Planning for the future means thinking about data

IF you can see it in your mind you can hold it in your hand. This captioned a great photo of a very young Lisa Carrington and Rob Waddell doing the social media circuit during the Olympics.

Of course, the outstanding Carrington is not the only one taking a longterm view.

Capturing my attention recently in this regard is China with its crackdown on technology companies.

China easily surpasses the Western world in the game of patience and while we could debate who wins at the game of strategy and supremacy.

China has focused for many decades on intergenerational outcomes, not the next election nor the bottom line that will be presented at the end of the reporting season to shareholders and institutional investors.

So what is going on at the moment? Well perhaps it started last year when Chinese regulators halted Ant Group’s recordbreaking IPO, leaving Jack Ma, of Alibaba, laying low.

More recently, we have seen companies from ridehailing to video games and education entities, among others, come under scrutiny, leaving investors nursing losses.

These are not small loses either; we are talking somewhere in the order of

$US1 trillion ($NZ1.4 trillion) in recent months.

I will leave others to opine about the Communist Party and the political ideologies affecting this technology crackdown as the State Administration of Market Regulation flexes its muscles.

Nor am I qualified in what this means for a challenge to US supremacy or the phrase used which is being well analysed presently (disorderly expansion of capital) and how the investing landscape will unfold in the period ahead.

What I am interested in is the data aspect in these discussions.

China positioned itself well in the preceding two decades as it embraced technology development as a future driver of economic growth.

Innovation has been strong across sectors and some of China’s technology giants are some of the world’s most valuable companies.

Unicorns are found in many sectors, including AI and big data.

However, you cannot have a digital economy without strong data privacy protection, and as China looks to the future, this is what it is considering now.

When we reflect on traditional economic theory, it would suggest that the four factors of production are land, labour, capital and the secret sauce that brings it all together, entrepreneurship.

Some might suggest that data has added further to that sauce recipe or perhaps now is a unit of production in its own right.

Indeed, you do not have to look too far to see digital markets maturing and data discussions entering the board packs.

Companies that amass data build their core strength as they store, process and transfer this data.

Of course, as tempting as it may be to develop your own data pool and hoard information (as you may do other assets) and run some clever AI over the top at some point in the future, a certain Privacy Act might remind you why that isn’t necessarily a longterm winning strategy.

Regulation will provide the guardrails for you but your use of data will involve value judgements, boardrooms require plenty of those.

Perhaps an interesting development that highlights this is Apple’s recent child protection policy.

Included in a pending update, Apple will be scanning photos for child sexual abuse material alongside messages sent and searches undertaken.

It is a very laudable goal indeed, yet the noise on this is loud as the marketplace considers whether Apple has gone a step too far.

Has the company left the back door open for governments to request access to the data previously fiercely protected and representing the privacy of the average Apple user?

Others fear that this creates a blueprint for ‘‘hacking’’ the endtoend encryption system.

Judgement was undoubtedly required around the Apple board table as its continued social licence and leadership capabilities met security, and consumer and stakeholder perspectives.

Throw in a bit of government and regulation considerations for an extra challenge . . . what a great debate that board meeting would have had.

So data, the commodity of the future is clearly here and with it, some questions for us all.

Just as China is trying to create logic and strong foundations of the longterm digital economy, so, too, should you consider this inside your own organisation.

As China defines its rules and regulations on how entities can trade in citizens’ data and operate their technology empire, so might your business reflect the same for your customers.

Not sure where to start? I presume you have already had, and have on an ongoing basis, conversations about cybersecurity and keeping that same data safe.

Perhaps, then, an easy way to begin is by reflecting on some personal data of your own.

It’s quite challenging to consider that my health information could be a commodity or my shopping habits open for analysis.

As my health tracker data or transactions are sliced and diced, I can only hope the organisation involved has a defined data strategy considered carefully and plainly explained to me.

Should I be worried about how you keep score and what privileges that might present to me as a result? Should it define my priority status in your business? Who is keeping check on the ‘‘fairness’’ of that framework?

What about facial recognition?

Am I unwittingly being matched with a photo instore, those postgym chocolate purchases being observed and added to my health ‘‘profile’’?

Is this coaching me to the right outcome or thinly veiled surveillance?

What about as I go home and open the fridge, triggering a connected sensor that monitors my every consumption out of it?

The internet of things sounded so great when it first hit.

Would my view be different if my data, anonymised of course, supported social initiatives that benefit many people in dietary choices and helped, for example, reduce type 2 diabetes?

Should my health data be tradeable, and if so who with and in what country and for what purpose?

What government authority should have access and why?

Am I OK with AI leveraging my data to encourage me to spend more without knowing whether I either can afford or really need that new health product?

Would I rather the company dealing with my data continues to pursue soft technology developments that support me personally, or should it invest in deeper strategic goals (or hard tech) that create bigger societal outcomes?

Is longterm scientific advancement of greater importance than my convenience as I navigate the online world now and spend money, thereby generating profits?

These are not easy questions, whether you are a SME, large corporate or indeed a country with an eye to the future.

So just as you deal with rules, regulations and value judgements for other units of production, namely land and labour, so, too, will you for data.

The benefits of technology are undoubtedly praised by China’s leaders, but the consequences are increasingly being scrutinised and expectations laid.

This is not about the share price of China’s technology companies today or tomorrow but intergenerational change beyond the next election cycle.

Just like Lisa Carrington, China also knows how to play the long game.

Data is the fifth factor of production and if they hold that gold medal factor in their heads then certainly they have the motivation to hold it in their hands.

Trish Oakley is chairwoman of the Otago Southland branch of the Institute of Directors (IOD). This article is opinion only and not intended as governance advice. The IOD is the professional body for directors and is at the heart of New Zealand’s governance community.