Tech Tightrope: Europe’s Alternative to Silicon Valley

 

Jonathan Pichot analyzes if Europe's vision of technological innovation could be one rooted in its communities.

 
Illustration by  Eddie Stok  for Are We Europe

Illustration by Eddie Stok for Are We Europe

 

Software is eating the world. With every bite, it embeds a particular set of values in the everyday infrastructure of our lives. Modern software platforms mediate our attention, they shape the way we work, how we talk to each other, how we entertain ourselves, and who we fall in love with. With such power, it’s time we understood what values are embedded in the tools we use every day.

In his address to the World Economic Forum in January 2018, Emmanuel Macron spoke of the social and economic disruptions caused by new technologies, emphasizing the unique perspective Europe can bring to the inevitable rewriting of modern life. “Europe has a responsibility and a role vis-à-vis China and the U.S. because our vision, our DNA, in terms of the relationship between freedom, justice, fairness and individual rights, is unique,” Macron said. “You can only find this balance of values in Europe.”

Whether or not he intended it, Macron was alluding to the power of values embedded in technology. He rightly pointed out that Europe, if it is to keep its social values in a world run by software, has a responsibility to encourage companies and entrepreneurs to embody its definition of freedom, justice, fairness, and individual rights. Because at the moment, American and Chinese tech companies have a significant head start.

But just what would European tech values be? How might Europe create a technology sector that embodies the particular ways in which Europeans articulate their values? If software is eating the world, what kind of software-driven world do Europeans want to live in? Can Europe build its own coherent vision of innovation, setting it apart from the American model of corporate data collection on one hand, and the Chinese state’s support of mass surveillance on the other? This is a tall order.

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When we talk about software today, we’re really talking about the internet, and the multitude of applications—on browsers and phones—that connect to it. While the internet is global, software, like anything grown and shaped, has a place of origin, a terroir. And, though Chinese software is quickly gaining a foothold in the West, the origin of most major software platforms Europeans use today is from the Silicon Valley. This modern software industry came of age in a particular environment, with a particular way of seeing the world. Like wine, whose characteristics are affected by the sun, soil, and heat of its terroir, software is also affected by the values, incentives, and culture of the humans that create it.

In other words, software is not value neutral. It is the result of economic, political, and cultural forces that point technological development in a given direction. It is shaped by government regulation and spending, by investors and their preferences and biases, by consumer habits, and by social norms. Assumptions about the ideal way of tackling human problems are built into the apps we use, in ways both subtle and explicit.

Ponder, for example, the six reaction emojis in a Facebook post: Like, Love, Haha, Wow, Sad, Angry. What spectrums of feeling are missing? Do these emoji reactions correctly translate to all of Facebook’s 2.3 billion users? The challenge of translation and cross-cultural communication is not new; what is new is that one platform—designed by a cohort of mostly white, mostly Western men—mediates how one third of humanity communicates. Another example is how nearly all software is written in English. As much as the interfaces of apps are translated into different languages, the underlying code, the names of variables and how logic is written, is almost exclusively written in English. When software developers talk to each other online, they speak and write in English.

Software is a cultural artifact, not just a tool. And to understand the culture of software, it’s useful to know some history.

 
Like wine, whose characteristics are affected by the sun, soil, and heat of its terroir, software is also affected by the values, incentives, and culture of the humans that create it.

In the 1950s, as the competition for military and aerospace dominance between the United States and the Soviet Union began in earnest, the U.S. government invested heavily in research and development through technology institutions around the Bay Area. This government spending led to the invention of the semiconductor and a number of companies to build them, laying the foundation for the personal computing revolution we are still experiencing today. The wealth from these companies would seed the emergence of venture capital in the region in the 1970s.

In a fluke of history, the strongest manifestation of the American counter-cultural movement would also appear in the Bay Area. The “Summer of Love”—the iconic gathering of over 100,000 people looking for spiritual and political transcendence—took place in San Francisco in 1967. By the 1970s, a revolutionary counterculture had firmly taken root in the region. The revolutionaries and the technologists inevitably mixed, simply by proximity, and created the unique culture of Silicon Valley. The combination of high-technology and utopian idealism—of ambitious capitalism and political libertarianism—forms the underlying DNA of tech companies today.

This mix is sometimes referred to as the “Californian Ideology,” most famously in an essay by Richard Barbrook and Andy Cameron, who sum it up as “a mix of cybernetics, free market economics, and counter-culture libertarianism. The Californian ideology offers a fatalistic vision of the natural and inevitable triumph of the hi-tech free market.” Perhaps the most iconic archetype of the Californian Ideology is Steve Jobs, at once ruthless businessman and spiritually-inclined hippie.

Fast forward to today, where Silicon Valley entrepreneurs, without irony, seek to change the world—and become billionaires along the way. The Californian ideology is young, individualistic, casual, and globally ambitious. It is driven by an underlying optimism in technology as a force for good. In particular, there are three tendencies in the Californian ideology that blind it to the ways in which technology can cause harm, and keep us from imagining other ways of pursuing innovation. The first is the obsession with scale, powered by the financing model of venture capital. The second is a tendency towards “solutionism,” the still too common notion that wicked social problems have technological solutions. The third is an ahistoric imagination, where products and projects are pitched as though the world is a blank slate, with no history or baggage. If European citizens are to define their own values of technology, they would do well to first examine those coming from California.

The search for scale is the most powerful force projecting the Californian ideology around the world. Scale is how the venture capitalist (VC) system finds its returns. The lifeblood of the Silicon Valley economy, VC works by making bets on a large number of companies with the assumption that the vast majority will fail, but that a few will make such large returns as to offset all other losses. Venture-funded businesses are looking for “returns to scale,” that is, business models that have exponentially increasing returns as the company gets larger. These start-ups often make huge losses at smaller scales but are believed to be profitable if they can scale to a dominant enough size to control the vast majority of the market. This makes them to do unsustainable things to gain customers, marketshare, and global dominance. Uber, as a case in point, lost over $5 billion in the second quarter of 2019 alone.

 
Rather than search for a European unicorn to confront American and Chinese tech giants, imagine a rich European ecosystem of Mittelstand tech companies, rooted in their communities, spread across the Union.

There are already critiques of the venture capital model within the tech industry itself. Danish-born entrepreneur David Heinemeier Hansson (known online as DHH) is known for having built his company, Basecamp, without any venture capital. In books, blog posts, and tweets, he tirelessly points out the self-defeating pact entrepreneurs make with VCs, handing over parts of their companies and thus the freedom to grow at a reasonable pace, or to stop growing entirely and settle into a sustainable size. Once a company has taken VC funding, its investors expect it to grow, be acquired, or die trying.

There are alternative models—the “Indie maker movement” is a promising one. These technologists proudly bootstrap their companies, aiming for small teams and sustainable business models that can support themselves. These are “lifestyle” businesses that are meant to support the founders and teams that build them over the long term. In this way, they are similar to the Mittelstand of Germany—the small to medium-sized manufacturing businesses that make up the backbone of the German economy. Basecamp, the company in which DHH is partner, is known for the trust and freedom it gives its fifty employees. Like the Mittelstand, it’s privately owned, sheltered from the whims of VCs, and provides stable, high paying jobs with regular hours and strong benefits.

Rather than search for a European unicorn to confront American and Chinese tech giants, imagine a rich European ecosystem of Mittelstand tech companies, rooted in their communities, spread across the Union. Such an ecosystem might prove more resilient to economic shocks, with risk spread across many smaller, adaptable actors rather than a handful of massive companies. It would certainly be more effective at building tools that support the European values of freedom, justice, fairness and individual rights that Macron described in his speech.

European governments can encourage a Mittelstand tech sector in a variety of ways. One way is by setting platform standards. In the same way the EU standardized GSM technology for phones or electric car charging systems on the continent, there are opportunities to do this for many more software services. Cities, in particular, are in a strong position to set standards: from temporary housing rentals, to on-demand taxi services, to the proliferation of bikes, scooters, and other micro-mobility offerings, European cities are yet to realize that they do not need to rely on global companies like Airbnb or Uber to provide these services. Instead, they should set rules that embody their local values, encouraging a Mittelstand tech sector to build and innovate on top of the standards the city sets out.

Some cities have already started doing just that. Barcelona, under Chief Technology Officer Francesca Bria, is reimaging the relationship between government, tech companies, and the data citizens produce. In an essay in The Guardian, Bria writes, “We envision data as public infrastructure alongside roads, electricity, water and clean air. This common data infrastructure will remain open to local companies, co-ops and social organizations that can build data-driven services and create long-term public value.” By taking back the data sovereignty of its citizens, Barcelona is setting an example for how technological innovation can function in service of citizens rather than venture capital. Focused on empowering citizens, and driven by local government, it is a strong signal of how Europe might define its own values of technology.

 
By taking back the data sovereignty of its citizens, Barcelona is setting an example for how technological innovation can function in service of citizens rather than venture capital

If European tech companies were to focus on smaller, locally-scaled problems, they would also be less susceptible to the Silicon Valley tendency towards solutionism. The blindness of solutionism is to see all problems as solvable with the current tool in hand (blockchain is the latest technology to experience this). Mix this with the limited perspective of tech companies clustered in the same region, and you have a severely limited way of approaching a problem. If Europe is to avoid the trap of the current culture of tech, it needs to invest in its own ways of defining solutions.

While he was head of Arup’s Digital Studio, Dan Hill explored how cities might design platform services for their needs, rather than for global companies. He proposes that cities invest in an “understanding service”—a team whose job is to carry out ethnographic and design research with citizens, working to frame problems and iterate on locally appropriate solutions. He documents the project in his essay, A Cloud Atlas for Eindhoven, and Believing in Society over Unicorns. “Making these systems locally is not merely important in terms of increasing the likelihood of producing more grounded, appropriate and self-determined solutions (and thus likely to be more used, engaged with, as well as more focused in the first place), but also in terms of a key message,” Hill writes. “Can we co-opt the dynamics of ‘Big Tech,’ without inheriting the broadly unrepresentative ideologies and cultures they are produced within, and create solutions that take advantage of their techniques but are honed for European cities and communities?”

Some are beginning to reimagine how governments might frame the kind of problems worth tackling. The Institute for Innovation and Public Purpose at University College London, founded by economist Marianna Mazzucato, has set out to reimagine what public institutions in the 21st century should look like, with one primary focus of research on “mission-oriented” government policy. This kind of policy sets ambitious, shared goals—like putting a man on the moon, or eliminating carbon emissions from the economy—and invests in an ecosystem of actors working towards that goal. In her February 2018 report to the European Commission on mission-oriented innovation, Mazzucato outlined how Europe might build a mission-oriented approach to solve the greatest problems of our time. She describes missions as “primarily a way to orchestrate the rich diversity of talent and expertise that today lies mostly fragmented or untapped across Europe.” They “provide a solution, an opportunity, and an approach to address the numerous challenges that people face in their daily lives.”

This is precisely the kind of thinking that is necessary to build a software industry with European values. Imagine a European Mittelstand tech sector, in concert with mission-driven government, grounded in the local challenges facing European citizens.

 
Questions of power and politics make most software developers uncomfortable, but software has always been political. Its builders just ignore it.

The self-given mandate of Silicon Valley is disruption. The Californian ideology, in its search for a better world, prefers to start from scratch rather than fix, maintain, or build on top of old systems. There is an underlying assumption in much of Silicon Valley tech culture that a clean break from the past is ideal. This is an ahistoric imagination. It assumes a blank slate and ignores existing actors.

Occasionally, this myopia is humorous. When then CEO of Uber Travis Kalanick described a new shared ride service at a conference, explaining, “The driver picks one passenger up, picks another passenger up, drops off the first passenger, but then picks up passenger number three and drops off passenger number two,” many were quick to point out that what he was describing was in fact, a bus. But ignoring history is not always funny, particularly when building tools that shape people’s thoughts and impressions of each other. Of all places, Europe understands the weight of history in this regard, and how societies must guard against misinformation and ideas that dehumanize others. Questions of power and politics make most software developers uncomfortable, but software has always been political. Its builders just ignore it.

Now, a tech backlash is in full swing. The universal claim that technology will always change the world for the better is under heavy scrutiny. We’ve connected billions and billions of people to the internet, but just because we all use the same emojis, centuries of history, conflict, and geopolitical posturing are not being erased. As the pace of change accelerates, our ways of communicating, of working, our social contracts, are themselves under strain.

Macron ended his speech in Davos with a warning. “We are doing everything we can to encourage these technological changes in France, but we are not being careful,” he said. “If we do not establish some kind of framework for them,” the process of creative destruction will quickly devolve to the survival of the fittest. “To live in a completely Darwinian world is not good.”

The Californian Ideology’s insatiable thirst for scale, its tendency to look for technical solutions to “wicked problems,” and its willful ignorance of the past and politics are leading us towards a Darwinian world. Europe has the pieces to put together a viable alternative. It would do well to encourage an ecosystem of smaller tech companies, not unicorns. Active government and mission-oriented policies should imagine a new horizon of innovation. And it should rely on the lessons it has learned from history about human nature. It’s time that Europe built a technology industry grounded in its particular understanding of freedom, justice, fairness, and individual rights.


 

This article appears in Are We Europe #5: Code of Conscience


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