Leaders in and out of government worry that regulation and policy are not keeping up with the pace of change.
“I’m very worried,” says Neelie Kroes, who has served as a vice president of the European Commission since 2010. “The changes in technology nowadays are so fast that we have to change our mindset. This is my biggest frustration in the commission. It takes so much time for governments to know what is at stake. We can’t consult ten times about issues like we did in former times.”
Kroes’s concerns are widely shared, especially in the United States. Says Steve Case, who spends as much time as any major tech leader working with leaders of both parties in Washington: “The pace of innovation continues to accelerate and outstrip the ability of governments to react.” Technology’s influence is spreading into virtually every sector of society and every process of business and human interaction, but few are confident government will respond to the changes with sufficient speed and understanding. Tech-oriented companies are taking aggressive action in transportation, financial services, energy, education, and health care. And we’re seeing innovations like digital currency Bitcoin; new online systems that exploit the personal data of citizens; self-driving cars, drones, and other developments in robotics; the increasing ubiquity of sensors and cameras controlled by business and individuals; and rapid advances in synthetic biology and genomics that bypass or render irrelevant traditional drug-testing techniques. Every one of these developments poses challenges to existing regulatory regimes, which were designed in a different era.
Worries are growing across the tech industry. Longtime Silicon Valley entrepreneur and investor Reid Hoffman asks, “How do we get smart government that can both find new opportunities and counter threats?” Jeffrey Bleich, a tech industry lawyer, recently returned from four years as U.S. ambassador to Australia. “It was stunning coming back and hearing people in Silicon Valley and Washington talking completely different languages,” he says. “The government has sort of lost the plot of what is happening in tech.” Says Brad Smith, chief counsel for Microsoft: “Tech advances at different rates in different time periods, and the government moves at different rates as well. But I think we have an especially important and pronounced problem right now, because we’re living in a time of rapid technological change, when government in the U.S. is shackled by intensive gridlock.”
Part of the problem is the increasingly aggressive nature of tech entrepreneurship. “Today’s emerging Internet…stars are trying to change our laws as much as they are trying to change our technology,” wrote Ron Klain, chief counsel for Washington-based venture capital firm Revolution LLC, in a recent Fortune article. (President Obama recently appointed Klain his special “czar” for fighting Ebola.) In an email, Klain notes that companies like Uber and Airbnb are “launching businesses that might not be legal at launch, with the hope that the rules will get changed later.” The attitude, he says, is “just do it.”
Such aggressiveness was manifest when a senior Uber executive in Europe recently told the Wall Street Journal “The public are already voting with their fingers, the question is can we get policy makers to kind of catch up to that. We’re open for that debate, if they come to us and say we like what you’re doing, but here are our concerns.” In the past, companies didn’t generally ask governments to endorse them before they would submit to regulation. And some in the U.S. tech industry seem determined to drive an even deeper wedge between themselves and Washington. Investor Chamath Palihapitiya, a former senior executive at Facebook, recently called the U.S. government “completely useless,” adding, “Stasis in the government is actually good for all of us. It means they can neither do anything semi-useful nor anything really stupid.”
But government also faces increasing pressure from ordinary citizens, empowered by the tools made available by technologists. That may disempower regulators and legislators. A young citizen in Beijing, concerned about pollution, began in 2012 to regularly fly a kite carrying an inexpensive data sensor to measure airborne particulate levels. She posted her readings on Sina Weibo, China’s version of Twitter. The U.S. embassy shortly began publishing online similar readings taken on its roof. After that the Chinese government finally began publishing its own previously secret pollution data. A similar citizen-driven effort to measure local radiation levels after the Fukushima nuclear meltdown forced the Japanese government to acknowledge the severity of the problem. The so-called Safecast initiative was assisted by the Media Lab at MIT. It now aims to arm citizens globally with sensors to monitor pollution of various sorts. “Low-cost sensors will be the biggest driver in the future for environmental cleanup,” says Fred Krupp, president of the Environmental Defense Fund. “It’s all about transparency and real democracy.” In the past, monitoring was government’s job.
Ryan Calo, who teaches law at the University of Washington, worries about a lack of government resources. “There isn’t enough technical expertise in government,” he says. Calo notes that when a crisis arose in 2009 regarding sudden acceleration in Toyota automobiles, some suggested the problem might lie in vehicle software. But the Department of Transportation did not have the expertise to research it. “So they went and asked NASA to take a break from keeping the space station running and driving robots on Mars to look at this Toyota,” marvels Calo. (NASA’s report found no software glitch.) Calo now argues for the creation of a new federal agency—”a repository of expertise, which like NASA has a whole bunch of computer scientists, whose job is to advise other agencies and congress.” A similar agency called the Office of Technology Assessment advised congress after 1972, but was abolished by Republicans in 1995.
Calo studies the legal and ethical implications of robotics, and finds numerous reasons to worry about the U.S. response to them. “This disconnect between knowledge and policy will be harmful,” he warns. He notes that Nevada, influenced hastily by Google, passed a law to accommodate self-driving cars in 2011. But the law was written to cover fully autonomous vehicles like Google is developing, not the proliferating partially autonomous ones sold by Audi and others. It had to be repealed and rewritten. The Food and Drug Administration approved the use of robotic surgery techniques, but then safety concerns emerged. “The FDA may have moved too quickly on approving robotic surgery,” says Calo, “whereas I and others believe the Federal Aviation Administration is holding up drones unnecessarily.” Many in academia were outraged when the FAA in July sent “cease and desist” letters to journalism professors at the University of Nebraska and the University of Montana who used drones in their classes. Public institutions, the FAA said, must get authorization to operate in public airspace. Meanwhile, anybody can buy a drone from Amazon for $40.
Another senior European Commission official, Robert Madelin, who oversees 1,200 tech experts as director general of Communications Networks, Content, and Technology, believes the pace of change raises questions about the very structure of society’s decision-making processes. But he also says things could be worse. “You wouldn’t want to live in a society where government could typically get ahead of change,” he points out. “That would mean you could only use things if the government said you could.”
And in the U.S. there are glimmers of progress. President Obama recently appointed well-liked former Google executive Megan Smith as his new chief technology officer. Tech experts across the federal government are increasingly coming together seeking to nudge policy. And the startup most known for bare knuckles, Uber, in August appeared to foreshadow a more collaborative style when it hired David Plouffe to coordinate global political and policy efforts. He was President Obama’s 2008 campaign manager and communications advisor. Amazon, Apple, and Google have all been trooping to the Food and Drug Administration as they seek to develop new health-related products and services. Google, for example, is creating a glucose-monitoring contact lens for diabetics.
Hoffman says he’s eager to meet with any congressperson who wants to discuss how tech can help solve national problems. “But I’ve met ministers here in Silicon Valley from the U.K., Singapore, France, and Canada, among others,” he says. “Very few congresspeople come through, other than with their hats held out for checks.”
Key veterans of the Washington dialogue remain optimistic. Says Microsoft’s Smith: “Just as one could look at the beltway and say it doesn’t understand Silicon Valley, you can say Silicon Valley doesn’t understand the beltway. The only way to get progress is to increase mutual understanding in both places.” Adds Steve Case: “If we don’t get this right—engage in the right ways, get key things done—it will hurt the U.S. and in the long run hurt the entrepreneurs, too. Getting this right will be a big challenge for the next wave of innovation.”
Techonomy aims to encourage this dialogue. Our first Techonomy Policy conference is June 9, 2015 in Washington. This article appears in the 2014 Year-End Edition of Techonomy Magazine.