The Future, This Week 18 May 2018

Disclaimer: We'd like to advise that the following program may contain real news, occasional philosophy, and ideas that may offend some listeners.

Intro: This is The Future, This Week on Sydney Business Insights. I'm Sandra Peter. And I'm Kai Riemer. And every week we get together and look at the news of the week. We discuss technology, the future of business, the weird and the wonderful, and things that change the world. Okay let's start. Let's start.

Kai: Today on The Future, This Week: owls thieves in cashless Sweden, DNA gone public, and this week in tech 20 years ago.

Sandra: I'm Sandra Peter, Director of Sydney Business Insights.

Kai: I'm Kai Riemer, professor at the Business School and leader of the Digital Disruption Research Group.

Sandra: So Kai, what happened in the future this week?

Kai: Our first story is from the Atlantic. It's titled "The owl thieves of Sweden - as the country ditches cash, criminals turn to stealing owls."

Sandra: This is about some of those jobs disappearing in the new economy, it turns out you don't want to be a Swedish bankrobber anymore.

Kai: That profession doesn't seem to have a future as most banks in Sweden no longer actually hold cash, work with cash, take cash or give you cash.

Sandra: Turns out eight years ago there were about 110 bank robberies in Sweden possibly employing quite a few bank robbers. By 2016, but two years ago, only two bank heists in the whole of Sweden. Not much to steal in a cashless economy.

Kai: So the article makes the point that in 1661 Sweden became the first European country to print banknotes and it might today be the first one to completely abandon them.

The country is leading the revolution in money. Moving to a mostly cashless society and has today the lowest rate of ATM withdrawals as a percentage of GDP. A measly 2.5 percent and experts reckon that by 2030 cash will be all but gone.

Sandra: So really quite surprising to us to think that even as early as three years ago cash barely accounted for about 2 percent of the value of all payments made in Sweden which is quite a stark contrast to even a place like Australia where we actually are well advanced in using cards and the digital payments compared to places like the US for instance. But even we have a large percentage of our transactions still in cash.

Kai: A recent article in The Conversation from the 28th of March talks about Australia and raises the point that still 47 percent of all transactions are done in cash. That's numbers from 2013 so arguably a few years ago but things will have changed only slightly since then but they are strong pushes in Australia to also move to a cashless society. The Australian Government being keen on weeding out the so-called black economy which is fueled entirely by cash transactions and estimated to be between 2 and 15 percent of GDP and the range suggests that it is very hard to measure but most people in the country will have experience with tradies making the offer to pay in cash, which usually means without paperwork and without paying tax or GST, which is of course illegal but seems to be widespread.

Sandra: So indeed the new Black Economy Task Force that has just come up with a new report looking at a way to respond to combat the black economy and we'll put the report in the shownotes has actually estimated that the black economy is worth about 50 billion dollars in Australia. That is a lot and turns out Australians actually have a lot of cash. Looking at only hundred dollar bills there are about fourteen hundred dollar bills for each person in Australia. That is still a small number compared to a place like the US where you've got about thirty six hundred dollar bills per individual. But still think it. Fourteen hundred dollar bills how many do you have? How many have you actually seen since you've been to Australia?

Kai: Well interestingly when you get cash from an ATM, the standard would be to get fifty dollar bills or if you break it up smaller bills but you never get a hundred. Interestingly I only get 100 dollar bills when we have visitors from Germany who got their Australian dollars back at a German banks so usually they bring in 100 dollars and if you pay with a 100 dollar bill in a local shop, people will actually be a bit suspicious because no one really uses 100 dollar bills. They are very widespread in the dark economy or in money laundering for example. So they seem to only exist in the world of tourists and criminals and we would think they are distinct groups.

Sandra: This is not to say that your tourist friends are criminals.

Kai: No.

Sandra: So one of the recommendations that the task force has made and that the Australian Government has taken up is to limit cash payments for purchases of goods and services to ten thousand dollars so you'll only be able to pay cash for something that's under ten thousand dollars. This is supposed to help crack down on the black economy on illicit transactions.

Kai: So this seems to be mostly what drives the push for a cashless economy in Australia. In the article in The Conversation makes the point that there are a few things in Australia which stand in the way of a full adoption for example a lot of retailers still limit the use of cashless payments, eftpos card payments, for anything above 10 dollars for example, that's due to the sometimes still high fees that providers charge to local retailers. Another reason is that many of the large Australian banks have resisted so far to adopt widespread cardless cash payment solutions such as Apple Pay instead trying to entice users to adopt their own technologies. So there's still things that stand in the way of adopting cashless payments more widely, not so in Sweden however.

Sandra: Not so Sweden indeed. You can make donations in church without cash. None of the buses will actually take cash, many street vendors will not take cash in Sweden. So it's no wonder that Sweden actually has a very low value of payment that is accounted for cash, that's only 2 percent.

Kai: So let's talk about some of the consequences of going cashless. Obviously there's crime. So the article makes the point that criminals will have to look for other ways to make a living and we want to hark back to another article a couple of years ago in the New Yorker which also talked about cashless Sweden and they led with the description of what has become a famous bank heist known as the Vastberga heist in Sweden, a movie worthy bank heist involving helicopters and road spikes to keep cop cars from swarming the buildings and a later chase of the robbers who were apprehended but their six point five million dollars worth of cash still missing. So on the back of an illustrious history of bank robberies, Sweden has all but weeded out that problem but has created, and so the article reports, a whole new dimension to robbery amounting to, for example, robberies of Swedish postal service PostNord who had some of their trucks being raided while travelling at 50 miles an hour. Robbers lifting Apple products.

Sandra: Or just driving a Volvo construction truck through the front of a Chanel boutique and then emptying the boutique afterwards.

Kai: Or and here we're coming back to the owls, the trade with endangered species such as reptiles or the great grey owl known as The Phantom of the North, each individual cashing in one million kroner which is about 120000 dollars US on the dark web. And that brings us to online crimes. So with moving to a cashless society Sweden has seen a spike in online fraud, cashless crime so to speak.

Sandra: Of course these range from really basic Internet scams that we've had around for years and years and these are just spiking now, like phishing scams where people tried to obtain valuable information like your banking details or your banking password but also newer forms of digital crime - things like crypto jacking where people try to use your computing power to mine virtual currencies. And we've seen examples of this for instance in Argentina even in a Starbucks shop where people would log in to the free Wi-Fi and their computers, their laptops would be used to mine cryptocurrency.

And we've seen this recently in Australia last week when hackers have actually injected hundreds and hundreds of websites in Australia with malicious software to mine the cryptocurrency Monero. So this happens at scale and we've seen sites like the San Diego Zoo being affected or the National Labor Relations Board or even the government of Chihuahua Mexico.

Kai: So interesting, while moving to a cashless society has often been discussed in terms of reducing crime because crime uses cash. The article makes the point that it's no small irony that going cashless might inspire more crime rather than less.

Sandra: But of course you could argue that you could have both.

Kai: Which brings us to another implication with going cashless - an article in the BBC only a month ago titled "The Swedes rebelling against a cashless society". So this article again outlines Sweden's move to go cashless but then makes the point that we have to be careful because any move to change society at such a fast rate will inevitably leave people behind.

So we talk of course about the digital divide whereby people who are not comfortable with using cashless payments or who do not have access to online banking for example will increasingly either have problems going about their daily business or incur quite steep fees to make a bank transfer for example because banks are now starting to charge fees for anything that they have to do in person which you could otherwise do online.

Sandra: And clearly for a country like Sweden such fees are actually really really high because for a very small amount of transaction, that is two percent that is cash, you still need to maintain the entire infrastructure that allows for cash payment and that includes having ATMs and servicing those ATMs, handling cash, having all the vans and all the infrastructure around that.

Kai: So that puts the government into a bit of a pickle of course because on the one hand you want to get rid of this cost because maintaining the cash system for an ever shrinking number of transactions at some point is just not worth it. On the other hand you do not want to leave behind parts of society who cannot cope with a full move to cashless so what do you do?

Sandra: We have actually seen two approaches to this and one of them has been out of India where India quite brutally tried to take a step away from traditional cash transactions and have people embrace digital transaction where the government has withdrawn high denomination banknotes from circulation. They did this over a period of about a year and actually India's Prime Minister managed to create dozens of cashless towns where great pain is taken to discourage any bank notes or any coin transactions. So India is one of those countries that actually has a government ministry dedicated to implementing and to moving India forward to embrace digital transactions. And this is quite an undertaking in a country where you have almost 300 million people below the poverty line. So a cashless future actually weighs heavily on the opportunities for financial inclusion of these people living below the poverty line. A different route to a cashless society is actually what we're seeing out of China where payments not through credit cards but through private platforms such as WeChat and using QR codes that are actually very widespread throughout the economy.

The share of people in China making these mobile payments is about 68 per cent whereas in a country like the US it would be about 15 percent mostly because the US is still beholden to old credit card systems rather than new types of mobile payments such as we're seeing in China. And in China this is indeed very widespread, you can use WeChat to pay at the high end designer store or you can use it at Starbucks or you can use it at markets on the street or even to donate money to beggars or buskers in the street.

Kai: Meanwhile back in Sweden it is mostly the elderly who seem to be left behind at the moment because the country does have one of the highest adoption rates of online banking in the world with 85 percent of Swedes between 16 and 74 year olds are banking online. That is compared to only 51 percent in the EU or 68 percent in the UK. But it is still a problem that the government has to grapple with and proposals to train the population in adopting online banking only seemed to go so far that experts have suggested that the phasing out of cash will probably take until about 2030 to be fully completed. And that also comes in the face of recent worries about online fraud, online theft, privacy in the wake of the Cambridge Analytica scandal mentioned in the BBC article which has led to new numbers of about 74 percent of all Swedes saying that yes they do like cashless payments but they would rather retain an option to pay with cash regardless.

Sandra: So this seems to hinge on the notion that trust is changing. Whilst in Sweden probably a large part of why the population has moved to cashless payments was trust in the government, trust in the banking system and in its ability to both keep their money safe and also ensure safety of their transactions. But now with breaches in privacy and other concerns that we're seeing and again in Australia we're seeing the Royal Banking Commission and that diminishing trust in banks, trust seems to be shifting away from large institutions and hence people want to have the option of having cash.

Kai: And this is where I want to mention Bitcoin. It is quite significant that Bitcoin hasn't come up in any of those stories around going cashless. But Bitcoin in the context of trust is significant. I want to highlight that for many people the move to Bitcoin or cryptocurrency to a decentralised currency has been a fundamental distrust in government and institutions. And the idea that we can do away with a central bank and government issued currency in a move to Bitcoin. Significantly in Sweden and many European countries that same kind of distrust in government which seems to fuel the Bitcoin community in the US doesn't really exist. So ironically it has been the trust in government and the trust in institutions that has allowed these countries to move far ahead in the adoption of cashless payments even though it comes with problems of potentially going too far too quickly. It is nonetheless quite significant. We believe that it is the trust institutions that has allowed them to make that technological progress.

Sandra: Speaking of technological progress, let's move to our second story, actually to a whole range of stories that we've seen in the news increasingly over the past weeks and the past year but many of them that have come up last week around DNA. Our second story is from Engadget and it's titled "DNA is just another way we can't opt out of data sharing".

Kai: It comes on the back of the Golden State killer saga in California where police after decades of manhunt apprehended at what is believed to be the Golden State killer responsible for countless rapes and killing 12 people, by way of using an 'open-source' DNA sharing website.

Sandra: So the Golden State killer was actually identified through other people's DNA. The fact that a number of his extended family had shared their DNA with one of the large DNA databases. The fact that these DNA databases are able to construct family trees has allowed law enforcement agencies to actually tap into one of the 'open-source' genealogy websites - GEDmatch - and they uploaded his DNA and actually realised that this person was related to people they could actually track down and find.

Kai: So let's unpack this. This comes on the back of an increase in popularity of so-called DNA ancestry sites such as ancestry.com or 23andMe which allow people to send in a DNA sample. Basically a tube of spit on which the service then performs DNA sequencing and derives a DNA data set that is sent back to people. So those sites then will give people information about where their ancestry lies. You might be 10 percent viking, and a bit of Central European or Eastern European so you get this playful sense for where your family history lies but you also get as a by-product a data file called a GEDCOM. A genealogical data communication file that you can download and then upload to websites such as GEDmatch which allows you to actually find people you are related to - a distant uncle or an estranged cousin. So the point that we want to make is that neither ancestry.com nor 23andMe currently allow police law enforcement to tap into their data but it is people themselves that then later upload the data obtained from these sites to services such as GEDmatch to enable the police to do what they did in the case of the Golden State killer and that is upload a sample of the person that they obtained from the crime sites and then track down the killer by finding out who they are related to and therefore narrowing down the possible suspects and then finally obtaining a sample of the people they suspected to then find an identical match. So it was not the case that the person was identified directly from that database.

Sandra: So the point here is twofold. One is that we are just starting to understand the implications of sharing our own data online and that quite often these days when we share our own data it's actually more than that that we're sharing. We saw it with Cambridge Analytica, where actually giving people access to our own data, gave them access to our network of friends to what they shared and what they commented on or the conversations we've had with them. Similarly now with DNA we're actually giving access to our family tree, we are giving access to our relatives and the ability to identify people who might be in some way related to us and that means that just as in the case of Facebook and Cambridge Analytica people are not always in control of what gets shared about them. So say Kai someone in your extended family decides to share their DNA automatically there will be information about you that is out there that can be used to identify you, can be used to say certain things or assume certain things about you that you do not have control over nor can you opt out of. The second thing that is highlighted by this case is that quite often with the open-source DNA databases we do not have a lot of control over how these eventually get used. It's never been the case that these people share their DNA with the intent to allow law enforcement people to track down killers. Nor can they now have the option to opt out of having their DNA used for specific purposes.

Kai: This highlights two things in my view. One is that quite often with networked services we as individuals fail to see the broader collective or systemic implications of what we do individually. While I might have an interest to learn about my ancestry or while I might participate in an online service on Facebook, I often fail to recognise or acknowledge that my actions might actually impact others or that I'm contributing to creating a collective effect which is much broader and might negatively impact myself and others down the track such as contributing to the Cambridge Analytica data set which then enables manipulation of entire elections or in this case contributing to a DNA database that once there's hundreds of thousands of DNA samples becomes a very powerful tool for surveying entire populations of people.

Sandra: So through our individual actions actually creating these large imbalances of power and I think in this respect the end of the Engadget article actually pinpoints the issues that we need to have a conversation about. And first is the responsible stewardship of the data that is being shared on these websites whether they are open source or whether they are private companies such as ancestry.com or indeed government databases. And the second is the need to have a public conversation about the types of imbalances of power that these create in society and the types of systemic effects that we might get were we all to share our data.

Kai: And the author makes the point that quite often we have seen that companies can indeed change their terms and services. So the fact that ancestry.com and 23andme do not currently share their data doesn't mean that they can't change that and monetise that data or that they can't be bought by another company who might not be beholden to the same privacy standards. And the point is that once your DNA is out in the public you can never take it back and the data is quite personal - it is after all the biological makeup of our bodies. And there are certain private entities for example such as insurance companies and health funds who might very much like to get their hands on the s e data because it would allow them to calculate individual risks much better and we might end up not being able to purchase insurance for certain health risks on the back of this data leaking for example.

Sandra: So one of the main problems that arises here is the fact that when we think about privacy and when we think about regulation around privacy, when we think about policy around privacy, the very idea of privacy is defined as a personal good and the personal choice. The result of that is that we neither have regulation nor think of regulation in that space whether that is in the case of Facebook and Cambridge Analytica or in the case of DNA databases, we don't think of what data is being collected around other people, how that should be protected, what happens, what kind of actions and activities we enable by sharing that data. So until we start thinking about this as a systemic issue rather than a personal privacy issue we will keep running into these problems. And in a way we've seen inklings of this before with the Strava privacy debacle where individual runners sharing their data through the app actually enabled people to find military bases in the Middle East simply by aggregating the private data that each of these individuals were sharing. So I think we're just starting to grapple with how to think about privacy and protections not at the individual level but rather at the systemic level.

Kai: I'm sure we will see more of these kinds of topics going forward. What we want to do with our third story is we're gonna go backward. We want to join the Verge and talk about the future, this week 20 years ago. So the Verge ran an article this week looking at the tech news 20 years ago and remember this is 1998. This is pre-Google. Google is not to be founded for another four months on September 4 1998.

This is pre Apple releasing the iMac but it is the week when Steve Jobs rebooted Apple with the new iMac.

Sandra: So this is the future this week, 20 years ago. So just as we have a number of stories every week for you we'll look at the number of the stories from that week and the first one is indeed the Newsweek featuring the iMac in May 1998 which had a lot of praise for the new iMac calling it the coolest looking computer introduced in years. People were very cautious about predicting sales numbers for that but it definitely attracted a lot of attention.

Kai: And remember this is pre flat screen. These are the old TV-like iMacs with the handle on the top the translucent plastic that came in different colors. And it was also the introduction of the lower case 'i' in Apple products. At the time the reasoning was it stood for internet. Obviously it became a brand in its own right and has been with Apple ever since. But those were the days.

Audio from Apple: You got to see this thing in person. But I'll do the best I can with video. This is iMac, the whole thing is translucent you can see into it. It's so cool. We've got stereo speakers on the front we've got infrared right up here we've got the CD rom drive right in the middle we've got duel stereo headphone jacks. We got the coolest mouse on the planet right here. Come on around. All of the connectors are inside one beautiful little door here, the ethernet, the USB stuff. Around the back, we've got a really great handle here. The back of this thing looks better than the front of the other guys by the way.

Kai: This comes at a time when according to the Australian Bureau of Statistics 42 percent of all households in Australia had a computer. And of those three million households, more than 2.5 million reported that they were using it frequently defined as once a week or more at that time. With almost 850,000 households connected to the Internet at the time which was 13 percent of all households. So we're very much in the pre-Google era at that point.

Sandra: The second story from back in May 1998 comes from AT&T and what AT&T did 20 years ago was to announce a first flat rate mobile phone plan called the Digital One Rate and the big announcement was that you would get for 89 bucks a month you could get 600 minutes of talk time that lets you make long distance phone calls from anywhere in the country. And this was a very interesting move because even though at the time many news outlets including The Verge and its former columnist Walt Mossberg said that the service didn't really work quite well, the reception was a bit shit. It actually heralded the era of cell phone only. So this was actually the first step in people giving up their home lives, giving up their landlines and moving towards having the mobile phone or the cell phone as people's only phone.

Kai: In other news 20 years ago...spam. Much like we've heard earlier about moving money online being followed by digital fraud and cashless crime, moving communication online back in the day meant that a lot of the advertising and the shady underbelly of communication moved online as well so spam was a big deal at the time.

Sandra: And back in the bay there was talk about days and months of human suffering spent reading unwanted e-mail. Back then there were similar questions raised around free speech and how do we moderate content online and it turns out actually even some of the spammers are the same ones that would return back in 2016 to do the same thing on Facebook. "Spam King" Sanford Wallace appears in the May article from back in 1998 then makes a reappearance more than 18 years later engaging in similar behaviour on Facebook. So whilst the platforms have changed many of our underlying conversations around what these technologies challenge us to consider have remained the same.

Kai: And we leave you with this fun fact: Number one in the Billboard charts in that week 20 years ago was Turn Back Time. How appropriate. That's all we have time for today on The Future, This Week. Thanks for listening.

Sandra: Thanks for listening.

Outro: This was The Future, This Week made awesome by the Sydney Business Insights Team and members of the Digital Disruption Research Group. And every week right here with us our sound editor Megan Wedge who makes us sound good and keeps us honest. Our theme music is composed and played live from a set of garden hoses by Linsey Pollak. You can subscribe to this podcast on iTunes, Stitcher, Spotify, SoundCloud or wherever you get your podcasts. You can follow us online, on Flipboard, Twitter or sbi.sydney.edu.au. If you have any news that you want us to discuss please send them to us at sbi@sydney.edu.au.

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