Taginfrastructure

Data about me in my city

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This article is a few months old (and in German), but two points of view that I’ll just offer side by side as they pretty much sum up the state of play in smart cities these days.

For context, this is about a smart city partnership in which Huawei implement their technologies in Duisburg, a mid-sized German city with a population of about 0.5 million. The (apparently non-binding) partnership agreement includes Smart Government (administration), Smart Port Logistics, Smart Education (education & schools), Smart Infrastructure, 5G and broadband, Smart Home, and the urban internet of things.

Note: The quotes and paraphrases are roughly translated from the original German article.

Jan Weidenfeld from the Marcator Institute for China Studies:

“As a city administration, I’d be extremely cautious here.” China has a fundamentally different societal system, and a legal framework that means that every Chinese company, including Huawei, is required to open data streams to the communist party. (…)

Weidenfeld points out that 5 years ago, when deliberations about the project began, China was a different country than it is today. At both federal and state levels, the thinking about China has evolved. (…)

“Huawei Smart City is a large-scale societal surveillance system, out of which Duisburg buys the parts that are legally fitting – but this context mustn’t be left out when assessing the risks.”

Anja Kopka, media spokesperson for the city of Duisburg:

The city of Duisburg doesn’t see “conclusive evidence” regarding these security concerns.The data center meets all security requirements for Germany, and is certified as such. “Also, as a municipal administration we don’t have the capacity to reliably assess claims of this nature.” Should federal authorities whose competencies include assessing such issues provide clear action guidelines for dealing with Chinese partners in IT, then Duisburg will adapt accordingly.

The translation is a bit rough around the edges, but I think you’ll get the idea.

With infrastructure, when we see the damage it’s already too late

We have experts warning, but the warnings are of such a structural nature that they’re kinda of to big and obvious to prove. Predators will kill other animals to eat. ????

By the time abuse or any real issue can be proven, it’d be inherently to late to do anything about it. We have a small-ish city administration that knows perfectly well that they don’t have the capacity to do their due diligence, so they just take their partners’ word for it.

The third party here, of course, being a global enterprise with an operating base in a country that has a unique political and legal system that in many ways isn’t compatible with any notion of human rights, let alone data rights, that otherwise would be required in the European Union.

The asymetries in size and speed are vast

And it’s along multiple axes — imbalance of size and speed, and incompatibility of culture — that I think we see the most interesting, and most potentially devastating conflicts:

  • A giant corporation runs circles around a small-to-mid sized city. I think it’s fair to assume that only because of Chinese business etiquette was the CFO of one of Huawei’s business units even flown out to Duisburg to sign the initial memorandum of understanding with Duisburg’s mayor Sören Link. The size and power differential is so ridiculous that it might just as well have been the Head of Sales EMEA or some other mid-level manager that took that meeting. After all, for Chinese standards, a city of a population of a half-million wouldn’t even considered a third tier city. Talk about an uneven playing field.
  • The vast differences of (for lack of a better word, and broadly interpreted) culture in the sense of business realities and legal framework and strategic thinking between a large corporation with global ambitions and backed by a highly centralized authoritarian state on one side, and the day-to-day of a German town are overwhelming. So much so, that I don’t think that the mayor of Duisburg and his team are even aware of all the implicit assumptions and biases they bring to the table.

And it’s not an easy choice at some level: Someone comes in and offers much needed resources that you need and don’t have any chance to get, desperation might force you to make some sub-prime decisions. But this comes at a price — the question is just how bad that price will be over the long term.

I’m not convinced that any smart city of this traditional approach is worth implementing, or even might be worth implementing; probably not. But of all the players, the one backed by a non-democratic regime with a track record of mass surveillance and human rights violations is surely at the bottom of the list.

It’s all about the process

That’s why whenever I speak about smart cities (which I do quite frequently these days), I focus on laying better foundations: We can’t always start from scratch when considering a smart city project. We need a framework as a point of reference, and as a guideline, and it has to make sure to keep us aligned with our values.

Some aspects to take into account here are transparency, accountability, privacy and security (my mnemonic device is TAPS); a foundation based on human and digital rights; and participatory processes from day one.

And just to be very clear: Transparency is not enough. Transparency without accountability is nothing.

Please note that this blog post is based on a previously published item in my newsletter Connection Problem, to which you can sign up here.

The 3 I’s: Incentives, Interests, Implications

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When discussing how to make sure that tech works to enrich society — rather than extract value from many for the benefit of a few — we often see a focus on incentives. I argue that that’s not enough: We need to consider and align incentives, interests, and implications.

Incentives

Incentives are, of course, mostly thought of as an economic motivator for companies: Maximize profit by lowering costs or offsetting or externalizing it, or charging more (more per unit, more per customer, or simply charging more customers). Sometimes incentives can be non-economic, too, like in the case of positive PR. For individuals, it’s conventionally thought of in the context of consumers trying to get their products as cheaply as possible.

All this of course is based on what in economics is called rational choice theory, a framework for understanding social and economic behavior: “The rational agent is assumed to take account of available information, probabilities of events, and potential costs and benefits in determining preferences, and to act consistently in choosing the self-determined best choice of action.” (Wikipedia) Rational choice theory isn’t complete, though, and might simply be wrong; we know, for example, that all kinds of cognitive biases are also at play in decision-making. The latter is for individuals, of course. But organizations inherently have their own blind spots and biases, too.

So this focus on incentives, while near-ubiquitous, is myopic: While incentives certainly play a role in decision making, they are not the only factor at play. Neither do companies only work towards maximizing profits (I know my own doesn’t, and I daresay many take other interests into account, too). Nor do consumers only optimize their behavior towards saving money (at the expense, say, of secure connected products). So we shouldn’t over-index on getting the incentives right and instead take other aspects into account, too.

Interests

When designing frameworks that aim at a better interplay of technology, society and individual, we should look beyond incentives. Interests, however vaguely we might define those, can clearly impact decision making. For example, if a company (large or small, doesn’t matter) wants to innovate in a certain area, they might willingly forgo large profits and instead invest in R&D or multi-stakeholder dialog. This could help them in their long term prospects through either new, better products (linking back to economic incentives) or by building more resilient relationships with their stakeholders (and hence reducing potential friction with external stakeholders).

Other organizations might simply be mission driven and focus on impact rather than profit, or at least balance both differently. Becoming a B-Corp for example has positive economic side effects (higher chance of retaining talent, positive PR) but more than that it allows the org to align its own interests with those of key stakeholder groups, namely not just investors but also customers and staff.

Consumers, equally, are not unlikely by any means to prioritize price over other characteristics: Organic and Fairtrade food or connected products with quality seals (like our own Trustable Technology Mark) might cost more but offer benefits that others don’t. Interests, rational or not, influence behavior.

And, just as an aside, there are plenty of cases where “irrationally” responsible behavior by an organization (like investing more than legally required in data protection, or protecting privacy better than industry best practice) can offer a real advantage in the market if the regulatory framework changes. I know at least one Machine Learning startup that had a party when GDPR came into effect since all of a sudden, their extraordinary focus on privacy meant they where ahead of the pack while the rest of the industry was in catch-up mode.

Implications

Finally, we should consider the implications of the products coming onto the market as well as the regulatory framework they live under. What might this thing/product/policy/program do to all the stakeholders — not just the customers who pay for the product? How might it impact a vulnerable group? How will it pay dividends in the future, and for whom?

It is especially this last part that I’m interested in: The dividends something will pay in the future. Zooming in even more, the dividends that infrastructure thinking will pay in the future.

Take Ramez Naam’s take on decarbonization — he makes a strong point that early solar energy subsidies (first in Germany, then China and the US) helped drive development of this new technology, which in turn drove the price down and so started a virtuous circle of lower price > more uptake > more innovation > lower price > etc. etc.

We all know what happened next (still from Ramez):

“Electricity from solar power, meanwhile, drops in cost by 25-30% for every doubling in scale. Battery costs drop around 20-30% per doubling of scale. Wind power costs drop by 15-20% for every doubling. Scale leads to learning, and learning leads to lower costs. … By scaling the clean energy industries, Germany lowered the price of solar and wind for everyone, worldwide, forever.”

Now, solar energy is not just competitive. In some parts of the world it is the cheapest, period.

This type of investment in what is essentially infrastructure — or at least infrastructure-like! — pays dividends not just to the directly subsidized but to the whole larger ecosystem. This means significantly, disproportionately bigger impact. It creates and adds value rather than extracting it.

We need more infrastructure thinking, even for areas that are, like solar energy and the tech we need to harvest it, not technically infrastructure. It needs a bit of creative thinking, but it’s not rocket science.

We just need to consider and align the 3 I’s: incentives, interests, and implications.