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Written on 4 Jun 2021 by Claire Melamed

From steam power to data power: learning from history about how to manage technological change

Data and digital technologies are upending systems and relationships everywhere. As new companies rise and fall, and as societies adjust, at the heart of this new world is data, writes Dr Claire Melamed.

Big data – harvested from us every moment we use our phones, visit websites, and walk the streets – quantifies and opens up more and more areas of peoples’ lives to scrutiny. The opportunities flowing from new products and services, powered by that data, drive economic growth and change. Digital platforms, driven by real time data and it’s use for profit maximization, are upending employment relationships. Governments and companies are using algorithms to process data and make decisions that affect people’s lives:  who gets state benefits or what media we consume via online platforms.

Governments are scrambling to catch up – to harness the very real benefits that these data-driven products and services can bring, but also to curb the harm they can do. 

We have been here before.  Two hundred years ago it was the steam engine and the factory that were transforming economies and societies.  Then, as now, a new set of laws and norms were created by individuals, companies and governments struggling over how to distribute the costs and benefits, and risks and rewards, in the new economy.

What can we learn from this history to help understand the present and improve the future?  Over the next two years, my research will look at the policy choices of the past, in order to inform the political debates and decisions being made now about the uses and abuses of data in the present and future.

Data as raw material

The past guides the future partly because it shapes how we think. People struggle to know how to think about data: ‘data is the new oil’ is probably the most commonly used metaphor. Many people loathe this comparison, for good reason, but it’s easy to see why it resonates – the idea of data  being a raw material, whose control can lead to riches in the new economy, is one that fits with much of what people know about how data is being treated in the world today. 

If we use the above metaphor, what lessons can struggles for resources during the industrial revolution carry for today’s heated public and political debates on data and technology? The current debate suggests a few useful lines of enquiry:

  • Concentrations of wealth and power. Data is certainly conferring wealth like oil did in the last century, and like land in previous economic eras. Just like a century ago, when Standard Oil was broken up by the US government, regulators today worry about the economic and political effects of the concentration of economic power in the hands of a few. If the historical analogy that guides today’s thinking is data as oil, then it’s not surprising that a large amount of the regulatory and policy attention to data has focused on anti-trust law and competition policy. On a smaller scale, some models are emerging for how to control data assets in a different, more accountable, way – for example through data trusts. Whatever the outcomes of these developments, looking at past attempts to control concentrations of resources – the political drivers and the economic and social consequences – may offer some lessons for regulators today.
  • Commoditization and limits of resource extraction. The industrial revolution was powered not only by fossil fuels but also by exploitation through colonization and trade which drew new places and people into the web of resource extraction. Today, the idea of ‘data colonialism’ draws the same analogy with data, and the way that people’s lives are quantified and appropriated as a resource. The policy implications of this analogy are necessarily more far reaching than competition policy, but it raises the question of what raw materials, and from whom, are legitimate to use for profit. What the social and political consequences of this expansion might be are driving much of the public debate now, as they did centuries ago in a very different context.
Data as a product

Data, unlike oil or coal, does not lie passively in the ground waiting to be found. Another way to think about it is as a product, produced by people – millions of us clicking, liking and buying online every minute of the day.  ‘If you’re not paying for it, you’re the product’ is probably the second most common data cliché of the day. 

If data is the product, the central issue is the conditions under which it is produced. The first industrial revolution led to new battles between workers, factory owners and trade unions, over wages and contracts. There were political upheavals as new forms of work and opportunities for profit changed social conditions and relationships. What might this suggest about possible trajectories for policy and politics in this era?

  • Distribution of benefits. There is already a debate on whether we, as producers of data, should benefit in some way.  The analogy is not perfect, but we do know that questions over the distribution of risks and profits between companies and workers are rarely resolved without a struggle. Changing the distribution of profits between workers and employers has usually depended on workers’ ability to demand what they consider to be a fair share. It’s unlikely we’ll see a trade union of the nearly two billion active Facebook users in the world, but how can questions of the distribution of benefits between different groups reveal policy options and implications to inform today’s debate?

  •  Distribution of risks. In agrarian economies the farming household controls it’s own risks, but on the factory floor the responsibility is shared between employer and workers, and regulated by the state. This shift did not come without a struggle, as workers forced compromises over unsafe or unacceptable working conditions. Today’s newer debate and policy agenda is about privacy and the risk of harm to individuals and to groups, from the use or abuse of data by companies or by the state, but some of the questions at issue are strikingly similar to those of the past. How can, and should, risks be controlled? Is it acceptable to devise tools and algorithms to deliberately maximise the time people spend on social media? Whose responsibility is it to define acceptable levels of risk at a social and individual level?
Political change and accountability

The economic and social changes of the industrial revolution put huge pressure on political systems – which were ultimately reshaped in response to new demands for increased representation and accountability.  Suffrage was extended, trade unions legalised, and the modern architecture of government – from income taxes to the professional civil service – were all created in this period.  It’s far from clear how, if at all, politics will be reshaped in response to this new moment of technological change – but the past might offer a map for how to think about the present. Questions around the accountability of powerful institutions, who is represented in democratic processes, and how to reshape politics to accommodate social change are all just as relevant today. 

At the heart, these are all questions about how to balance individual and collective risks and rewards, and how to distribute economic and political power within societies. Our current systems reflect the trade-offs and compromises negotiated in the last era of major technological change.  While the changes wrought by digital technologies might not be quite so transformational as the changes brought by the steam engine and the assembly line, a look back at some of the key moments that created the system we have today may offer lessons for how to respond to the challenges of this moment.

  • About the author

    Claire Melamed, Affiliated Researcher

    Claire Melamed is the CEO of the Global Partnership for Sustainable Development Data. This growing network brings together several hundred members - governments, private sector, and civil society - to harness and leverage data and data technology towards achieving the Sustainable Development Goals.   Learn more