From companies claiming to have created the next great thing to rumors about the latest smartphones, myths about technology are constantly changing. These myths often permeate social discourse, making it difficult to separate fact from fiction.
To sort out these common misconceptions, I spoke with Robert Atkinson and David Moschella, authors of Tech Fear and Scapegoating: 40 Myths About Privacy, Work, AI, and Today’s Innovation Economy. Robert is president of the Information Technology and Innovation Foundation (ITIF) and has written numerous books on the innovation economy and technology. David is a non-resident senior fellow at ITIF. Prior to joining ITIF, he was a researcher at the Leading Edge Forum, studying the impact of digital technologies on business.
Below is a lightly edited and condensed transcript of our discussion: You can listen to this and other episodes of Explain to Shane at AEI.org and subscribe on your favorite listening platform. If you enjoyed this episode, please leave a review and tell your friends and colleagues to tune in.
Shane Tewes: In the book, you start to discuss how markets will change in the 2020s and 2030s. You suggest that we will see more of a focus on industrial forces, as we saw a little bit with the CHIPS Act. You also focus on the question of whether we need industrial policy. You argue that we need to look beyond just the technology industry to raw materials, minerals, and climate change risks. The digital disruption that you’re talking about represents a major shift in economic focus. So let’s discuss whether we’re at the beginning of this new cycle.
Rob Atkinson: Well, I hope so, but I don’t know if it is. If you look at the pace of technological innovation, it’s incredibly slow. Labor productivity in the United States over the last 15 years or so has been the lowest in the history of the United States, and the same is true for other countries around the world. We need to accelerate this substantially.
What worries me most is the increased energy consumption caused by AI. We spend energy on AI because the net benefits far exceed the energy costs; otherwise we wouldn’t do it. Secondly, we can’t solve climate change by using a little less AI. It’s pointless. We solve climate change through a massive shift to decarbonizing fuels. If someone is concerned about AI’s energy use, I say: “Stop driving your car and stop heating your house.” We use energy to heat our houses in the winter. Should we sleep in a sleeping bag instead? No, that won’t solve the problem.
David Moschella: Historically, the innovations of the first half of the 20th century were mostly about the physical world: electricity, lighting, hot water, appliances, cars, rockets, trains, birth control. These were physical products, and these features are fundamentally more important to most people than email, e-commerce, or information. In some ways, recent innovations are less important than innovations of the more distant past.
But as we look to the future, many of the challenges ahead have to do with the physical world. How do we produce cheaper, cleaner energy? How do we reduce our reliance on China and build more resilient supply chains? How do we develop more sustainable agriculture and more sustainable businesses overall? How do we navigate the transition to electric vehicles and charging networks? All of these challenges are physical in nature.
The relationship of these challenges to traditional big tech companies is unclear. They have their hands in all these areas, but they are not at the forefront in most of them. The interplay between the physical and cyber worlds is a hugely important and ever-changing dynamic.
You also dispute the notion that big tech companies are stifling competition. I’m very concerned about recent steps, particularly from Europe, that seem to seek to slow innovation through fines, such as the Digital Markets Act (DMA). Essentially, the DMA imposes fines on the US if it does certain things. To me, this is a regulatory step in the wrong direction. Are you concerned about the global trend toward increased regulation of all things tech-related?
Rob Atkinson: The people who really need to read this book are Europeans, who don’t even question the European myths. My suggestion, somewhat tongue-in-cheek, is that any fines that European regulators impose on American companies should be remitted to the U.S. Treasury and then paid directly back to the companies.
Shane, to answer your question, this is most certainly motivated by anti-Americanism, jealousy and protectionism. Think about how outrageous it is when Europe pushes this notion of “digital sovereignty.” We protect them through NATO, but NATO wouldn’t really exist without it. It’s audacious that they say they want digital sovereignty over us when they have a trade surplus with the US of over $200 billion and we have a trade surplus with them of only $2 billion in digital services. They have the nerve to talk about digital sovereignty and talk about potentially excluding Microsoft, Google and other American companies. I think it’s outrageous. And I think U.S. government policymakers have been too passive for too long in not opposing this.
Finally, this approach is having a negative impact on their own innovation system. As Terry Burton, head of digital, praised when the AI Act was passed, there is no doubt that the AI Act will have a negative impact on them. There is no doubt that it will slow down AI development.
David Moschella: The original question was, is there a race in technology? To me, there clearly is. Who’s leading the most exciting company right now? NVIDIA, a company that until recently we hardly heard of. Look at what Musk has done with SpaceX or Tesla, or the Chinese EV company BYD, or China’s TikTok.
Historically, as I pointed out in my previous book, Waves of Power, there has always been a dominant player in the computer world, but that dominant player has always been toppled. For example, Intel, once a dominant monopoly, has been overtaken not only by NVIDIA but also by the British company ARM. Intel is now third in the high-end chip market. Meanwhile, TSMC dominates the chip manufacturing world.
There is a lot of wealth flowing directly into China from countries like the UAE and Saudi Arabia. Are you concerned that the AI investment engine is bypassing us?
In my view, no one will dominate AI from a software and data perspective. The only potential bottleneck is hardware — if someone makes better chips or servers, for example. Historically, that’s an area where you can gain advantage. But the basic concepts behind deep learning and machine learning have been around for a long time and aren’t going to change dramatically.
I think there are a lot of people doing interesting things in AI, the US is one of them and will probably be a leader. But the days of control over these technologies are pretty much over. Saudi Arabia’s money is an amazing factor. Think about how much they make from endless oil sales.
Rob Atkinson: A lot of the myths that we discuss in our book are about AI. Those myths don’t exist in China. You don’t see Chinese TV shows or elite AI scientists saying, “You’d better slow this down.” No, no, no, they’re full throttle there.
I’m also worried about data locking. Another misconception we address in the book is that AI is built on data, and that datasets can be automatically re-identified at any time. This is not true.
As David points out, our companies, particularly the big platform and software companies, are investing heavily in this space and doing a great job. But at some point, governments have to follow through and not put up any of these barriers. We need to try to have a more positive view of society, otherwise these companies will have the wind in their sails instead of the tailwind.
Connecting to some of our previous discussions on data, your book argues that the claim that technology is destroying personal privacy is a myth. So how is technology actually enhancing privacy?
David Moschella: This is one of the big misconceptions. It’s very easy to focus on the risks to privacy: tracking methods, location targeting, surveillance of any kind. These risks exist to some degree, but are often largely speculative. But the ways in which technology enhances privacy are so obvious and pervasive that they are rarely mentioned.
Think about it. Who among us has never searched for sensitive information on Google that we would rather not share with our acquaintances? Who among us has never sent a text message to a friend or family member from the office because we don’t want anyone to hear the conversations happening in our family?
Historically, people in small towns across America had little to no privacy. Every action, every transaction, every public appearance was observed. The freedom that the Internet gives people to read, listen to, and learn what they want privately is simply enormous.
After all, Americans very often prefer to Google or WebMD and let these companies learn something about them digitally, rather than asking their friends, family, or doctors. The relative anonymity that technology allows us to do things has infinitely improved our privacy in countless areas. To me, this improvement in privacy is orders of magnitude more important to real people than the threats posed by many of the attention-grabbing speculations.
In your book, you write that the claim “your data is gold” is misleading. Can you explain why personal data is not as valuable as it is portrayed to be? And who actually benefits most from this data collection?
David Moschella: The question of how much data is actually worth is an empirical question. People call it gold and claim they’re being duped. But if you try to understand its value on a consumer-by-consumer basis, here’s what you find:
Let’s look at the profits of the two biggest users of data, Google and Facebook. Let’s say they each give back half of their profits – a ridiculously high percentage, but let’s do the math for this example. If they split that half across the roughly 4 billion people who use their products, that comes out to roughly $4 per customer per year for Google and roughly the same for Facebook. So, by my rough calculations, the average consumer’s data is worth roughly $8 per year.
Considering the service offered for $8, this is one of the best deals imaginable. Consumers are not being scammed, this is actually a fantastic deal. This math is very simple, yet you rarely see it done in practice.
Rob Atkinson: Related to that, there’s this idea that a lot of people, especially in Europe, have come to accept: “You should be able to get it for free, without paying for anything, including your data.” I hate the expression “pay with your data.” Shane, you know how tall I am. Listeners, I’m 6’7. I’ve given away my data, so you have to pay me.
People want to get services for free. In Europe, laws have been passed that allow people to opt out of non-targeted ads if they want to avoid tailored ads on Facebook and similar companies. But these ads have little value because advertisers can’t target specific demographics.
People say, “I’m entitled to this for free.” So who’s going to pay for all this? They have to pay through advertising. This is the status quo unless we move to a completely different model of the internet with monthly subscription fees.
