digital economy

Can we trust the digital economy?

The year 2020 marked a tipping point for digital evolution. Such was our reliance on digital, the Oxford Languages “Word of the Year” – which often centers around tech trends – claimed that there was no singular phrase that could sum up the pandemic. 

As more of us worked from home, ordered online, and hopped onto Zoom to see our families, the world’s biggest tech companies profited. Indeed, the latter company announced profits of $129 billion. 

A matter of trust

But for all its merits, this new online movement posed an important issue: the issue of digital trust. According to The Fletcher School’s Digital Intelligence Index, customers are driven by these four digital trust factors: 

  • Attitudes 
  • Behavior 
  • Digital environment 
  • Digital user experience. 

Each of these has some bearing on perhaps the biggest concerns for modern day internet use. For example, fake news continues to dominate the conversation, moving beyond political trends and instead into bogus coronavirus theories. 

The 2020 Digital News Report tells us that just 26 percent of users trust social media as a source, despite 43 percent of us using these platforms to access news on a daily basis. 

Another concern is data privacy. Hot on the heels of numerous data scandals from certain platforms, Zoom has also posed its own privacy concerns. In particular, the video conferencing platform was criticized for sending user data to Facebook and making false claims about end-to-end encryption.  

Chief Executive Eric Yuan said of the concerns: “We did not design the product with the foresight that, in a matter of weeks, every person in the world would suddenly be working, studying, and socializing from home.” 

These concerns touch on the four drivers listed above, for example: 

Attitudes 

Customers’ attitudes toward this digital evolution comprise their thoughts toward tech companies and software in general, while they also govern their behavior. Those who have read about data scandals might consider switching to alternative videoconferencing platforms, for example. 

Behavior 

This trust factor measures how engaged users are in the digital environment, for example, how often they shop online, use social media, or rely on internet-powered devices. With many interactions now switching to digital, users may feel they have no choice but to use these platforms, regardless of their thoughts on them – such as homeschooling parents. 

Digital environment

Users need to know that the companies providing them with digital tools are held accountable for what they do. This could be anything from data privacy with third party Facebook apps to safe online transactions. As digital literacy breeds, we are becoming more mindful of checking privacy policies and security settings. 

Digital experience 

This concerns the trade-off between the assurance of data security and a seamless user experience. Users who have to go through multiple layers of passwords and encryption may become frustrated by this ‘friction’ – leading to lower ecommerce sales, or less interaction with apps. What is key for technology companies is to strike the balance, using password keys or fingerprint access, for instance. 

The broader digital economy 

We must also think of digital trust on a macro scale. The Digital Index talks about individual economies and their position within the global digital evolution movement. The Fletcher School names four broad categories: 

  • Stand Outs: highly digitally advanced economies with a faster pace of change.
  • Stall Outs: highly digitally advanced economies with a slower pace of change. 
  • Break Outs: poorly digitally advanced economies with a faster pace of change. 
  • Watch Outs: poorly digitally advanced economies with a slower pace of change. 

Among these, The Fletcher School points to ‘digital entrepôts’ such as Singapore, which may be considered Break Out economies – for example, Singapore is named a fintech hub for Asia. This puts the emphasis on Stand Outs such as Western countries to integrate with them, which could bolster the digital economy long-term, but may pose even stronger trust issues. 

The future 

The pandemic has served not to change the world, but to accelerate the pace of what was already an emerging change. What is important for us as corporations and consumers is to promote a culture of digital literacy. We need to enforce regulatory processes to ensure that digital does not advance faster than ethics and legal concerns can handle. 

We are on the cusp of a 5G future and a shift toward remote working. While these will serve to bridge the gaps between geography and time zones, we must look at the bigger picture. Corporations will trade globally and will be subject to their own regulations, which must protect all users. For a sustainable digital future, we need to foster trust with security and accountability.