Can start-ups fix the ethical problems of technology? – EUROPP – European Politics and Policy

Some critics of big tech companies have pointed to start-ups as key actors in advancing a more ethically aware technological landscape. Drawing parallels with philosopher Ivan Illich’s criticism of ‘growth mania’, LSE researcher Sebastian Lehuede, who worked on the Virt-EU project, argues that the ‘imperative to scale’ in entrepreneurial circles makes it difficult for medium and small-sized to prioritise ethics. As an alternative, he looks to Illich’s notion of a convivial society, and advocates for the collective discussion over limits to the ‘scale’ of technological development.

Start-ups certainly enjoy a much better reputation than big companies when it comes to the harms and threats of technology. Media articles have portrayed small businesses as flexible organisations capable of ‘disrupting’ the status quo and putting forward game-changing products and services. Moreover, growing trends such as ‘impact entrepreneurship’ have encouraged actors to develop businesses “that are more ethical and transparent, dislodging the dinosaurs that give the consumer a bad deal”. As the Virt-EU research team has also pointed out, some idealist developers are in fact “pushing back against the system” so as to “put ethics first” in the processes of design and business development.

Despite the above, an increasingly influential ‘grow first, monetise later’ strategy of business development can pose a threat to the capacity of start-ups to live up the expectations put on them. Business gurus, tech magazines and investors have been disseminating the idea that the first and foremost goal of small companies should be to scale-up as fast as possible. This imperative to scale pushes entrepreneurs to follow maxims such as ‘scale or die’ or ‘grow first, monetise later’, transforming the trajectory of companies such as Facebook or Amazon into recipes that are worth imitating. A toxic political economy of market incentives also supports this trend, with size becoming a fundamental metric for attracting investors.

Illich’s ‘growth mania’

Ivan Illich was a priest and philosopher who was born in Austria and lived in Italy, the United States and Mexico. In his book Tools for Conviviality (1973), he denounced the destructive effects of industrialisation by focusing on “man’s relation to his tools”. Authors such as Arturo Escobar have seen in Illich an opportunity to address the ‘crisis of the civilizational model’ that is underway. Also, his combination of political and ethical considerations in relation to technology resonates with the way we at Virt-EU have approached the Internet of Things.

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Illich argued that industrial capitalism made societies confuse means and ends, developing tools that make us dependent and, therefore, restrain rather than enhance our freedom. Resembling the mantra of ‘scale or die’, this harmful dynamic can be explained by a growth mania that makes difficult the task of collectively setting limits to the scope of technological devices and institutions. In Illich’s own words, “when an enterprise grows beyond a certain point on this scale, it first frustrates the end for which it was originally designed, and then rapidly becomes a threat to society itself”. “Beyond these limits, [machines] lead to a new kind of serfdom,” he  argued.

Our first impulse would be to say that Illich’s concern does not necessarily hold true nowadays. The adoption of decentralised and horizontal values that explain the rise of small companies can be interpreted as a safeguard against the harms of the previous bureaucratic-oriented spirit of capitalism. Do we still need to worry? Yes, we do.

Nowadays, entrepreneurs find themselves in a struggle between two conflicting discourses- one of growth and another of ethics, making it difficult for them to come up with financially sustainable and ethically sound products and services.

The Imperative to Scale in the IoT Ecosystem

At Virt-EU we set out to investigate the way IoT developers could put ethics into practice.

During our fieldwork in Belgrade, Serbia, a digital entrepreneur told us that he considered “timing” vital when it came to ethics. He explained that ethics were often taken into consideration not in the initial stages of a start-up and there was a belief that only after the company had achieved a critical size would it be the time to “start worrying about ethics”. For him, Facebook was an exemplary case of this strategy.

The approach advocated by this digital entrepreneur resembles what other authors have called ‘regulatory entrepreneurship’ and what my Virt-EU colleague Funda Ustek-Spilda calls ‘ethical postponers’, i.e. those who “tend to defer any ethical decision unless they absolutely need to respond to them”. What is interesting is that, from this perspective, ethics are not only ranked below growth in the hierarchy of priorities but also subsumed to the very logic of ‘growth mania’.

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Building upon Illich, it is possible to argue that beyond a certain threshold, attempts to change the course of a given technology can become increasingly difficult or even impossible. Therefore, injecting ethics late in the lifecycle of a start-up does not seem to be a sensible option.

In addition, some of the compromises implicit in the ‘growth or die’ mentality can have specific repercussions in the case of the Internet of Things. For example, common advice given to IoT entrepreneurs is to ‘avoid hardware’ as much as possible. Among other issues, dealing with physical devices involves figuring out distribution logistics and providing complex technical support systems. However, a critical setback of compromising on the ‘hardware’ dimension for the sake of growth is that start-ups end up losing their capacity to influence the realm of ‘things’, clearly a fundamental aspect of IoT products. In this way, big tech companies retain their dominant role in the design and development of phones, televisions, city infrastructure and other fundamental objects of our daily life. In contrast, start-ups are left with the task of coming up with software that could adapt to those objects.

Retooling Society

There are clear drawbacks to the effects of the ‘imperative to scale’ in the development of Internet of Things technologies. This mentality manifests itself in start-ups in the form of justifications to postpone ethics to a later stage or in efforts to shape technological products and services so as to fit the criteria of scalability. It is important to point out the powerful discourses and market incentives that can make it difficult for entrepreneurs to carry out the “retooling of society” that Illich considered fundamental to repair some of the social damages produced by modernity.

An important question would be how to move on from the imperative to scale, a dimension in which Illich’s normative ideals can also strengthen ethical frameworks being employed to analyse technology and businesses.

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In the view of Illich, discussions on the ethics of technology need to take into consideration the ‘scale’ of technological developments and aim at establishing limits over their size and scope so as to ensure that humans would not end up becoming their slaves. Illich considered that this was the only way to avoid what happened with the private car, for example, who ended up making all citizens having to pay for roads that transformed the city in a way that affected all other modes of transport.

Importantly, Illich considered that these limits need to be set through collective deliberation in order to avoid what he called managerial fascism, in which the ‘tooling’ of a society is subordinated to the choices of a small group of experts. Illich’s vision of a ‘convivial society’ implied bringing about social arrangements that could “guarantee for each member the most ample and free access to the tools of the community and limit this freedom only in favour of another member’s equal freedom”. This can only be advanced by including the voice of ordinary citizens in the debate.

Illich’s ideas can make two significant contributions to the ongoing discussion on the ethics of technology. Firstly, his focus on limits could help with the urgent task of prioritising discussions about ethics and market regulation, providing a vocabulary capable of addressing these two aspects. Secondly, his call to locate discussions about technology in the collective public debate implies advocating not only for transparency and accountability, but also advancing democratic control. In the field of entrepreneurship, key actors such as seed funders, angel investors and start-up incubators need to create channels of communication with the citizenship in order to establish limits for our tools and how they are built.

Author’s acknowledgement: This article would not have been possible without Funda Ustek-Spilda’s support and thoughtful comments.

This article represents the views of the author and not the position of the Media@LSE blog, nor of the London School of Economics and Political Science.

Featured image: Photo by Leon Seibert on Unsplash


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