Technology, Business, and Values

The breakneck pace of change coming from the digital revolution is incompatible with the slower pace of change for our institutions and for us as people. We have yet to develop good coping strategies for this challenge at multiple levels.

Changing Business Model
One important example of this is the dramatic fracture in the foundation of many business models, with more to come. Businesses that have failed to change their strategies to respond to the new technology have fallen behind or vanished, sometimes very quickly. Borders, Blockbuster, and Kodak represent a small sample. Other businesses have too quickly adopted new technology, not fully understanding how it best applies. Many of the dot-com failures fall in this category.

There are more cases to come. A recent visit to my longtime favorite book store, Barnes and Noble, showed me how they are coping with the change. The front of the store is now dominated by their Nook offering, their version of the electronic reader. They are betting, almost exclusively it would seem, on the electronic book direction. To make this clear, their automatic 20 percent discount on hardcover books is gone. Similarly the 10 percent discount on paperback books is gone. I still have my Readers Advantage card, where I pay $25 per year for a card allowing me to buy anything at 10 percent discount. In the past, that purchase was an easy call — I spent about $500 per year at the store. Together, these discounts made the convenience of buying while browsing a great deal.

Ten years ago I ran the data and here is one example of what I found. In my Technology Watch column I wrote,
… consider the purchase of the book John Adams by David McCullough, now out in paperback. offers a huge discount on the book with easy ordering, but by the time shipping and taxes are added to the price, the John Adams book costs $16.73. I could expect to receive it in three days to a week. At the local Barnes and Noble with my Readers Advantage card yesterday, I found I could purchase the book for $12.98 and walk home with it the same day. The added cost and time of going to the store (but I was going there anyway for coffee) is offset by a quicker receipt of the book at a lower cost.

I admit I had not run the numbers again, confident that I was getting a reasonable deal. Further, I felt some obligation to Barnes and Noble because of the browsing area they provided for me. But the comparison seems to have swung dramatically in 10 years, in part because of the elimination of the discount by Barnes and Noble. In preparation for an upcoming trip, I wanted to pick up a summer reading book Rules of Civility, newly out in paperback, which I had seen reviewed in the local paper. But when I got to Barnes and Noble, there was no paperback copy available. This illustrates one of the advantages of an online store — much larger inventory. With no discount on the hardback, and a $30 price tag, my discount card would basically cover the costs of tax. So I checked this out on Amazon.

I could wait for the hardback book using standard shipping and get it for $21.08. But they also had the paperback book, and that would come to $16.28. Or I could download the Kindle version for $11, and have it immediately. It was not a hard choice here. True, I could buy a Nook and download the title from Barnes and Noble. But I already have a Kindle Fire, and that would seem pointless. In fact, I wonder whether I will renew my Readers Advantage card. Had they continued with the 10-20 percent store discount, I may never have raised the question.

Institutions other than business, such as health care, education, law, government, and the church are subject to these same forces. Those with responsibility for leading any of these institutions in the 21st century must face the challenge of effectively understanding the connection between the technology and their institutions.

The Ethics Challenge
A second implication for our institutions is that the rapid pace of change from technology has taken us to new situations where we have little shared understanding of right and wrong. Some have wandered into deep ethical problems through ignorance of the new world. Some have seen this new world as an opportunity to exploit a new situation that had not yet been well understood, and where the law was silent.
Generally, ethical failure has come from a combination of ignorance and exploitation. Enron, Washington Mutual Bank, and British Petroleum represent a small sample of businesses that fell dramatically this way.

The Impact on Individuals
It is not simply the technological changes for business models or ethical situations that are a concern. These changes in technology have impacted us as individuals as well. This impact was clearly illustrated at a technology conference on the Microsoft campus that I attended last year, and reported on in Technology Watch a year ago. One of the speakers, Geoffrey Moore, painted a picture for the audience of the promise of technology over the coming years. It was an amazing picture of seamless worldwide connectivity with mobility and communications support.
In response to his presentation, a Google executive said,

“You have described my world. Last week I was in a meeting with my iPad open to a window in China and a window in Europe. All of my staff was sitting there with their mobile devices open. Some were instant messaging with those in other parts of the world. Our pace was frantic and difficult. We get a lot done. But when I get home, I can’t even talk with my wife or watch television. I am constantly wired.”

Efficiency is not the only measure of the use of technology in an institution. Considering the environment for people in the digital age is no less important than the safety environment for mine workers in the past century.

Looking Ahead
There is yet another area to consider. Looking forward, we can expect the change from digital technology to continue at its same pace for the next decade at least. This means that it is not enough to develop strategies for dealing with technology as it exists today, or as it is applied today in our institutions. Continued technology development at the foundational level will lead to new products coming from this technology, which will lead to new challenges for both institutions and individuals. Thus we will not be able to come to a final conclusion to any of these questions based on today’s snapshot of technology. New situations, new challenges, new opportunities, and new spaces for exploitation and ignorance will continue to develop, and we will be called on to deal with them appropriately.

Some put digital technology in a broader technology category, along with the development of complex nuclear or chemical weapons, and call for a halt to technological development. Some call for an individual retreat in response to the changes. Some regard the development as inevitable that will ultimately crush us all, taking a fatalistic view of the future. And some regard this world as unmanageable, where ethics and values have nothing to say to this rapidly changing world.

I argue that none of these responses is adequate or finally appropriate. We need to engage in the understanding of the development of this technology, and in the understanding of how these developments link to our institutions and to us as people. We need to provide leadership to our institutions in how to go forward in this rapidly changing world. And we need to go back to our foundational ethics and values and continue to ask the questions about how to deal properly with these changes.

Uniqueness of Information Technology
These battles are fought in all areas with all technologies, and are ultimately addressed in a way that meets the needs of society, even with some painful transitions. My 99-year-old mother has told me about first telephone, first car, etc. — technology transitions of a different era. What is different in today’s information technology world is the pace of change. Moore’ Law is still in effect, leading to continued new offerings that must be incorporated into society.

A strategy for technology critics has often been to stand back from technology until a reasonable level of adoption has been achieved, and then to critique the way the technology is used. Often, particularly with other technologies, they cite the “fundamental tendency” of the technology to take us in a particular direction. But I would argue that information technology, in addition to being fast-paced, is also more malleable than some other technologies, and even products in this domain can be shaped in their impact on society. The iPhone, iPad, PC, and even Facebook are reshaped through the community of users.

This reshaping can happen more readily early in the life of the new technology, suggesting an important role for the shapers early in the life of the technology.

While information technology has a strong role in transforming our institutions and our individuals, its application can be shaped, particularly at the early stages. Further, its pace of change make it a perpetual challenge, never allowing us to draw a final conclusion. While it is much easier to be a critic than a shaper, I challenge those who would shout their critiques from the grandstands to get in the game, understand the context, and play the important role of helping us use this technology well.


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.