Tech At Core, Rotten At Heart

I recently came across an interesting interview on Irish website with Rebecca Parsons, chief technology officer at global software consultancy ThoughtWorks

In the course of the interview, she argued more and more businesses were becoming technology companies first and foremost. “You’re not an insurance company any more, you’re a tech company that happens to sell insurance,” Parsons claimed. “Look at some of the most powerful technology companies in the world today – many of them (Uber, Amazon etc.) are actually in the transport or retail sectors.”

She labelled companies that used technology to enable their business as ‘tech at core’, explaining this meant technology was “no longer just a department within their organisation, it is at the very core of their business.” According to Parsons, more companies will adopt the ‘tech at core’ approach in the coming months and years.

I must admit to being not entirely convinced by the ‘tech at core’ label. I agree that the companies Parsons cites as examples of this new business approach have adopted a technology-enabled business model more effectively than traditional companies in their sectors, but I think that’s only half the story.

They have also benefited handsomely from other practices, such as their ability to avoid tax and the alleged exploitation of the people who work for them. I use the term “work for them” advisedly because in some instances whether the people doing the work are directly employed or not is a matter of some contention (and tax liability). Indeed, Uber is presently in the final throes of an appeal to the UK Supreme Court arguing that drivers are self-employed and not entitled to the national minimum wage, holiday pay and paid rest breaks. France has already ruled against Uber by finding drivers are not self-employed, as has California’s state senate.

In addition to "employing" workers on the most precarious of terms, these companies are also widely perceived to make them work in oppressive environments. The book Hired, written by James Bloodworth, provides firsthand evidence of some of the conditions experienced by people working for companies like Amazon and Uber. You can find a review by Nick Cohen here

For perspective, take a look at some of the stories involving Amazon and workers just from this year. In April, the company shut down its warehouses in France because a court said it had to stop selling non-essential goods while it carried out a risk assessment on how to protect employees from coronavirus In March, Amazon fired an employee who led a protest against its coronavirus measures in New York City Earlier this year, it threatened to fire employees who criticised the company’s climate practices And it is currently being investigated by the California Attorney General over its treatment of workers during the pandemic Amazon has also refused to provide information about the total number of confirmed coronavirus cases at its warehouses, despite its reputation for monitoring and tracking workers very closely

So while Amazon has 'tech at core', its success is also centred on a number of old-fashioned, long established and possibly rapacious business practices, including exploitation of workers, manipulation of tax regimes and alleged anti-competitive behaviour. On the issue of taxes, it’s worth noting that Amazon paid no federal income taxes in the US in 2017 or 2018 However, it did pay some taxes in 2019 on profits of $30.1 billion – – even if it was at the derisory rate of 1.2%.

The US congressional antitrust hearing in July heard claims Amazon had used its dominant position to undercut a leading provider of baby's diapers to weaken the company before acquiring it. In addition, Amazon was accused of using third party data to help guide decisions over its own product development. Facebook came under fire over its behaviour towards Instagram before it bought the company. Apple and Google also faced heavy scrutiny. At the end of the hearing, chair of the subcommittee, Rep. David Cecilline stated: "These companies that exist today have monopoly power. Some need to be broken up, all need to be properly regulated."

I have no argument against companies adopting the ‘tech at core’ approach but I would like to think:

  • They don’t do so at the expense of the common human values that ensure they treat employees with decency and provide them with good working conditions;
  • They pay staff a liveable wage;
  • They contribute their fair share of tax to maintain the society that provides the infrastructure, people and resources for their businesses to operate;
  • They don't engage in anti-competitive behaviour or monopolistic abuses;
  • They take their climate responsibilities seriously.

The harsh reality is that companies can put technology at the core of their business to make them more efficient or agile but if the heart, ethos or culture is rotten, technology can’t do anything to fix that.