How has digital technology affected two key aspects of daily life, transport and finance? New report looks behind the statistics to explore people’s life experiences.
Digital progress can only be made if the technologies are positively contributing to peoples’ quality of life and economic opportunity, say Cambridge economists. The challenge for innovators developing AI tools, for businesses deploying the technologies, and for policymakers and regulators setting the right framework for the economy, is to ensure this happens now.
A new report from the Bennett Institute for Public Policy explores what fundamental difference digital technologies are and could make to the daily experience of life. They focus on the domains of transport and FinTech – both of which have experienced significant changes in provision and business models due to the use of data and digital tools, but not everybody has benefitted.
“Goods and services as defined in conventional economic terms according to how they better enable individuals or communities to lead the kind of lives they want,” says lead author, Diane Coyle, Bennett Professor of Public Policy. “We need to focus on the benefits of the technology to be widely shared, and for the technologies to enhance people’s opportunities rather than restrict them. Then we will be able to see economic and social progress.”
The team behind the report found three broad themes needing to be addressed if there is to be broad-based trust in the progress of the digital economy for the common good.
Firstly, a key area needing more focus is measuring the value created through data generation, access, and use. Who can access and use the vast amounts of data being collected, and who benefits from the resulting services? Little attention has so far been paid to missed opportunities and forms of exclusion in measures of progress – to those who are digitally less visible.
The economists question whether the technology is in some cases affording predatory innovation and if so how this might be addressed. They say these insights are crucial for informing decision-making as to how to ensure progress is widely shared, and to address overlapping inequalities.
The report highlights a second challenge concerning the need to think in terms of network models, and the resulting wedge between private and social value. It looks at how external benefits from network effects are captured by private providers and distributed, and suggests to benefit all parties to some extent there should be a key coordinating role for public bodies.
Thirdly, geographic distribution is important when looking to understand the effects of digital services in relation to where people live and the opportunities available to them because of where they are. Technology offers the potential to reduce place-based inequalities but may actually reinforce them if this is not addressed.
The economists call for localised research to better understand the needs of a community and to ensure that those who may not be recorded – or who are underrepresented – in emerging data models, are represented in decision-making that affects such fundamental aspects of their lives.
“As with all important technologies there are pluses and minuses. In the areas of transport and finance where convenience and affordability are paramount for people’s lives and opportunities, there are some evident benefits from innovations – such as time-saving in travel or improved user experience and convenience in finance – but also some important doubts about whether the benefits are appropriately widely shared,” says Stephanie Diepeveen, Research Associate at the Bennett Institute for Public Policy.
Against a background of the cost of living crisis and a decade of rumbling doubts about how well the market model is functioning, there is also reason to believe digital and the use of data are exacerbating some inequalities. This is a failure when the technology holds so much potential to do the opposite.
The research raises the fundamental concern that progress requires a balance between individual and community interests which has not yet been found; only when this is achieved will digital innovation improve the economy and peoples’ life experiences.
Report: Understanding Progress in a changing society
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.
