Tech Titans

STRATEGIC FORESIGHT FOR SUCCESSFUL NET-ZERO TRANSITIONS

Tech Titans Private companies become paramount POSSIBLE 2030-2050 DISRUPTION A small number of global technology companies function as one-stop shops for every aspect of life, from socialising to health monitoring, learning to consuming. Their scale generates significant data, giving them an edge in innovation and economic power. Through their constant analysis of public preferences, they have taken a more active role in global governance providing critical infrastructure in services such as education and security provision.

Governments are no longer able to step in to prevent mergers and acquisitions, leaving few barriers to consolidation and vertical integration. Incredible amounts of power over most sectors in society is concentrated in the hands of a small number of executives within these companies.

CONTEXT

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Many major industries in the Western world have been undergoing increased concentration.

A small number of tech firms, and in some cases individual founders, have gained considerable influence as driving forces of digitalization globally and have experienced tremendous growth.

It is unclear whether these companies will continue to grow, plateau or be replaced. There are current efforts to rein in the power of big tech from legislators in many countries. At the same time, these companies are well positioned to attract top talent and leverage both extensive consumer data as well as network effects in order to increase their market dominance.

Source: Economist This series is part of the Strategic Foresight for Successful Net-Zero Transitions toolkit which assists governments and organisations to develop forward-looking, adaptive and future-ready strategies for net-zero emission transitions.

Each part of the series showcases one “Possible Disruption” during the 2030-2050 period that could generate new opportunities or challenges for public policy. Each disruption was developed with foresight, academic and policy experts and represents a plausible extreme in a rapidly changing and uncertain future.

SIGNAL Tech giants have signed multibillion dollar contracts with militaries to provide cloud services and emerging tech to security structures.

SIGNAL Companies have appointed former political leaders to senior roles, employed lobbyists in the United States and Europe and named representatives to work with the United Nations.

SIGNAL Tech companies have announced plans to disrupt services such as education and cloud services are now critical infrastructure.

POTENTIAL IMPLICATIONS As select firms come to dominate most sectors, corporate memberships and fees may effectively act as a tax on consumers. Public taxes could subsequently be lowered and regulations dialed back.

This could lead to accelerated innovation in certain net-zero relevant sectors where there are financial gains to be made such as transport, green energy and food production. There could also be neglect in areas with little financial return on investment, and safety standards may not be guaranteed. Vertical integration could limit interoperability and lead to users being locked into a single digital ecosystem and hinder innovation.

Companies’ terms of service and policies could become more important than national laws in many sectors. The best talent, not only in technical roles but also in terms of policymaking, could increasingly decide to work for big tech as opposed to governments because these roles are both the best paid and the most impactful. Big tech’s in-house think tanks could surpass top universities in terms of thought leadership in most fields.

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The most important decisions in the world are made by corporate boards and a few powerful CEOs. Causes that one or a few of the highly powerful believe in may see breakthrough progress, while others that are not economically viable nor personally appealing to multi-billionaires are neglected. Successful net-zero transitions require convincing the majority of the most powerful corporate leaders to care about the cause and coordinate efforts in order to meet emissions targets.

QUESTIONS FOR POLICYMAKERS •

How can the public sector develop and maintain the necessary expertise and understanding of complex technological ecosystems to provide sufficient oversight?

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How can governments ensure that companies terms of service are in line with societal values and responsive to democratic needs?

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How can you leverage multinational user bases of technological platforms to promote climate action?

POLICY RESPONSES FinTech is rapidly changing the way financial markets operate. Poorly designed regulation can lead to a misuse of data, increased risk-taking by investors, lack of security, and inadequate disclosure. Regulators face a pacing problem and can hider innovation with outdated regulatory mechanisms. The United Kingdom Financial Conduct Authority pionee red regulatory sandboxes , which have since spread to other OECD countries.

Sandboxes allow FinTech innovators to conduct live experiments in a controlled environment with a regulators supervisions. They have facilitate bringing innovation to market while also building the appropriate consumer protection safeguards.

STRATEGIC FORESIGHT FOR SUCCESSFUL NET-ZERO TRANSITIONS www.oecd.org/strategic-foresight | foresight@oecd.org