Dept. of Commerce Creates Board of Inevitability

Yesterday, Commerce Secretary Penny Pritzker announced the official launch of the Digital Economy Board of Advisors, presenting seventeen volunteer professionals described in a press release as a “diverse group.”  And while it’s true that this diversity does represent the full spectrum from tech industry power players (YouTube & ATT) to tech industry startups (Lyft & Handy), Secretary Pritzker did not see fit to make room at the table for even one individual representing the core copyright industries.  It’s an unfortunate omission, not only for the more than five million people who work in the creative sectors, but for the country as a whole. After all, it is the creative workers who have leading-edge experience with some of the pitfalls of the so-called digital economy, so maybe there’s something to be learned by having one or two representative voices in the room.

Granted the digital revolution is already reaching beyond the Internet of Content into the Internet of Things, but Content is still the reason the Web grew the way it did, and Content is still one of this country’s biggest employers and biggest exports.  The number-one user of bandwidth worldwide is Netflix, and each of those programs we so easily stream and binge-watch represents hundreds of jobs—jobs that are threatened by another big user of bandwidth as an estimated 24% of all Internet traffic is directed at criminal sites hosting infringed movies, TV, books, video games, etc.

When technologist Jaron Lanier described the creative industries as the “canary in the coal mine” of the digital economy, it was among the more prophetic statements most people ignored.  Former Secretary of Labor Robert Reich has alluded to the possibility of “uncertain work” for most people within a decade.  We read accounts of college-educated millennials trying to navigate the instability of what we now call the “gig economy”, which directly affects marriage and birth rates, which directly affects housing and quite a few other major sectors.  So, it is dismaying to note that Secretary Pritzker seems to have filled her board with several digital economy cheerleaders but almost no representatives from industries that employ large numbers of people who are being told to “adapt” to the new economy, which in some cases is outright stealing from the “old” economy.

I know YouTube is very sparkly, but the platform with a billion viewers and about $4 billion in revenue is still not profitable, employs fewer than a thousand workers, and is exclusively a vehicle for advertising, the value of which can only decrease in an economy that doesn’t grow sustainable jobs where consumers can afford competitive choices.  It is disconcerting to think that the Commerce Secretary may not consider the cannibalistic nature of the digital economy if she is uninterested in hearing from some of those who are being eaten.  As many expert observers have noted, the technological transformation this time is not necessarily a case of creative destruction so much as it may be one of destructive destruction.  Certainly, this continues to be true for the core copyright industries.  As noted in a recent post, when Google directs users to an illegal platform for watching a movie, that’s not commerce; it’s the opposite of commerce.

Historically, democrats are pro union, pro labor, pro civil rights. As such, the Obama administration should take note of the way in which the major Silicon Valley companies have been antagonistic toward intellectual property rights as there is a direct philosophical line from disregarding one individual’s copyright (or patent) to disregarding millions of individuals’ labor rights. But I fear the Obama administration, of which I approve in many ways, has drunk a bit too much Silicon Kool-Aid.  From the number of former Google execs working in the administration to the appointment of Eric Schmidt as head of a new DoD advisory board, and now the composition of this board at Commerce, it’s hard not to feel a sense of inevitability—that one industry’s world view is quickly becoming national policy.  Not only is that no more desirable than excessive influence from oil or banking or any other traditional industry, but the Silicon Valley crowd—although they do have some cool and audacious ideas—is also amok with zealots and egomaniacs who’ve made personal billions on businesses that are neither profitable nor job-creating.  To the contrary, many of them are job-destroying, which leads to the question as to whether or not the digital economy is an economy at all.  Surely, the fact that digital technology will have a profound effect on commerce is inevitable, but how we choose to manage it should not be.

© 2016, David Newhoff. All rights reserved.

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