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TechWatch: Should I Continue to Watch Technology?

In each issue of Ethix for the past 10 years, I have written a column on some aspect of technology. Why is this included in a business ethics magazine?

My premise: Technology is the most powerful force at work in business today.

1. Technology is reshaping the internal practice of business. Few companies have escaped the requirement to use technology in an innovative way just to remain competitive. Even small businesses are impacted (e.g., the grocery chain in Iowa with its automated warehouse facility featured in Ethix 58 or the cabinet business featured in this issue). Many functions, from manufacturing to reception, have lost the human touch due to technology. Purchasing is carried out through auctions on the web. Middle management, once the communicator of information up and down the organization, has been slashed in favor of information systems.

2. It is reshaping the external platform for business. Business has become global, in a large part due to technology. Transnational businesses, larger than many countries, have emerged in this technological era, sourcing and selling all over the globe. Businesses large and small discover competitors from across the globe, even if they thought they were operating in only a local area.

3. It has eliminated some business areas altogether while creating gaps in the market that open the doors for entirely new types of business. While new technologies “eat” old businesses and structures, they also create gaps that can be filled by new businesses. The entrepreneur who knows a bit about technology will consider a business opportunity that was not feasible just a few short years ago.

This force for change is not going away any time soon. Pat Gelsinger from Intel (Ethix 57) predicted the continued presence of Moore’s Law, basically the doubling of computer capability every 18–24 months, for at least another decade. I’ve written frequently about why a quantitative change of this magnitude produces a qualitative change. And this, too, will continue. The emergence of the Internet as a popular tool in the mid-1990s represented one such qualitative change. I remember predicting then that another change of the same magnitude would happen in the next decade. Looking back, we can see the role of search and mobility has produced another fundamental change in the way we live and work. So technology is a powerful force in business.

New Technology, New Ethical Issues

At the same time we see technology as a powerful force affecting ethics. Every qualitative change places us in an unknown area where there are fewer rules, since the law has not caught up with what had been made possible by technology. Sadly, this new world provides new opportunity for exploitation, and this is the ethics problem.

We have seen these new ethical issues arise over the lifetime of Ethix. When we started in 1998, one of the hot issues was the “dot-com” world. Technology was opening the door to a new way of doing business. There was exploitation of the worst kind as people were gaining wealth using nothing more than “smoke and mirrors” — and the promise of technology.

Just as the dot-com world was unraveling at the beginning of this century, the older corporate world began to be plagued by a series of major ethical scandals. The list usually starts with Enron, but is remarkably long. Technology played a role in these failures as well, driving more short-term thinking in an era of information. And technology created some instruments of business that put a fog of obscurity around complex models that were not easily understood.

More recently, the financial lending issues also find technology at the heart of at least part of the problem. Managing some of the complex loan schemes from subprime to “liars loans,” packaging these for sale to pension funds, and selling them would likely not have been possible before the technological tools of today.

We often say that ethics is about doing good and not simply avoiding doing bad. So the ethical leader will look at the changes created by technology as an opportunity to enhance the mission.

Conclusion

Technology issues will not go away, either in reshaping business, creating new gaps where new businesses can start, or leading us into uncharted waters where ethical failure can bloom. Technology presents great opportunity, but it can lead to new and dramatic ways to fail as well.

I guess I will have to continue to watch technology for a few more issues.

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Al Erisman is executive editor of Ethix, which he co-founded in 1998.
He spent 32 years at The Boeing Company, the last 11 as director of technology.
He was selected as a senior technical fellow of The Boeing Company in 1990,
and received his Ph.D. in applied mathematics from Iowa State University.

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