Internet’s Impact Spurs Worldwide Social Changes

Governments in the Middle East offer some of the most advanced online services in the world for their citizens. But they underestimated the impact of social media until the Arab Spring occurred, says Insead professor of business and technology Soumitra Dutta. The author of two recent global reports on technology and the Internet, Dutta tells Arabic Knowledge@Wharton that the region’s unrest is partly the result of a mismatch between how governments viewed emerging technologies, and how their citizens adopted them.

Dutta is the Roland Berger Chaired Professor of Business and Technology at Insead, and the founder and academic director of elab, Insead’s center of excellence in teaching and research in the digital economy.

An edited transcript of the conversation follows.

Arabic Knowledge@Wharton: Your work discusses the rise of a global Internet culture. Did the Arab Spring and the way it was promulgated — through social media — herald a protest culture within the emerging global Internet culture?

Soumitra Dutta: If you look at the global technology reports, we have been monitoring global technology deployments, and in the last five to seven years, the region in the world that has made the most dramatic increases in terms of technology deployment has been the Middle East. So for a number reasons, part economic, part social, and part governmental, the region as a whole has invested more in technology in the last few years, compared to the rest of the world. What has happened is they are among the most connected today. If you look at the penetration of social media in Egypt and Tunisia, it is extremely high. Even if you leave the traditional social media networks, and consider other kinds of communication exchanges, such as BlackBerry messenger, or SMS exchanges, the fact is citizens and governments in this region have aggressively adopted technology. Partly because it was to diversify the economy, partly because people in the region are keen to adopt technologies. If you consider that, it is not a surprise that there has been some friction between the empowerment of citizens, and some of the constraints that they have faced in their own national contexts. If you look at the basic principles of this global Internet culture, fundamentally it’s global, it’s open, it’s transparent, it’s interactive and it’s real time. If you try to apply these dimensions to some of the environments that citizens found themselves in these countries, obviously there was a mismatch. That mismatch lies at the heart of a lot of these spontaneous demonstrations and outbursts to what has happened in the Middle East in general.

Arabic Knowledge@Wharton: One thing that has emerged in the Arab Spring is that traditionally in the region, the state controlled much of the media. People have turned to the Internet to counterbalance or thwart much of that control.

Dutta: Yes, but the state in many countries has also been an active adopter of Internet technologies. It’s not that the people have adopted technology and the state hasn’t done so. You find many of the most advanced e-government applications in Middle East countries. What has happened is the governments haven’t yet realized that it is not just technology; there is a change in values and behaviors. It has happened among the citizens faster than it has among the governments and the ruling elite. I think that’s where the mismatch has happened.

Arabic Knowledge@Wharton: Was it a case of Middle East governments viewing Internet technologies as a tool for business and efficiency, while their citizens saw it as a tool for greater social mobility and expression?

Dutta: I don’t think it’s a case of either or. Citizens are using it for social and business purposes. Governments pushed the Internet for business purposes, but failed to understand the magnitude of its social implications. The assumption was that social implications would be managed within the orchestrated principles they had applied in the past. They underestimated the social impact and implications of technology.

Arabic Knowledge@Wharton: A previous study showed growth of social media use in the Middle East with the start of the Arab Spring. You’ve discussed the social aspect — but did technology become so prevalent here because it offers freer political expression also?

Dutta: Technology has empowered individual citizens, and of course this pushes against various constraints, whether it is political constraints, or gender constraints. The same thing is happening in the rest of the world, by the way, the Middle East is not unique in this. So what this calls for is not a retreat from technology, but a more enlightened approach to understanding how technology interweaves with social values and norms. Eventually, social norms are going to be influenced and changed by widespread use of technology, but that’s the way society largely develops.

Arabic Knowledge@Wharton: So how would you characterize the response by authorities to what’s happening in the Middle East? The United Arab Emirates (UAE) has the most connected population in the region, largely with high speed Internet. But authorities there are now policing social media sites for comments deemed rebellious or inflammatory.

Dutta: It’s a natural reaction of governments all over the world to try to keep control. And they exhibit control in different forms: In the Middle East, they do it in one form, but even in the U.K. for example, during its recent riots, Prime Minister David Cameron suggested they shut off social media sites. This gut instinct to retain status quo is among governments around the world. The challenge is to shift the mindset from one of control, to one of sharing control. All these vehicles, such as Facebook, of course you can treat them as ways in which people are getting together to plan not very good things, or you can see them as media people use to plan very good things. Technology is fundamentally neutral; the question is how society uses it. In the case of Facebook and people using it to come together, the government could take a different response: Engage with groups and gather positive energy to deal with societal issues that matter to us. The key is that government has to be willing to give up control and share control on some issues, because if you’re not willing to change your position, then basically you’re not an eager participant in the discussion. This notion of sharing control and building trust is important in government-citizen relationships, especially in an environment where citizens are much more connected.

Arabic Knowledge@Wharton: Despite the effort to become more connected with citizens, it seems some governments are ruing the rapid acceptance of social media in their societies before they had the chance to figure out how to better control it.

Dutta: Governments and regulations in general are falling behind the pace of change in technology. We’ve reached a point where the ability of citizens to adopt technology faster than governments can control it. This is a basic governance problem that faces society at large. I don’t think the solution here is stopping things, because I don’t think any government today has the capacity to stop things. The Internet is a global platform, and unless the government wants to take a draconian measure such as cutting off access to the Internet, like Egypt did. If you are connected to the global community, people will adopt the global tools and global applications. You are part of the global community, and so you are subject to the same pressures and changes that are happening in many other parts of the world too.

Arabic Knowledge@Wharton: Do you see a common approach forming in the Middle East that will better develop talent, and help governments better interact with their citizens?

Dutta: Creating jobs is going to be a major priority for governments, and they will have to look at how technology can create jobs. Typically by enabling new kinds of technologies in a variety of fields, whether in education or health, or any number of disciplines. Technology today is ubiquitous, it affects everything. Governments in the region will have to adopt common or similar policies to stimulate job creation and growth that leverages technologies effectively. Then there is the social aspect of technology. What kind of culture and values does the government want to encourage. Once again, the government will have to build policy, but adapt it to its own country context. Technology will have to be guided towards strengthening the local culture rather than making it weaker. Technology will probably require governments to be more open and transparent with citizens in their communications. And it will probably require them to move towards the global values that we talked about — global, open, real-time and interactive.

Arabic Knowledge@Wharton: Investment in technology is capital intensive, though. How do you address the disparities? How does a poor country like Yemen take such measures?

Dutta: We’re not talking about every government being at the leading edge of every sphere. If you want to build advanced e-health, e-government services, there has to be a basic infrastructure in place. There is the important question in all countries today, even rich countries, about how do you have and fund effective broadband infrastructure, because that does require significant investment. Leaving that aside, the rest of the infrastructure relatively does not require a lot. A lot of applications can be created quite easily. Really, the biggest investment is in people, in human minds.

Governments will have to find ways to combine the investment of infrastructure, with investments in human capital, and the regulatory changes that enable all this to function smoothly. An ecosystem for a modern innovation community is something of vital importance, and governments will obviously have to lead and facilitate this.

Private industry’s role is important because they often provide the vehicles for innovation. What is private and what is public often varies in the Middle East, as many so-called private players have strong government ownership. So the private-public space will have to come together to build this innovation community. Government’s role is to ensure the architecture, the enabling condition, is set up correctly. The private industry’s role is innovating and acting in this fertile environment.

Arabic Knowledge@Wharton: When it comes to preparing people to join the emerging Internet community, what policies and action should be considered, especially in countries with limited resources?

Dutta: Investment in education is the most important thing. Secondly, reducing the cost of access, such as increasing competition and subsidizing the costs of devices. If you’re able to combine access and skills, you get to the enabling condition, and then you have to make sure the right content is available to people. In the Arab world, the digital content side is very weak.

The content question is important, because as the Arab Human Development Report indicated, the region has generally not being a leader in producing native content. The problem becomes acute when people go online and want to access relevant local content. There needs to be more effort at orchestrating production of local digital content. The role of the private sector should be to create more content and leverage more content. For example the creation of Al Jazeera in Qatar was a government-led initiative to create high level content for television. Or the setting up of The National newspaper in Abu Dhabi, another government initiative to stimulate high quality content creation, though it is in English, not Arabic. The private sector’s role is a little more complicated because of the financial state of the global media. The whole revenue model for modern media and the Internet is being called into question.

Ultimately what will happen is if your credibility isn’t high enough, people will look at other sources. Maybe there aren’t many today, but eventually there might be others. Given the high level of transparency today, it’s very difficult to keep hiding behind control for too long. And that’s what recent events have shown.

Arabic Knowledge@Wharton: In the emerging Internet culture, why is so much weight given to freedom of expression? And how is that negotiated when it runs up against established norms in some parts of the world?

Dutta: Freedom of expression goes back to the notion of openness and transparency, which are at the core of the culture. People want to speak their mind. To go back to this global interaction, in order to participate and to be understood you have to communicate freely.

Freedom of expression has long been associated with the political structures and the democratic processes of a country, but today, with the Internet and widespread access to technology, democracy has come to every citizen, even if the government doesn’t allow it.

Arabic Knowledge@Wharton: In your study, there is a global measure of opinion on the statement: ‘Access to Internet should be a fundamental right for all people.’ One notices among the countries, China had a strong representation of people favoring the statement. How did the perception of using the Internet go from a leisure activity to a fundamental right?

Dutta: It’s become a way of self-realization for some people to develop their skills, to show others what are their strengths, and help them become better people, if I could use that phrase. So the shift for the Internet from a technology tool to a social tool happened only in the last 10 years. It’s about time that a technology that has spread so much becomes ingrained in the social norms and cultures of individuals.

There are two or three interesting findings in this study, and one is that there is greater support for that statement in India and China than in Western countries. Maybe the set of users in these countries, the early adopters, are more open in their views. Maybe because these countries don’t have other equally well-developed channels for expression, so technology is the newest and the best way to do so. The other interesting finding is that people in these countries are more active in creating content and are open to experimenting on the Internet than people in more developed economies. That’s something that may impact the pace of innovation going forward.

It might be a question of alternate choices, or a fascination with being on the leading edge. Many of these societies were behind, and now they’re trying to catch up, or leapfrog in a sense. It’s a question of increased openness to adopting these technologies, and behaviors that don’t have other channels for expression.

Arabic Knowledge@Wharton: We’ve discussed government initiatives to connect with citizens. How then do business developing an online presence in developing countries create the trust and familiarity for customers to do business online?

Dutta: If you have good regulations to protect customers against fraud, that helps. If businesses have programs that incentivize things online, that helps. In the UAE, there was a successful startup called Tejari.com that incentivized businesses to do business online with the government. Of course, education and access is important. Without either you can’t expect people to go online.

For companies to do business online, they have to change their mindset. They have to change the fundamental way in which they have operated. It’s not easy even for global companies. To acquire an online mindset requires a massive change, from operational processes to warehousing capabilities. Almost 15 years after Amazon started, none of the major players have a customized storefront online the way Amazon does it. Why not? Because of the resistance inside companies, the cost of change is so high, and the current model is successful enough that the pain is not there. The question is what will force them to change? So very few companies are proactive enough to change before the crisis occurs.

Arabic Knowledge@Wharton: So how will this shift in mindset, whether in businesses or government, be resolved?

Dutta: There’s no easy solution. Sometimes the mindset shift will have to be forced, like the revolutions in Egypt. Sometimes its competition – maybe in the private sector a player will emerge with such a successful online model that competitors will have to react. Sometimes, it will be innovators who will emerge from these markets. So there is no one solution or formula that works in all these markets.

The incremental changes are already happening in society among the younger generation. They’re going to be the trigger. This generation is both customers and employees. As customers they’ll force governments and businesses to do things differently, and as employees they’ll create the pressure for change inside these organizations, whether in the public or private sectors.

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