As the rich, famous, and powerful overrun Davos this week, it’s easy to imagine the annual World Economic Forum meeting as a lot of elbow rubbing and champagne guzzling. After all, it attracts a constellation of diverse stars like IBM CEO Ginni Rometty, U.N. Secretary-General António Guterres, Facebook COO Sheryl Sandberg, Cate Blanchett, Elton John, and U.K. Prime Minister Theresa May among the 3,000 attendees. But beyond parties, gabfests, and more parties, does the WEF serve a purpose?
Yes, although the real work is happening not on the slopes of Davos, but on a hill overlooking the Golden Gate Bridge. The location, in Presidio National Park, illustrates how the Forum and key member companies have shifted their focus in recent years to the promise and perils of emerging technologies. After all, San Francisco has become the global capital of a tech industry with companies that are as influential as countries. “The tech companies were having an increasing impact on pretty much every foreign policy issue that we were dealing with,” says Zvika Krieger, who served as the U.S. State Department’s envoy to Silicon Valley in the Obama administration’s final year.
In early 2017, the WEF recruited Krieger and Silicon Valley entrepreneur Murat Sönmez to establish its first major office outside Switzerland, bearing the ambitious name World Economic Forum Center for the Fourth Industrial Revolution. Funded by tech giants like Salesforce and Microsoft, the center has already helped Rwanda create new national policies to spur a commercial drone industry. A project the center runs with Boston and autonomous car software maker nuTonomy is evaluating how city governments can adapt to self-driving cars. And a group of tech and insurance companies it’s convened is figuring out how to prevent connected gadgets from getting hacked. Meanwhile, India, Japan, and the United Arab Emirates have just announced plans to open their own satellite offices, and the WEF says that more on the way.
Technology Gone Wild
The center’s mouthful title comes from a theory pushed by WEF founder Klaus Schwab that we have moved beyond the classic digital age, to something far more radical and world-altering, with technologies like gene editing, artificial intelligence, and quantum computing. This Fourth Industrial Revolution was the theme of the 2016 Davos meeting, where Schwab introduced a book by the same name. (He just published a follow-up .)
“You actually saw quite a distinct change within conversations in the Forum between three and four years ago,” says Andrew Maynard, director of Arizona State University’s Risk Innovation Lab, “from focusing on global geopolitical issues [and] economic issues to realizing that technology innovation was vastly influential and important with where society is going.” Maynard serves on one of WEF’s global future councils but doesn’t work with the San Francisco center.
The concern is that new technologies like artificial intelligence, cryptocurrencies, autonomous cars, and genetically customized “precision medicine” are so powerful, pervasive, and fast-changing that they can spin out of control. “You saw this shift to realizing that if we’re actually going to build a better society, not only do we need technologies, but we need to develop them in the right way, the responsible way,” says Maynard. Automation may wipe out jobs by the millions. A drone industry free-for-all could result in raining debris. The internet of things (IoT) with lights, thermostats, cars, and every other conceivable device connected to the net is already a playground for hackers and a sieve for the personal information those devices capture.
“There was a sense that something big is happening in the technology space, and like we know we’re supposed to care about it, but A, we don’t understand it, and B, we don’t know what to do about it,” says Krieger. “This is what governments were saying—heads of state, presidents, prime ministers, cabinet members.” He’s overflowing with ideas and unconcerned about overshooting the 45 minutes his staff allotted for our first meeting at the center in November, in a plainly furnished room with a view of the Golden Gate Bridge. Dressed in khakis and a pinstripe blue-and-white shirt, Krieger has a casual, West Coast manner far from the stuffy stereotype of international power players. He often drops the word “like” into sentences.
Krieger’s task is to convene all the stakeholders—public officials who regulate technologies, businesspeople who build them, and citizens who use or are affected by them—to craft inclusive, plug-and-play policies that governments or companies can try out.
Starting last March, with just Sönmez, Krieger, and an office manager, the Center for the Fourth Industrial Revolution now has three dozen staffers, with plans to hire many more. Teams are brainstorming projects in nine technology areas: artificial intelligence, internet of things, blockchain, autonomous vehicles, drones, precision medicine, international e-commerce, and environmental protection. Krieger recruited experts from business, government, and nonprofits alike, including Lyft, the U.S. Chamber of Commerce, and the New York City mayor’s office.
The center has signed on 38 companies and five countries—Rwanda and Japan when it launched last year, and Bahrain, Denmark, and the UK this week. (City, state, and regional governments can also join, although none have yet.) Governments send staffers to the center for 12- to 18-month fellowships where they work with experts to craft public policies that their country will essentially beta test. “In order to partner with us, you have to commit to piloting what we design here at the center, before it even exists,” says Krieger. “You have to trust the Forum and our process enough in advance to commit to that.” The goal is to have 20 of these projects going at once, and Krieger has gotten many more applicants than that.
First out of the gate, and just announced at Davos, is Rwanda’s new policy to kickstart a commercial drone industry. “Rwanda has been trying to leapfrog into modernity for the last decade,” says Carlton Jones, a Deloitte development consultant who has spent years in the country. “They invested heavily in their science and technology programs . . . with hopes of exporting knowledge to the rest of [East Africa],” says Jones, who is not affiliated with the WEF.
In 2016, Rwanda partnered with San Francisco-based Zipline to launch the world’s first large-scale drone delivery system—shipping emergency blood supplies to rural clinics. In 2017 it worked with the WEF center to expand the industry with a policy of so-called “performance-based regulations.”
Instead of prescribing technology and design requirements for drones, the Rwandan Aviation Authority sets targets for a level of safety and lets the drone operators propose how to achieve it. The goal is to avoid strict regulations that quash experiments with new designs and technologies. This kind of approach fits the country’s culture, says Jones. “As for performance-based frameworks, Rwanda is also one of the innovators . . . in having a government that must deliver,” he says. “All civil servants have performance contracts, and if found wanting, are sacked.”
The new drone policy isn’t just for Rwanda, though. The goal of the Center is to quickly try out a new policy, see what works and what doesn’t, and apply the lessons in other countries. Even the U.S. government is keeping an eye on Rwanda’s experiment, says Krieger. “Our whole approach is prototype, test, and iterate,” he says. “Get this out there. Either get government to start trying these things out or get companies to start trying these things out.”
Some projects are meant as alternatives to government regulations. The first of these is a set of security standards for IoT devices. “The problem with these connected devices is that there isn’t really a market incentive for device manufacturers to adhere to a baseline standard of device security—everything from passwords to over-the-air updates,” says Krieger. Or as security guru Bruce Schneier put it in a 2016 Washington Post op-ed, “The sellers of those devices don’t care: They’ve already moved on to selling newer and better models.”
Schneier was opining just after the October 2016 Mirai attack, in which a botnet infected tens of thousands of routers, web cameras, and DVRs, using them to launch an attack that took down huge chunks of the internet. Far larger IoT botnets have sprung up since then.
Makers of industrial IoT devices would welcome security standards, says Krieger, as long as there’s some penalty to keep their competitors from cheating. While governments are just starting to talk about regulations and laws, tech and insurance companies in the WEF’s industrial IoT Safety & Security Network have already drafted security protocols. One goal is that insurers would require lower liability premiums for facilities using gear that meets the standards. So device makers that skimp on security would lose sales. It’s like how electrical devices must meet safety requirements to get the all-important UL seal of approval.
“We could have said okay, the way to solve this issue is to get government to legislate baseline standards for IoT security and safety,” says Krieger. “But that would have been a heavy-handed approach, and the stakeholders that we convened thought that we really could drive more impact through as a private-sector driven project.”
Can They Do This?
Queue the color guard waving red flags. What the WEF and member companies call collaboration, critics might call backroom dealing. And where Krieger sees businesses taking initiative to solve problems that governments can’t, others might see them sidestepping government authority.
“Involving corporations in major decision making and in governance over key areas of work is quite problematic in the sense of very often they represent vested interests,” says Brid Brennan, a researcher at the Transnational Institute, a frequent WEF critic. Brennan tracks issues like mining operations, which have devastated local ecosystems and forced thousands of people from their homes. Voluntary conduct standards haven’t helped to curb those abuses, she says, and she doesn’t trust them for tech companies. “Final decision making in relation to the functioning of technology really is a matter for government,” says Brennan.
There’s long been a perception that Silicon Valley is more evolved ethically than companies from previous industrial revolutions. But with Facebook hosting fake news and terror recruitment, Uber flaunting regulations around the world, ISPs quashing federal privacy protections, and seemingly every company facing gender discrimination complaints, the shine has worn off. “Over the past few years, there’s been a growing recognition, particularly in Silicon Valley, of the need for tech companies to take responsibility for the societal impacts of their technology,” says Krieger.
The WEF and its critics differ not so much on the problems that technology poses as on the role businesses should play in the solutions. The San Francisco center must contend with decades of criticism leveled against the WEF and founder Klaus Schwab. “What exactly is he advocating [with the center]? Did he learn anything from building his . . . empire with the old technologies, the old industries?” says Oliver Classen, media director for Public Eye.
From 2005 to 2015, the organization held a counter event in Davos, bestowing ignominious awards on WEF member companies (largely mining and financial firms) that it judged to have the worst environmental, human rights, or other abuses. Classen accuses Schwab of embracing those companies rather than using his influence to push for reform.
None of the San Francisco center funders—such as Kaiser Permanente, Palantir, SAP, and IDEO—raised red flags when I showed the list to Classen, but few companies are free of controversy. Funder Deutsche Bank recently settled a tax fraud case with the U.S. government, for instance.
Collaborations that design government policies might sound like backroom dealing, I tell Krieger. “We are religious here about every conversation [having] representatives from government, the private sector, from civil society, from academia. We even have a youth community [and] a religious community,” he responds. “And if we are having a conversation about a particular sector, we have to have multiple representatives from each sector.” Krieger describes the Center’s work as open-source. Once complete, the policy documents are published online, listing everyone who worked on them.
In Krieger’s view, the WEF conversations generate material for the policymaking process in national, regional, or local governments; they don’t replace the process. “We are not a consulting firm that a government reaches out to and says, ‘Can you write our policy on autonomous vehicles or our policy on drones?'” he says. “We are developing frameworks that governments then may use to develop their own regulation.”
In the U.S., for example, significant change in regulation often requires public hearings and evaluation of written comments. Those steps would still have to remain. If done right, the WEF process could bring the public—at least its chosen representatives—into the process even earlier, before there even is a proposal to collect feedback on.
Precisely who represents the public is critical. “They need to make sure they have the right people at the table to translate the innovation,” says Andrew Maynard. “And that’s not just the tech leaders. That’s the communities that represent people who are going to be potentially adversely affected by these technologies, to make sure everybody is working together.”
Public Policy Hackathons
Many governments are enthusiastic about the process, according to Krieger. “Once we formally announced and launched the Center in March , we were bombarded with requests from governments,” he says. “Pretty much every day we had delegations, heads of state, presidents, prime ministers, cabinet ministers coming through the center, and people were desperate to partner with us.”
The draw—or at least the sales pitch—is not only to work with the top minds in tech, but to work like them. That means a casual, informal environment, with little hierarchy and lots of ideas flying around. That was the scene at the center’s first big brainstorming workshop on November 30, between the new staff and dozens of business members, to narrow down a list on projects to pursue in each technology area. “It was a really cool way to source ideas from people,” says Chris McCoy, founder of blockchain startup StoreCoin.
Blockchain likely conjures images of sketchy cryptocurrencies like Bitcoin and Ethereum. But the decentralized, nearly unhackable ledger system can securely record all kinds of transactions beyond purchases. Proponents advocate uses like recording the terms of business contracts or the chain of people who handle evidence in criminal investigations.
At the brainstorm meeting, McCoy predicted that blockchain would become the mechanism for autonomous delivery trucks and drones to negotiate traffic. The robot carrying a very time-sensitive shipment could offer another delivery bot a tiny payment in exchange for letting it cut ahead. The transaction could be recorded in a blockchain ledger.
It’s a speculative scenario at the intersection of three nascent technologies—the kind of future thinking the center encourages for anticipating where technology might go. Krieger says that’s far from how governments currently work: Instead of anticipating, they react after the fact. The role for government and businesses, he says, should be “shaping the trajectory of technology,” a phrase Krieger drops so often in our talks that it has the ring of a mantra.
“One of our core philosophies is that technology does not just happen,” says Krieger. “Nothing is a given in the fourth industrial revolution. It’s not that tech is going to kill jobs, it’s not that tech is going to cure cancer. Decisions need to be made.”