The first two months of this year has indeed been dramatic in South Africa with some large IT companies being exposed for decidedly shady and corrupt dealings. It would be interesting to see how the reputational damage plays out for these companies and how stakeholders respond going forward to ensure better governance.
Together with the evidence uncovered at the Zondo Commission of Inquiry into State Capture, the winds of change are indeed starting to blow in our country for the better.
But let’s not digress.
In our regular E-zine we normally focus on the forecasting of technology trends, which we identified as a definitive focus on areas including AI, Augmented Reality, Big Data Analytics, Blockchain, I.O.T and Automation for 2019.
For this edition of the newsletter we wanted to consider some of the issues that the global tech sector may face in the coming year. We have tried to identify 3 key areas that deserves closer scrutiny:
Data privacy and security
The spotlight on how companies like Facebook and Google use people’s data to sell advertising and for other purposes is sure to drive much of the discussion during the next two years. In America, senators have been pressing Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg over the Cambridge Analytica scandal and Russia’s use of Facebook to spread political misinformation.
Owing to the recent spate of privacy scandals, the implementation of the General Data Protection Regulation rules in Europe and a privacy bill passed by California set to go into effect in 2020, the U.S. is poised to pass its own consumer privacy legislation in the near future.
As this gains momentum, the House and Senate in the US are expected to pass several new laws around protecting consumer privacy in 2019.
Companies such as Uber and Lyft, hire huge numbers of independent contractors, (without benefits), as drivers on a global basis. The benefit for the contractors is flexible working hours, but the greater perk is to the companies that does not have to provide the workforce benefits to them that normal employees would be entitled to. This includes a bigger share of the profit generated by their own work. So, in essence the lift-sharing business model is actually depended on the extremely low wages that drivers are being paid.
Sen. Bernie Sanders of Vermont, who is expected to join the 2020 presidential race, will take aim at tech companies for employing workers as independent contractors as well.
Ride-hail companies aren’t the only ones that will face criticism. Looking at companies such as Instacart that relies heavily on independent contractors to deliver online grocery orders also falls in this category. The same business model is being utilised by Amazon in building out its logistics network currently.
Owing to the working conditions and poor wages being paid by Amazon, Mr. Sanders was instrumental in getting the company to increase its minimum wage to warehouse employees to $15 an hour three months ago.
In an interview on Bloomberg in 2018, President Trump last year referred to Amazon, Facebook and Google as a “very antitrust situation”.
This is based in part on the fact that Google, Facebook and Amazon have each used their scale to diversify into new businesses and increase their power. For example, Facebook’s purchases of WhatsApp, Instagram and Oculus or Amazon expanding into everything from the public cloud to video streaming and its purchase of Whole Foods. This behaviour could increase pressure for these companies to be broken up from an antitrust (monopoly) perspective.
Another criticism that is often levelled against Amazon (and other big tech companies) is that it uses it purchasing power and scale, to squeeze out smaller rivals.
The European Union said earlier this year that it is investigating whether Amazon uses data it collects from sellers on its platform to cannibalize their businesses. In America, the FTC is responsible for investigating these issues. The response so far has been to hire a prominent Amazon critic last year and to hold events to discuss, among other things, new technologies and how antitrust should be enforced in the 21st century.
Certainly, an interesting year ahead for the global tech sector you would agree!
In conclusion, we will be hosting our Thought Leadership Workshop at the Century City Convention Centre on the 28th of March, featuring the iconic speaker Arthur Goldstuck from World Wide Worx.
Watch out for an invite shortly to stay abreast of this latest technology market research!
Thank you as always for your continued support of First Technology.
Johan de Villiers