Digital Disruption: Ethical Concerns for Innovative Businesses

Innovative Business,

Visionary leaders, like those who make up Fast Company Executive Board, are forever pushing the envelope of what’s possible, looking to technology and innovation to create a better, faster, more efficient world. Digital disruption — the use of new and emerging technologies to fundamentally change how things work — is part of their bread and butter.

But as digital disruption reshapes traditional industries, ethical concerns arise.

While new tech often creates efficiency and innovation, it also raises ethical issues; specifically, in privacy and security, automation, economic inequality, and bias. In this article, we will consider the impact of digital disruption and discuss what visionary leaders can do to take responsibility for the impact their innovations have.

Privacy and Security Concerns of Digital Disruption

Digital tech collects and processes vast amounts of personal data. While this enables companies to personalize their products and services, it also raises concerns about privacy.

  • Consumers may not know how their data is being collected and used, and may not have control over how it is shared or sold to third parties. Identity theft, exposure of sensitive information, and [similar problems/catastrophes can occur].
  • The use of AI in high-stakes fields like healthcare or criminal justice raises questions about accountability and transparency.
  • Cyberattacks and data breaches create financial losses, reputational damage, and even physical harm.

One of the most well-known examples of a privacy breach, the Cambridge Analytica scandal of 2018, revealed that the political consulting firm had obtained data on millions of Facebook users without their consent, and used the data to influence political campaigns. Facebook had failed to keep user information secure, and faced major repercussions, including increased regulation.

What leaders can do: Tech developers must be clear about how they collect and use personal data. They should provide clear explanations of their data policies and allow users to control what is and isn’t shared. Companies must watch for any harm that their products or services may cause, and put processes in place to address issues.

Job Displacement Created by Digital Disruption

As new tech allows innovative businesses to automate more tasks, some workers lose their jobs. Research indicates that about half of human tasks could potentially be replaced by technology. If people lack the skills or resources to adapt, and they are no longer needed for their existing roles, they face unemployment.

Businesses are, of course, excited about the possibilities of increased efficiency and reduced costs, but individuals still need to make a living.

What leaders can do: Organizations must support policies and initiatives that support workers and address the potential negative effects of automation. Businesses can offer training and upskilling opportunities to their teams, allowing them to adapt to and integrate new technology into their positions for heightened output and results.

Economic Inequality Exacerbated by Digital Disruption

Tech innovations may exacerbate existing economic inequality by allowing already-wealthy companies who can afford to invest in the newest and best products to outrun small players. This limits competition, concentrating wealth and power in the hands of a few. In the same way, underserved communities have limited access to resources, while wealthy ones can access and implement more.

For example, in 2020, the IMF (International Monetary Fund), which serves over 190 countries, pointed out that unequal access to the internet drives inequality between and within countries.

What leaders can do: Businesses working on the cutting edge must support efforts to address social issues like economic inequality. Working with policymakers and stakeholders like community groups can help them understand and address concerns.

Bias Perpetuated by Digital Disruption

As AI and machine learning programs are trained, their creators must take special care to ensure that data is unbiased. After all, if the training data is biased, an AI algorithm will perpetuate that bias unknowingly.

For example, in 2018, Amazon’s machine-learning specialists discovered that their AI-powered hiring tool was biased against women. Because the AI was trained on resumes which were predominantly from men, the system penalized resumes that contained words or phrases more commonly used by women. Amazon had to scrap the tool.

What leaders can do: To mitigate the impact of biased algorithms and avoid unintended discrimination, developers should take steps to ensure that their training data is unbiased. Companies must consider the potential impact of their products and services on marginalized groups, and work to mitigate any potential harms.

Lead Through Disruption

As emerging technologies transform the world, people and businesses see the exciting opportunities, but also the problematic side effects, of digital disruption. 

Problems in privacy and security, job displacement, economic inequality, and bias have already arisen, and will continue to do so unless forward-thinking companies take steps to support workers, address economic inequality, and prioritize the security and transparency of user data.

Leading through disruption means prioritizing ethics in the digital age, and working together to build a future that is both innovative and ethical.

To meet more forward-thinking, innovative leaders like you, check out Fast Company Executive Board’s vetted community. If you’re an innovative industry leader, find out if you qualify today.