Sector Report


Standing at a Crossroad

The tech sector needs to embrace transparency and civic responsibility to fulfil its potential.

Societal trust in the technology sector is declining – driven by major data privacy breaches, tax avoidance, the use of technology platforms by rogue players to undermine democratic processes and a lack of adequate government regulation and oversight.

Yet against this backdrop of distrust, tech companies have continued to push forward with innovations that drive economic growth and help humanity tackle pressing social and environmental challenges. The sector stands at a pivotal moment where changes will be necessary to rebuild trust and realize the sector’s full potential to shift society toward a more sustainable future.

“In 2019, there will be increasing focus on opportunities to apply technology to help a range of industries drive smarter decisions and resource efficiency, develop circular economy solutions, and drive improvements in supply chain responsibility practices.”
Suzanne Fallender, Director, Corporate Responsibility Office, Intel Corporation

Signals to Watch

Moral Code Under Fire

For long the most trusted sector, trust in technology companies and their services (especially big Internet companies) has been declining, presenting reputational and commercial risks for the sector. Technology companies are increasingly challenged by consumers and other stakeholders to demonstrate the positive social impacts of their products and services on the communities in which they operate. Emerging technologies such as autonomous vehicles, blockchain and AI remain the most poorly understood and least trusted by the public.

Emerging technologies such as autonomous vehicles, blockchain and AI remain the most poorly understood and least trusted by the public.

  • Trust in search engines and social media platforms has decreased in many countries, with the steepest decline in the US.

  • Tech companies’ security practices, particularly Apple, Google and Amazon have been the main cause of declining trust. A survey conducted by Fortune magazine found Facebook to be the least trusted of major tech companies when it comes to safeguarding user data.

  • Edelman’s 2018 Trust in Technology report found that emerging technologies are the least trusted by the general public with blockchain trusted by slightly under 50 percent, self-driving vehicles at 50 percent and artificial intelligence at 56 percent.

  • Around half of US adults would like technology companies to be more heavily regulated, according to a survey by Pew Research Center.

  • Americans are deleting or changing the way they use Facebook, and some brands (P&G and Mars) are cutting digital ad spend due to data safety concerns.

AI for Good

Artificial Intelligence (AI) and machine learning are set to transform industries across every sector and have the potential to accelerate efforts to tackle the world’s biggest societal and environmental challenges. Critical obstacles remain in their development and deployment, and the debate continues on how AI will impact employment. Innovators grapple with the challenges associated with building applications which incorporate security safeguards, avoid racial and gender biases and respect human rights. The challenge for tech companies will be to ensure research and development builds systems which have equity, security and ethics at their core.

  • Accenture estimates that AI could double economic growth rates in 2035 by changing the nature of work and could increase labour productivity by up to 40 percent.

  • Studies estimate that anywhere from 14 to 54 percent of US workers have a high probability of seeing their jobs automated over the next 20 years.

  • Worldwide spending on cognitive and artificial intelligence systems is expected to reach $57.6 billion in 2021.

  • The annual value of AI is expected to be highest in the electronics, consumer packaged goods and retail sectors, according to McKinsey analysis.

  • Companies are taking actions to prove that AI technologies can be used for good – such as Microsoft AI for Earth which aims to create AI-based solutions across agriculture, water, biodiversity and climate change.

  • Studies have highlighted how AI can reinforce race and gender biases due to technology being developed by teams dominated by white men.

AI has broad potential to advance the Sustainable Development Goals. McKinsey analyzed a set of AI use cases and mapped them against the SDGs. Source: McKinsey Global Institute

Fighting Waste with Reuse

Before it banned e-waste imports, China was taking in 70 percent of the world’s electronic waste. Since the ban, Thailand, Laos and Cambodia have become top destinations for e-waste from North America and the EU. As a result, these Asian countries are now facing critical levels of environmental pollution from e-waste recycling. Faced with growing concern about waste and supply chain impacts, a growing number of technology companies are adopting innovative circular economy solutions in order to reduce reliance on finite materials, recover valuable minerals and reach new customers and markets.

  • Apple has unveiled its new MacBooks made with 100 percent recycled aluminium. The company recently announced an ambitious goal of moving to a closed-loop supply chain where products are built using only renewable resources or recycled materials.

  • Dell has been an industry leader on recycling and has recently helped found the NextWave Plastics coalition, which aims to create a global network of supply chains designed for collecting and reusing plastics.

  • A recent report found that many consumer products made from recycled electronic waste contain toxic chemicals and calls on the EU to define e-waste as hazardous.

  • Technology companies are facing growing backlash for planned obsolescence of their products, and Right to Repair bills are being prepared for 2019 across many US states as momentum grows to slow the amount of new hardware on the market.

What to Expect in 2019

2019 will likely be another volatile year for the tech sector. We will see technology companies face greater distrust and scrutiny from governments, employees and broader society. An increasing number of companies will follow in the footsteps of Amazon, who recently launched its Sustainability Data Initiative, as they seek to secure their identities as good corporate citizens. Established tech companies will work to strengthen corporate messaging regarding the social and environmental value of products and services, but this approach will likely fall flat with informed stakeholders unless it is backed by meaningful action and increased transparency.

What This Means for Business

  • Embrace transparency

    Lack of transparency is one of the greatest barriers to trust currently facing the tech sector. From sharing ethical frameworks governing the development and deployment of new technologies, to accepting taxation in the countries in which they operate, tech companies need to embrace transparency and a sense of civic responsibility.

  • Engage beyond the technology sector

    Tech companies have a role to play in developing the capabilities of innovations but achieving the potential of technology cannot be accomplished by this sector alone. Businesses in other sectors play a crucial role in connecting technological expertise with critical human needs. Only through this collaboration can the benefits of technology be distributed as widely and as evenly as possible.

  • Understand your lifecycle impacts

    The full lifecycle of many technology applications and products is yet to be understood. Companies must invest to understand the effects of technologies - from development through to application. Only by doing so can these impacts start to be addressed.

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