and-challenges/
Phuah Eng Chye (19 December 2020) “Information rules (Part 4: Regulating platforms – Paradigms for competition)”. http://economicsofinformationsociety.com/900-2/
Phuah Eng Chye (2 January 2021) “Information rules (Part 5: The politicisation of content)”. http://economicsofinformationsociety.com/information-rules-part-5-the-politicisation-of-content/
Phuah Eng Chye (16 January 2021) “Information rules (Part 6: Disinformation, transparency and democracy)”. http://economicsofinformationsociety.com/information-rules-part-6-disinformation-transparency-and-democracy/
Phuah Eng Chye (30 January 2021) “Information rules (Part 7: Regulating the politics of content)”. http://economicsofinformationsociety.com/information-rules-part-7-regulating-the-politics-of-content/
Phuah Eng Chye (13 March 2021) “Information rules (Part 10: Reimagining the news industry for an information society)”. http://economicsofinformationsociety.com/information-rules-part-10-reimagining-the-news-industry-for-an-information-society/
Phuah Eng Chye (27 March 2021) “Information rules (Part 11: Regulating AI – Issues)”. http://economicsofinformationsociety.com/information-rules-part-11-regulating-ai-issues/
Phuah Eng Chye (8 May 2021) “Journey to the information society – Unlearning and learning”. http://economicsofinformationsociety.com/journey-to-the-information-society-unlearning-and-learning/
[1] See “Hayek: Economic models in the pandemic and information society”.
[2] See “Information rules (Part 10: Reimagining the news industry for an information society)”.
[3] See “Anonymity, opacity and zones”.
[4] See “Public and private roles in managing data (Part 1-3)”.
[5] See “Information rules (Part 10: Reimagining the news industry for an information society)”.
[6] See “Future of work: Strategy roadmap for labour”.
[7] See “Information rules (Part 10: Reimagining the news industry for an information society)”.
[8] See “Information rules (Part 1: Law, code and changing rules of the game)”.
[9] See “Government of the Data (Part 3: The future of government platforms)”.
[10] See “Information rules (Parts 1-12).
[11] It is the location of accountabilities that matter as operations are now cpnstantly restructured.
[12] See “Organisation of households: Shrinking households, labour market frictions and societal cultures”.
[13] Transience risks include the shortening life-spans of firms, rapid product and technology obsolescence and trends favouring temporary or gig employment.
[14] See Policy paradigms for the anorexic and financialised economy: Managing the transition to an information society.
[15] The same tax dollar buys less because of rises in transportation, property, education and medical costs.
[16] Capital gains taxes are easily by-passed. Examples of expanding income streams from capital include broadening assets ownership or directly redistributing income earned from capital (e.g. redistributing a portion of the endowment returns to those with lower balances). See “Economics of data (Part 6: Data and poverty eradication)”.
[17] See “Future of work: Strategy roadmap for labour”.
[18] This includes the proliferation of cyber and synthetic substitutes for money, credit and investible assets.
[19] See “Economics of data (Part 3: Relationship between data and value and the monetisation framework)”.