A question of privacy

Lee Jong-wha
The author is a professor of economics at Korea University.

Can the Covid-19 crisis be an opportunity? While the pandemic resulted in a huge number of deaths and economic losses, adapting to the crisis and preparing for the post-pandemic era provides opportunities.

The fast transition to a digital economy is noteworthy. Contactless activities in households and businesses accelerated the development of work-from-home, online education and contactless industries. Global consulting firm McKinsey & Company’s recent study shows that changes in digitization of businesses in the past seven years were attained this year alone. The digital industry is expected to be the driving force to overcome the crisis and grow in the future.

Digital potential is endless. Transition to the digital era allows people to live healthier, work in a new way and enjoy enhanced quality of life in the age of Covid-19. Digital technology allows people to live in a super-connected society even in isolation. Digital platforms provided by Amazon, Google, Apple and Facebook changed the way people around the world work, enjoy themselves and create economic value.

In fact, we have long experienced a “digital revolution” thanks to ICT development. Professor Nicholas Negroponte of M.I.T. Media Lab predicted the transition from analog to digital in the 1990s. Companies have lowered production cost and enhanced efficiency by accumulating digital assets, including computers, communications devices and software. Now, we spend a lot of time in the digital space provided by the internet and mobile phones. The digital transformation will accelerate through the convergence of advanced technologies such as 5G, artificial intelligence, and the Internet of Things.

But as ICT develops and digital platforms dominate the world, will everyone be happy? The answer is still unclear. First, it is uncertain whether everyone can enjoy the economic benefits of digital transformation. M.I.T. Professor Robert Solow mentioned the “productivity paradox.” While ICT developed, productivity enhancement in the economy was not significant due to various obstacles. Small companies have a hard time adopting new technology and workers struggle to learn new systems.

Large corporations monopolizing digital platforms hinder new innovative companies from entering the industry and restrict competition. Technological innovation is also “creative destruction.” New technologies and industries make old technologies and industries obsolete.

How much you can trust the government and large corporations collecting and managing digital information is also an important issue. The government is likely to monitor people and excessively regulate personal behaviors using digital technologies. In a Financial Times op-ed, Professor Yuval Harari of the Hebrew University warned about the emergence of “Big Brother” as the Chinese government closely monitors individuals through smartphones and face-recognition cameras with a justification to prevent infectious diseases. Prof. Harari claimed that a balance between public health and privacy protection should be pursued based on trust in public authority and people’s cooperation rather than China’s totalitarian approach.

But some argue that East Asian countries are becoming “Chine-lite.” As they are educated and accustomed to centralized power, they cooperate with the government’s excessive control. There are criticisms that countries take advantage of this tendency in order to excessively monitor privacy and violate basic rights to prevent the virus from spreading. Korea has become a society where mobile phones trace citizens’ movement.

How industry giants dominating digital platforms use personal information is also worrisome. Korea is especially vulnerable in privacy protection. Privacy infringement and cybercrime leaks through personal information occur.

For digital innovation to bring benefits to the economy and make everyone happy, the gaps on information access and use between companies and individuals should be narrowed. Small-and mid-sized companies should be supported to benefit from new technologies, workers should be given expanded vocational training and schools need to offer enhanced education.

Digital platforms should be regulated properly to promote competition without impeding technological innovation. In the digital world, we need checks and balances to prevent power abuse. Protection of personal information and basic rights should be reinforced. To return to normalcy after the pandemic, we should watch and supervise digital power.

Translation by the Korea JoongAng Daily.