Labour's Digital Strategy Is a Missed Opportunity

The pace of technological advancement is double-edged.

The pace of technological advancement is double-edged. Left to its own devices, technology can entrench the exploitation implicit in our economic system. On the other hand, it also has tremendous emancipatory potential. Sadly, Labour’s current digital strategy ignores the latter in favour of an embrace of the status quo.

Monday night marked the first keynote speech by Liam Byrne MP as Labour’s new Shadow Digital Minister. In a short talk entitled “Britain’s Digital Future”, Byrne set out what he would do as Minister of State for Digital, a role which is currently held by Conservative MP Matt Hancock and whose responsibilities include broadband, internet governance and the digital economy.

Those familiar with Byrne’s political history are unlikely to have high expectations for his new role. An MP since 2004, Byrne has held a number of roles under New Labour, most notably Chief Secretary to the Treasury under Gordon Brown, and in 2015 referred to Tony Blair as his “political hero”. His primary claim to fame comes from a note he left for his Treasury successor saying “I’m afraid that there is no more money,” which the Conservatives immediately brandished as evidence of Labour’s profligacy. Neither is his private sector experience particularly inspiring: he worked for consulting firm Accenture and investment banking firm N M Rothschild & Sons before founding a technology startup called “e-Government Solutions Group” during the height of the dotcom era. What’s more, it appears that the role of Shadow Digital Minister wasn’t his first choice; he was appointed to the role soon after losing his bid for chair of the Business, Energy and Industrial Strategy department.

I was not familiar with Byrne’s political history or views prior to the event. Accordingly, I had high hopes for the keynote, which I thought would clarify Labour’s plan to fairly distribute the benefits of technological change. Instead, Byrne focused primarily on the higher productivity of the technology sector, and concluded that we simply need more tech workers and entrepreneurs—topped off by multiple attempts to plug his book Dragons: How Ten Entrepreneurs Built Britain.

The most frustrating aspect of the event was the disconnect between the political sentiments expressed and the actual policy proposals set forth. On the surface, Byrne’s comments were heartening: he self-identified as a socialist, decried the harm caused by neoliberalism, and asserted the role of politics in democratising the wealth generated by technology companies. His policies, on the other hand, with their emphasis on investing in digital skills and fostering entrepreneurship, seemed scarcely any more progressive than what the current government has already proposed.

Chasing higher wages

Byrne’s first proposal of the evening came down to getting more people into the technology sector, where wages are 36% higher than average. This marked the first of several dubious conclusions based on a shallow interpretations of statistics. The fact that a self-proclaimed socialist would see this wage premium as somehow indicative of the greater merit of such jobs—rather than the result of a distributional struggle between labour and capital—is bizarre, to say the least. Expanding the supply of labour will only benefit capital, and given the low rates of unionisation within the technology profession, there’s a real risk of wages and conditions being driven downward as a result. As a result, promoting digital skills solely because they’re currently being rewarded by the market is a doubtful approach to setting long-term societal priorities.

Technology startups as a panacea

Underlying Byrne’s optimism for the technology sector is a naive faith in its greater productivity. As he writes in the Guardian, the goal is to transform the UK into an “innovation nation”, a sentiment which is eerily similar to Philip Hammond’s comments during the announcement of the 2017 budget. During the keynote, Byrne showed the following graph from venture capital research outfit CB Insights, featuring technology corporations that attained valuations of $1 billion or more within the last 6 years:

A graph showing the date when various private technology corporations attained valuations of $1+ billion, since 2011

Byrne’s takeaway was that these technology companies are able to generate enormous amounts of wealth, and can do so quicker than ever before. Once again, he appeared to take the numbers at face value: the idea that we might be in another dotcom bubble, with startups fetching unjustified valuations due to a glut of venture capital chasing increasingly elusive returns, was not once acknowledged.

Neither did he mention that of the companies shown on the chart, some have since failed spectacularly: e-commerce site Gilt Groupe, which raised $280 million, recently sold for $250 million, and wearable startup Jawbone raised more than $900 million before completely shutting down earlier this year. Some were embroiled in massive scandals, like Theranos, which was once valued at $9 billion and now appears to be falling apart after the efficacy of its technology was questioned; Zenefits, which is valued at $4.5 billion and was recently fined by the SEC for flouting insurance laws (it has since laid off many of its staff and changed its business model); and Hampton Creek, valued at $1.1 billion and plagued by accounting fraud and misleading product claims. Still others have reached these valuations on the basis of naked exploitation of precarious workers, like Uber (valued at $68 billion) and Deliveroo ($2 billion).

All of this raises the question: do we truly need more billion-dollar startups? Do the majority, or even any, of these startups really produce social value commensurate with their lofty valuations? Magic Leap, an augmented reality startup that has raised almost $2 billion to date, has not yet produced a product, and it’s unlikely that anything it does produce in the near future will be much more than an expensive toy for the rich. Coinbase, a cryptocurrency exchange valued at $1.6 billion, owes its valuation to the rise of Bitcoin, which presently consumes enormous amounts of energy despite rarely being used for actual transactions. What’s more, these companies tend to create very few of the well-paid jobs Byrne venerates—at the most extreme end, WhatsApp, which sold for $19 billion in 2014, had 55 employees, and Instagram, which sold for $1 billion in 2012, had a mere 13.

Consequently, Byrne’s unreserved promotion of technology entrepreneurship feels stunningly myopic, as if he’s wholly ignorant of how much public sentiment has lately turned against the tech sector. As Erin Griffith writes for Wired earlier this week:

As headlines have exposed the troubling inner workings of company after company, startup culture no longer feels like fodder for gentle parodies about ping pong and hoodies. It feels ugly and rotten.

A lot of this comes down to systemic factors: due to the incentives of venture capitalists, the startups that get funded are more likely to pursue easy profits than attempt to address an actual societal need. There are some investors trying to counter that, but unless there’s an ecosystem shift towards social entrepreneurship, it’s hard not to see Byrne’s wholehearted embrace of technology ventures as an irresponsible strategy that will only result in more people addicted to their phone. The combination of a narrow fixation on productivity metrics with extra money funneled into tech will just result in more pointless startups, most of which will eventually fail, leaving behind nothing but lost time and some branded t-shirts. Those that survive will only turn into corporate monoliths whose sole purpose is to turn the living world into commodified zeros and ones.

Digital democracy

The most bizarre part of the evening came at the end of the keynote, which was dedicated to announcing the launch of a website called The People’s Plan for Digital. According to ComputerWeekly:

The online plan is a collaborative effort in which the public and industry can add and debate their ideas on how to improve digital across the UK.

A more cynical view would be that it’s a way of soliciting ideas for Labour’s digital strategy because Byrne doesn’t have any of his own. The website itself is privately hosted, with the footer stating that it is “developed and promoted by Liam Byrne MP”, and a spokesperson from Byrne’s office confirmed that the intention is for the website to remain private, with the suggestions to be compiled into a paper presented by Byrne at next year’s party conference.

So far, promotion of the website appears to have had limited success: as of time of publication, only 30 “ideas” have been posted, with 9 of them coming from Byrne himself (presumably to spark discussion). Byrne’s own posts include this bafflingly vague one entitled Use corporation tax to increase digital skills, which borders on supplication:

What: Ask large corporations to pay a little more while still keeping UK corporation tax among the lowest of the major developed economies. We can then use the extra revenue to contribute to the skills budget.

and this one, A dedicated commission to fix the gig economy, which only contains the following lines:

What: We need a dedicated commission to modernise the law around employment status.

Why: Rapid changes in the world of work (many thanks to digital advances) are rendering existing employment categories outdated.

Overall, The People’s Plan might be a well-intentioned attempt at inviting more democratic input, but the present implementation leaves much to be desired. If Byrne is serious about digital democracy, his work can’t end with this project; he’ll have to push for the creation of a government-provided service, accompanied by some form of governmental accountability to ensure that the ideas are actually considered. While the digitisation of democracy is a laudable goal, it’ll take more than half-hearted attempts like this one to make any significant progress.

Regulating the tech giants

The only reassuring part of the evening came during the discussion of how to regulate the contemporary technology giants. Byrne acknowledged their monopolistic drives and tax avoidance habits and affirmed the role of the government in fixing those problems. More encouragingly, he addressed the data advantage possessed by advertising platforms like Google and Facebook, and suggested giving consumers more control over what happens to their data, in line with the EU’s GDPR. Still, though, he didn’t tread a line that was much more radical than what Hancock is already saying, and there was certainly no call for anything resembling public ownership.

Labour needs a bold vision

The keynote, and Labour’s current digital strategy more generally, was a disappointment. The challenges posed by the speed of technological change, and the increased dominance of technology companies over our lives, will require a government prepared to take a more active role in directing the development of technology towards creating societal value. Given that Labour’s manifesto was a bit light on the tech front—certainly there were no radical promises akin to scrapping tuition fees or renationalising railways—it falls on the Shadow Digital Minister to fill in the gaps. Unfortunately, Byrne’s unsubstantiated techno-optimism feels like a return to the days of New Labour, with little that seemed distinct from what the Tories have on offer.

The thing we have to remember is that we’re in uncharted territory here. Some of the technologies that pervade our lives today are so new that governments can’t just rely on old tricks. But there’s a flip side to that: Labour can be the vanguard here, setting the standard for other governments to follow. Labour could design a strategy that harnesses the full power of today’s technologies, ensuring that they serve society as a whole and aren’t just locked up within a corporation for the purpose of increasing shareholder value. After all, part of the reason behind Labour’s recent resurgence stems from the fact that they’re not just bringing back the Third Way—instead of compromising with the status quo, they’re offering a compelling alternative vision. The enthusiastic reception to Labour’s manifesto shows that there is room for a more radical political landscape, and there’s no reason the same principles shouldn’t apply to the digital sphere as well.

A socialist digital strategy

Moving beyond Byrne’s direct purview, what Labour needs is a truly socialist digital strategy. The aim is simple: to free innovation. What we think of as innovation is almost always within a private corporation, and it’s predicated on the commodification of information—be it data, or code, or design patterns—through the framework of intellectual property rights. Something that should be a commons is increasingly becoming enclosed, resulting in one of the greatest tragedies of our age: the commodification of our personal data by private corporations, primarily for the purpose of convincing us to buy more things we don’t need.

More than anything else, we have to ensure that important technological innovations—many of which were initially funded by governments—become public goods, and don’t remain trapped within the private sector. This means we have to be comfortable with reducing the size of the private sector when it could improve baseline living standards for everyone. That could take the form of funding more open source software, or it could mean increasing the scope of the government to provide important services, by competing with or even replacing private alternatives. Labour’s intention to improve Internet connectivity by investing in broadband is well-intentioned, but why not take it one step further by providing it as a social right, or maybe even as part of a larger suite of universal basic services?

We shouldn’t limit our imagination there, though. There are so many services that are currently private but don’t need to be. Digital teams within the government, such as Government Digital Services, could be empowered to increase the scope of services they produce. Why is Citymapper—a for-profit company—allowed to own and monetise our location data? Why is there no alternative to Uber as part of the public transit system? And what about a government-provided e-commerce platform to rival Amazon’s marketplace, neatly integrated with the soon-to-be-renationalised Royal Mail? Or a government-provided basic website service for individuals and small business owners who lack the know-how to set one up themselves, and must instead turn to paid solutions like Squarespace or Wix?

If these ideas seem unusual, that’s only because these technologies are new enough that governments haven’t yet had the time or the political will to catch up with them. We’re in the midst of a chaotic moment of dizzying technological change, and although that means it’s hard to keep up, there also lies an opportunity. Instead of sitting back helplessly as new technologies transform the socioeconomic landscape, we could be bold enough to confront them head-on to ensure that they’re beneficial for the many, not the few. Not only should we push back against the increasing scope of privatisation by tech companies creeping into our everyday lives, we could challenge these companies outright, not just via regulation but by providing competing public services to weaken their hold. This is especially relevant for digital products that have an inherent tendency towards monopoly due to network effects and data ownership, where it’s hard to see how anything but a government-funded alternative could compete.

Above all, we have to look at technology as an opportunity: not just a way of solving the problems we have now, but as a way of redesigning the problem space entirely. If the power of politics lies in its ability to imagine a better world, the power of technology lies in its potential to bring us there. That doesn’t mean that governmental use of technology is an unabashed good, though; left to its own devices, technology will just take on the values of the neoliberal landscape in which it is embedded. One can imagine a where you can apply for your chance to be exploited by whichever corporation has placed the highest bid, or an app for means-testing welfare benefits, or an Uber for the NHS, complete with surge-pricing.

Ultimately, while the challenges presented by technology are great, the opportunities are even greater. Automation might pose a threat to jobs, but it could also allow us to redesign society to reduce the primacy of work while securing better living standards for all. However, as long as technological development is primarily fostered by private corporations, for whom generating revenue and creating societal value are not necessarily aligned, we can’t just assume things will turn out okay.

Given the magnitude of the task at hand, whoever takes on the role of Digital Minister when Labour comes into office has a huge responsibility. The power of technology to transform society is obvious; whether the transformation is good is not a given, and techno-optimism is only wise to the extent that it doesn’t become an excuse to abdicate responsibility for technology’s failings. We shouldn’t expect technology entrepreneurs to fix all of our problems, and we should question the power of companies like Facebook and Google. If we want to ensure that the benefits of technology are spread equally, we’ll have to widen our imaginations of what a government should provide and take responsibility for. Only then can Britain’s digital future be one of liberation.


Wendy Liu (@dellsystem)

Wendy Liu is the author of Abolish Silicon Valley.