I am flying back from three days in the Bay Area. I presented the results of the Edelman Trust Barometer to four individual clients, met with three venture capital firms, and attended a salon dinner and breakfast briefing for 100 people with panelists from Coursera, Uber and CNet. We also unveiled some new research for California which has some very ominous signs for the industry.
First, the good news for the industry: technology remains the most trusted sector in the vast majority of the 28 countries we survey. Trust levels range from 90 percent on the high end to 60 percent on the low end. The best-known CEOs tend to be from the industry, including Facebook’s Mark Zuckerberg, Microsoft’s Bill Gates (though not the CEO anymore) and the late Steve Jobs and his successor, Tim Cook, both of Apple.
Now, the warning signs: there is a much lower level of trust for many of the new offerings from the technology sector, including cloud computing, autonomous vehicles, cyber currency, virtual reality and the Internet of Things, with levels in the 60 percent range for informed publics and even lower for the general population.
The California data shows particular vulnerability for the industry. Over half the respondents in the Bay Area – the ‘home’ of the sector – said that the growth of the technology industry is hurting the poor. Forty-three percent said tech sector growth is hurting the middle class. Over half describe tech CEOs as greedy (note this week’s revelation of a $199 million pay package for one of the industry’s leading CEOs). The most common complaints blame the technology industry for soaring housing prices and traffic, which are considered negative externalities of the sector’s growth.
Is all of this hurting the industry? Consider these recent actions by government. The San Francisco Board of Supervisors has asked Facebook to stop its bus service for employees commuting between its Silicon Valley campus and the City by the Bay. The Indian Government has refused Facebook’s offer to give free access to the internet to those unable to afford it. The Trans-Pacific Partnership (TPP), vital to exports and global supply chain, is imperiled by the adamant opposition of both ends of the political spectrum in the U.S., from Donald Trump to Hillary Clinton. The European regulator in Brussels is demanding a much more stringent approach to privacy of data from American companies such as Google.
A year ago I had a very animated exchange with a top venture investor in Silicon Valley. His basic contention was that new companies should focus on building their business, keep their heads down, make sure the product works well and delivers for customers. I responded with a plea to consider the wider world, the context in which the companies are operating. Many of the unicorns are disrupting long standing business models, imperiling wage structures with part time work without benefits, and circumventing government oversight.
The smart innovator explains the benefits not only to consumers but also to society. The transparency on customer experience offered by Uber, for example, should have a parallel track of openness to constructive interaction with the government and community. The CEO of the company should be known not simply for vast wealth but also for concern for employees and commitment to listen to complaints. In one of my meetings during the week, a CEO told me about a visit to Washington, DC to brief elected officials, who had a very incomplete understanding of the business model and felt much better having connected with an executive, instead of a lobbyist.
My advice to the technology players is to pay attention to their public impact, think of their customers not only as consumers but also as citizens, real people facing complex economic and social challenges, be part of the solution to high local housing prices in the Bay Area, and work on education issues and other ways to include the “other half” (kudos to Mark Zuckerberg and his wife Priscilla Chan for their involvement in East Palo Alto schools and to Marc Benioff, CEO of Salesforce.com, for his generosity to the Children’s Hospital in San Francisco). It is not enough to have great products and services; the technology industry must take the lead for business in assuring that change is good for all.
Richard Edelman is president and CEO.