Updated Technology companies in the United States (US) have benefitted greatly from the pandemic. Users are spending more time on their products than ever before, while stock prices are hitting record highs. Amazon CEO Jeff Bezos alone has seen his net worth rise by over $70 billion in the last year. While this may seem like a continuation of the last decade of success, Silicon Valley is facing intense political headwinds that could completely overturn the way their businesses work.
With the familiar, moderate approach of the incoming Joe Biden administration, it might seem like technology companies can rest easy. But the days of regulators prioritising innovation over compliance may be over. The mood and context have completely changed, and the traditionally warm relationship between the Democratic Party and Big Tech is on the verge of becoming much more contentious. The political scrutiny that WhatsApp has faced for spreading fake news, mob violence and enabling surveillance may seem small compared to what's coming next.
Here are seven reasons why Silicon Valley is in for a rough time over the next four years. One, self regulation has failed. Perhaps the most valuable asset that the technology industry had was a cultural permission from the public to try new things. People have put up with companies cutting corners in the hope of improving on the status quo. But with YouTube recommending extremist content, Twitter getting mired in a geopolitical back-and-forth over borders, and Google accused of adopting anti-competitive practices with their payment services, the benefits of the trade-off are becoming less clear. Instead of arguing over whether there should be rules, we're now arguing over who should make the rules and how tough they should be.
Two, trust is broken. Witness how Mark Zuckerberg has gone from a national icon to a universal target of scorn and suspicion. A decade of lofty rhetoric about an open and connected world now falls flat, and a large section of the public sees Facebook as a data-hungry corporation that evades accountability and keeps its users addicted to its products.
Three, the backlash is bipartisan. One of the few things that both Democrats and Republicans agree on nowadays is that the technology industry has become too powerful. Whether it is Amazon decimating small businesses or Instagram sapping the attention of the country's youth, it's hard not to see an imbalance of power. There is growing consensus that allowing a small group of billionaires so much control over speech can be damaging for society.
Four, scrutiny is increasing inside Silicon Valley. Google used to promise to do no evil; now it appears to be suppressing anyone who suggests it may be doing harm. A recent controversy over the removal of Timnit Gebru, a well-known Google artificial intelligence ethics researcher, shows how bad this has become. Gebru co-authored a paper that warned about the societal risks of using a machine-learning approach the company commonly employs and was subsequently removed from her position in a cloud of controversy. This has caused a massive backlash within Google.
Five, the entire Democratic Party has moved to the Left. It's not common to find outspoken Trump supporters in Silicon Valley's rank and file. The Valley's predominantly liberal population — along with the rest of the Democratic Party — has moved to the Left on key issues such as workers' rights, wealth disparities, immigration, justice, and policing.
Six, the public has a better understanding of tech's dark side. For a long time, the benefits offered by smartphones, slick software, and constant connection were so obvious that any costs seemed negligible in comparison. Across the world, we've all seen our actions online lead to intrusive ads that follow us on Google and Facebook; we've all seen main-street businesses shut down through their inability to compete with e-commerce platforms' massive logistical and economic advantages, including the tax and regulatory favours they've been able to buy.
Seven, the future of labour and inequality is at stake. Few issues animate the Democratic voter base as much today as keeping corporate power in check and obstructing tax avoidance by the rich. With their enormous concentration of wealth, poor treatment of workers, and rampant arrogance, these tensions are moving at a much faster pace than expected.
Tomorrow's rising political stars across the globe are going to make their name standing up to Big Tech. Expect to see politicians run on reigning in companies or advocating for features to be adopted. Ambitious lawyers will push the bounds of anti-trust law, and the CEOs we used to look up to will soon become be blamed for issues they are responsible for, and many they are not. India might still be enamoured with Silicon Valley, but in the US, the honeymoon has come to an end.
Vivek Wadhwa is a distinguished fellow at Harvard Law School's Labor and Worklife Program and co-author of From Incremental to Exponential: How Large Companies Can See the Future and Rethink Innovation.
Tarun Wadhwa is the founder and CEO of Day One Insights and a visiting fellow at Emory University's Department of Political Science
Disclaimer: This article first appeared in Hindustan Times, and is published by special syndication arrangement.