This week: disturbing patents, smart housing, and asking a dangerous question. Sandra Peter (Sydney Business Insights) and Kai Riemer (Digital Disruption Research Group) meet once a week to put their own spin on news that is impacting the future of business in The Future, This Week.
The stories this week
17:05 – Co-housing for smart cities
26:35 – Should Amazon be nationalised?
Other stories we bring up
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Intro: This is The Future, This Week on Sydney business Insights. I'm Sandra Peter. And I'm Kai Riemer. 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: disturbing patents, housing and asking a dangerous question.
Sandra: I'm Sandra Peter, I'm the director of Sydney Business Insights.
Kai: I'm Kai Riemer, professor at the Business School and leader of the Digital Disruption Research Group. So Sandra, what happened in the future this week?
Sandra: Patents happened in the future this week. And our first story comes from the L.A. Times, and it's titled "Who lived with you? Facebook seeks to patent software to figure out profiles of households". Facebook is looking to patent a software that would allow it to profile people's households. So this would mean that they would make educated guesses about not only the number of people who are in your house, but what the relationships are between them, what interests they share.
Kai: Who's living with whom - not just in family, but also in shared houses. People having roommates. And they did use this not just from information that you freely share but also tagging in photos, image recognition in photos. And presumably anything else that they might have access to, such as messaging data between people, to then get a better understanding who lives together. And from this, of course, deduce needs or wants and then sell this content to advertisers.
Sandra: They would do this in the following way. They would look, for instance, at images that you would post on Instagram or on Facebook. And even though you might not post any images to these platforms...
Sandra: And I don't.
Sandra: Megan might post images to Instagram that would tag you in the picture. So Facebook would still be able to identify you in the pictures. And you could still be tagged a quite a number of these pictures. And then the software that Facebook is looking to patent would look at how often you get tagged together, would look at pictures' captions and so on, and try to infer from that what the relationship is and that whether you spend time at work or at home together and what the relationship between your two might be.
Kai: Do you know what I find most remarkable about this particular patent?
Sandra: Do tell.
Kai: Well, they are not doing this already, right. So in my view, yes they might be trying to patent this. And whether or not they might actually be able to do this is a different question. But the article quotes Pam Dixon, who is the founder and executive director of the World Privacy Forum, saying that today Facebook allows people to target ads based on information that is available already about you, right, on a fact basis. But she says this new pattern would mean that Facebook starts inferring, predicting data about you rather than just using what you give them. I can't believe that they are not doing this already. Surely they have the ability to do so, and if they do, they are already doing it. And we've discussed this example a while back where Facebook recommended friends to people that they had met or shared the same location. With you know, you go to the doctor with someone, or you are in the same pub with someone. And, then very disturbingly, you would then receive friends recommendations from Facebook. So surely they can also use location data, GPS data, tracking you on your mobile device to locate people in the same location, the same household, and do this already. So I find this patent a little bit behind the times, I must say.
Sandra: Surely they do this already, it's actually the business model that Facebook is built on and predicated on. Once they categorise you as a person who likes cats. It's not necessarily because you've expressly said that you like cats. But it's because maybe you are hugging your cat in every one of your pictures or maybe because you're following Instagram accounts of other cats.
Kai: And as much as I like cats, I'm not really on Instagram. But the point here is that Facebook uses all kinds of data to not only put labels on people, but also to put people in categories and then go on to target content based on this. So when Pam Dixon is outraged and say this will enter the realm of unfairness and potential bias and discrimination, I say no shit Sherlock. I think they already do this. And we've had a number of examples where this is visible.
Sandra: At the end of February actually Facebook patented another algorithm that allows it to predict users' social class using indicators other than the traditional ones which would be income. What they did in that instance, very similar to what they're doing now, is look at digital engagement so to speak and try to use other types of data to determine the person's social category. So they would look at things like home ownership, or your level of education, or how many devices you use to connect the Internet. Or even what restaurants you prefer to eat at or you hang out at most or the types of shoes that you prefer to buy and so on. And they were going to use this, not only to be able to match users to advertisers, but also potentially for use in their new dating application. So that they would prescribe a match that is within your social class.
Kai: So it's pretty clear that Facebook engages in predictive analytics already, and it's by no means just Facebook. Which brings us straight to Google and more patents that happened this week. So Google has also been in the news for a couple more patents that they have recently revealed that were submitted a bit earlier. And this article comes from the Atlantic, "The next data mine is your bedroom". Because much like Facebook, Google is also interested in our homes. So two patents are mentioned in the article. Google is proposing new home devices that can infer certain information from your surroundings or the activities that you engage in in your home.
Sandra: Imagine a smart camera in your house that would, for instance, recognise that - let's say you Kai - are wearing an Elton John T shirt. Or that you have just recently thrown one in the hamper, and would use that information to look at your browsing history and other habits. And then to just that, well you know maybe you want to go to an Elton John concert that is in Melbourne next weekend and that you actually have time to go to.
Kai: So I presume this device will then recommend the concert to me. Maybe already have booked flights because it checked my calendar and my credit card status. Or is this a step too far at this point? Surely they are working on something like this. But it goes much further than this. It would listen in to how you brush your teeth and infer from this whether you're doing it correctly. Maybe give your health tips. It would essentially pick up on any sounds or goings on in your home. And combine that with other data and infer potentially useful information for advertisers or services that it could provide for you.
Sandra: And that information could be: what are the genders of people you speak to most, whether your calm or aggressive or stress based on the timbre of your voice. It would look at your fashion taste and then potentially recommend things that would match what you like most to wear. It would look at what types of devices you have around you in your house and tell you that there have been new releases of this product and maybe you would like to acquire them.
Kai: But the system would also gain a sense of how orderly you are, how healthy you are, how you eat and how wealthy you are. Given that you might have expensive gadgets in your home, or art on the wall, and things like.
Sandra: And at this point, most people get really anxious about the fact that - oh my god how could Google even think of doing this?
Kai: Yes, yes indeed I do. And I find this slightly disturbing which, you know, I might be the only one maybe some of our listeners do too. But what I find most significant is that so far the home, with the exception of the use of our personal devices and maybe streaming services, the home as such has been a private space. And the American Constitution, with the sanctity of the home, protects the home as a special kind of space. And I think most societies have a sense for the home as this refuge, where we can shut the door and we can just be by ourselves. But for Silicon Valley the privacy of the home seems to just be another tech challenge to be solved. And what we can see with these patents coming in, it seems to be that moment in time where they have decided they're really going to tackle this challenge and find ways of providing us nice convenient services that get them the information that they want. Or am I being a bit too gloomy here?
Sandra: Well at this point I would take you back to our previous discussion around Facebook, and I'd say about if this sounds all a bit too much, I think it's quite important to note that Google and Facebook are pretty much already doing this. They're just not doing it with cameras. They're doing it with other types of information. And we've seen previous discussions - we'll include the links in the show notes - we know that Facebook most likely knows what your race is, what your sexual preference is, and also knows what your religion is, and can target things to you based on those indicators. Then Google, of course, reads your e-mails and has your search history, and sorts you into brackets so it can target ads to you. And even companies like Netflix would infer all sorts of things about you to be able to suggest certain movies to you. So there are hyper specific categories, which we discussed previously on this podcast, are already entering those areas in your lives that most of us would consider private and not open to scrutiny or to interpretation.
Kai: Yeah, I get all of this. But I think there's still a qualitative difference to being able to sift through my dirty laundry at home, and recommending me service on what T-shirt I've been wearing that day.
Sandra: Then you're going to love this next one, because the second patent that Google proposes is actually a smart home system.
Kai: This is the real disturbing one.
Sandra: The one that will help you run your household. And that would include sensors and cameras and all sorts of other things.
Kai: Well, it would help you run your household like day surveillance and police state essentially.
Sandra: So the idea here is that you could control or restrict the behaviour of other people in your household. Presumably this would be your children, but that could easily be other members of your household. So for instance, you could program a device to listen for certain types of language. In this case the article mentions foul language from children or it could scan Internet usage for certain keywords which already happens.
Kai: So my children my play my podcast and I might say shit and they'd be in trouble, right?
Sandra: Well the idea here is that you could define what the foul language is, and the system would enact the rules accordingly. Or you may set out other goals. For instance, how long people can spend on their iPhone or on their iPad. Or how much energy they can use throughout the house in a certain week. And then devices that are supposedly connected to your Google home would then be able to conform to those rules or listen in on conversations, so they can take certain actions. And this is something that Google could use, or that Google could potentially sell to third parties - let's say energy companies that are making smart light bulbs. And you would want to make sure that you're engaging in energy saving behaviour and so on and so forth.
Kai: And the dystopia doesn't end there. It could connect to your health care fund. Or it could share data with your life insurance. You could get a small deduction on your premium if you allow the Google device to monitor you at all times if it picks up smoke in the house. You better make sure it comes from the kitchen, because if it spots you smoking your insurance premiums go right up. And we're still talking about a patent here, this is not a black mirror episode.
Sandra: And this is also something that a whole range of companies are actually tinkering at the fringes of. For instance, insurance companies or large multinationals that have partnered with companies like Apple or Fitbit to provide fitness trackers or Apple watches to their employees and establish certain fitness goals. And then based on employees meeting those fitness goals, either provide them with lower insurance premiums or provide them with extra days off or other types of rewards.
Kai: Well sure. This is the workplace, right? Either I'm too old fashioned or I don't know why, but I still think it's a qualitative difference. If we let these technologies into our homes, because what then is left what room do we go to if we want privacy.
Sandra: So I think spelled out this seems like such a big step, but they would argue that we've already taken so many of the steps that got us there. Most of us have devices that either follow us around and track us. We're both actually wearing an Apple watch.
Kai: Ok, let me raise a serious question. What happens with all this information that is being inadvertently collected? I might agree to use the service, but maybe I haven't agreed to every piece of information that is being collected. Law enforcement cannot just come to my home without a warrant and just search my surrounds and demand certain information because the home especially protected before the law. But what if Google has that information already that concerns my private life, that was collected inside the four walls of my home. Is this still protected under the law? Or can law enforcement then demand having this information being handed over? And Sandra's raising her hand. So okay we're giving it to Sandra.
Sandra: Well, first of all let's remember you have agreed to this information being collected. You haven't however agreed to all the ways in which it could be used. Hence legal cases that are currently undergoing in the US where we're actually trying to figure out what the legal frameworks are around this. So an ongoing murder trial in the US, where the person being charged with murder actually wore a Fitbit, is testing the legal limits of disclosing this sort of information. Because the police are saying well actually the data on his Fitbit clearly proved that the person wasn't at home sleeping as they were claiming to be.
Kai: So there's a number of issues clearly that the legal profession privacy advocates, but also every one of us, will have to grapple with as these technologies go from patent to reality. And I want to quote Facebook here, who've released the statement in that first story. "We've often sought patents for technology we never implement, and patents should not be taken as an indication of future plans." So you know, maybe this will never come to fruition.
Sandra: Or maybe this tells us quite a bit about the ways in which Facebook and Google think about the role of technology in our lives.
Kai: And it is curious that they would release patents like this, given the recent controversies around the abuse of data and privacy invasions. Those patents at this point in time, and hence the focus on them in the media, clearly shows that the end of the line has not been reached in terms of the data hunger that these companies have shown in the past.
Sandra: But let's not forget a - that these companies can only go as far as we choose to let them. But also, this is a response to our never-ending hunger for personalised customised services available to us at any moment of the day or the night. This is why Amazon and Amazon Prime have taken off. This is why we have trillion-dollar companies that actually service these needs.
Kai: Yeah. New tech is cool. We want to explore these things. So it is our never-ending hunger for more convenience and personalised services that is in some way the root cause of these phenomena.
Sandra: And now for something completely different, because our second story...
Kai: Is actually a low-tech story and a feel-good story in a way as well.
Sandra: Yeah, we don't do many of those. But this story that has nothing to do with technology. And it looks at the future of cities.
Kai: Well, it comes under the label of smart cities, but it wants to make the point that smart should not necessarily equal more tech.
Sandra: The story comes from The Conversation and it's titled "How this non-tech solution could lead the way to smarter cities". And it's been republished in a number of places including in Inverse. But it really doesn't talk at all about technology. Even though technology is seen as the cornerstone to solving all the problems that stem from rapid urbanisation, whether they have to deal with housing or poverty or healthcare or climate change. This article gives us a different way of thinking about solving some of these problems.
Kai: So the topic of this article is co-housing. And we're going to unpack what that means. First of all let us tell you what that doesn't mean. So co-housing is not to be confused with co-living, which is more hostel style, short term arrangements, where strangers just share infrastructure for a while, while they work in a city. It is not to be confused with a gated community or property developers developing sometimes entire suburbs with shared infrastructure such as swimming pools, golf courses and barbecue facilities, or even cafes and shopping centres. Co-housing is a concept where the citizens, the people living in the community, own the decision making around what that community should look like.
Sandra: So co-housing refers not just to the outcome - the thing that results at the end, the living arrangement and the building around it - but also to the process by which you design and you get to this form of cooperation. So think about a group of people coming together to design one of these communities, and then physically inhabit and live together in that community according to the rules that they themselves set out for how they want to live together.
Kai: Making decisions about what communal facilities they should be having, how large the private houses or apartments would be, what the activities would be that one would typically do together on a regular basis in these communities. And co-housing facilities often have community kitchens where people cook with each other according to a roster and invite each other where they spend time together, even though each house or each apartment might be equipped with their own kitchen. The idea really is that the community not only makes decisions about what the place will look like and how they would live in there, but also share a lot of the daily activities in that place.
Sandra: And we bring this article up for a number of reasons. Over the last year, we've spoken a lot about Alphabet's or Google's Sidewalks lab, which is mapping out the whole new neighbourhood in Toronto. And we had a whole episode on that. We had a number of episodes talking to people like Toorun Alizade about what a smart city is, and talking about the fact that even though we're infusing this place with the knowledge, we actually don't have a good definition of what would make a city smart, and for whom and for what purposes. We don't actually have a good understanding or even a good definition, neither in academic circles nor in business circles, about what this means.
Kai: And an important point is that tech is not the problem here. But the way in which these visions for smart living, smart suburbs, smart homes is often articulated in a decidedly top down way. Citizens and their needs and wishes come in at some point. But it is certainly not driven by the community or by people who put a sense of community and communal ownership first. So community is may be the intended outcome of a smart city initiative, whereas in cohousing it is the beginning, the start, the basis of everything. And so a closer look at how these communities actually develop is important because they are by no means intended to be fringe living arrangements but as solutions for how we rethink cities and living arrangements in suburbs more broadly.
Sandra: So the way to think about this co-housing arrangement is to think beyond what it can offer to a group of people such as students or people who have just finished their studies and are just joining the workforce and require a lot of flexibility. But the other think of this more broadly in the context of a community. Once you think of people designing developing and managing these dwellings together - and typically these projects will have somewhere between 15 and 30 households who share a common property or a common house but they also have their individual structures - such cooperatives can actually help seed communities into a larger area. So if you have larger developments, this idea of bringing together a community that works together and agrees on how they want their neighbourhood to perform, we can think of such models existing not outside the normal top down approaches but working together with the ways in which we currently design communities.
Kai: And interestingly, the article mentions a number of outcomes of such projects that have been done in Denmark or places like Canada. One thing is that people seemed to be more involved. They seem to care more about the shared facilities and so facilities are taken care of in a better way. But also even though many of these projects are not deliberately green certified, they are not built as green housing, the environmental outcomes are often much better than dedicated top down and often tech heavy projects that are planned from scratch to be green. Because when people make shared decisions, it turns out that the footprint of the private spaces is often smaller, and the communal space is often bigger which improves heating and cooling costs in summer respectively. That they produce less waste, less garbage.
Sandra: And indeed, such co-housing communities, we have fairly good research on this, that they can outperform green buildings on environmental measures. And this is much more related to the governance structure that these buildings have rather than the technological innovation. So such communities, whether they're across North America or Australia or indeed Europe, actually would benefit from the capacity that large companies such as Alphabet have to mobilise people and resources to build communities. So the argument here is that...
Kai: Sharp decision making basically leads to better outcomes.
Sandra: And that there is much to be gained from pairing top down approaches with bottom up approaches.
Kai: So let's not forget this is not an anti tech story. It just goes to show that you do not necessarily need technology to get good outcomes. So may be if we were to pair technological innovation with a different ownership and governance structure, projects like the waterfront project in Toronto might become even more successful than the mere application of automation and digital technology for environmental efficiency could ever be.
Sandra: And there are two more reasons we wanted to talk about this. One is the fact that, interestingly enough, if you look at the public conversation around co-housing, quite often in Australia this conversation has been framed in terms of affordability. And whilst affordability is of course extremely important.
Kai: Especially in Australia, given the property market and house and rental prices.
Sandra: This is by no means the only reason, nor is it the main reason, why such co-housing arrangements exist. Besides the benefits that we have discussed up until now, there's also one more that we want to highlight and to which co-housing actually provides a surprising solution. Again one of the big stories that we have this year has been around loneliness.
Kai: So yes, loneliness is a big issue. Not just in the workplace, in people's private lives. And the argument here is that the way in which housing, especially at high density, is done in Western cities does not necessarily lend itself to the emergence of community or interpersonal relationships. Which if they are not established at work, have to then be established in sports clubs, societies, at the gym. But the way in which cities are designed, or housing is designed, does often not lend itself to the emergence of community.
Sandra: We've discussed loneliness previously, not just as a private issue but also in terms of lower job performance. We had earlier this year a rather lengthy conversation about loneliness as the former U.S. surgeon general estimated that loneliness is the most prevalent ailment within communities. And this was a bit ironic given that we live in the most technologically connected age in history. And loneliness rates had doubled over the past 25 years. And the research around that we want to remind our listeners was quite staggering. Being lonely can reduce a person's lifespan to the scene extent as someone who smokes 15 cigarettes a day.
Kai: So maybe co-housing is not just a solution to many of the environmental and waste problems of cities and housing, but also to the often-forgotten loneliness problem.
Sandra: And that's almost all we have time for today but maybe a few short bites before we go.
Kai: Future bites. So my future bite is nationalise Amazon.
Sandra: Well that's funny because that's mine as well from The Outline.
Kai: That's right. Okay.
Sandra: Ah, so the article asks, is this a realistic demand? So this seems like a strange question to ask. And we've done some previous episodes where we talked about monopolies. And we particularly discussed Amazon in terms of its market power and its evolution to the trillion-dollar company that it is today. But there are actually some arguments for why you would nationalise a company like Amazon.
Kai: Well current thinking wrong monopoly says as long as the consumer is okay and prices come down there is no issue. But the issue with Amazon has come to a head in its recent competition for cities to put up their hands to become the second headquarters. It has widely been reported that this looks like a scam, that they were just out to gather some information. They were playing the mayors to put their hand up to just see how much they could squeeze out from the eventual winners which seem to have been decided a long time ago. So on display here was the unchecked power of a large and highly influential company for the benefit of a few people, and their influence such as Jeff Bezos and Amazon shareholders at the expense of cities, neighbourhoods which will become more expensive. And so the question here being if these companies become so influential as nation states, wouldn't it be better to have them under democratic ownership to begin with? And we've mentioned this before, the moment a company becomes so large, influential and indispensable in people's lives - not only for many retailers who list their services there, but also for customers - they essentially become utilities. And utilities are typically regulated to ensure fair access, equitable outcomes for everyone. So the article asks the question is it now the point where we have to have the discussion to nationalise, or at least heavily regulate, Amazon?
Sandra: Indeed. There are also good reasons against nationalising a company like Amazon. The largely held belief that private corporations are always more efficient than state owned ones. And for a company like Amazon, we've seen the continuing drop in prices that have been offered to consumers and an increase in the services and the types of services and diversity that are offered. Another interestingly compelling argument from the article talks about the surveillance technologies that Amazon is developing including face recognition technologies and so on that we've discussed previously on this podcast. And then the argument here would be that you would not want a government owning that much data and knowing that much about its citizens.
Kai: Yeah but hang on. You could equally argue that given the kind of technologies that companies like Amazon now engage in, you would want democratic oversight of how these are being used, who they are being sold to, who gets access to these technologies.
Sandra: You could also argue against nationalising Amazon on the basis of investors who have the money and support the rise of companies such as Amazon. If you're going to nationalise the company that becomes that successful, how is there an incentive for me to try to find this companies and what is the incentive for such companies to continue to innovate and develop and grow to a size where they know that the risk is there? So Kai, if picking the winner becomes a risk, how would you think about what companies to invest in?
Kai: So we're not going to settle this here, but what we want to highlight is what the article points out, is that we need to be able to ask these outrageous, these dangerous questions in order to have a conversation that is unshackled from ideologies that might hold us back from finding real solutions to problems that are no doubt there when it comes to Amazon. Be it access to their services, workers’ wages, the power that they wield over where to put their headquarters, or indeed the use of data as we discussed earlier, and I think that's all we have time for today.
Sandra: Thanks for listening.
Kai: Thanks for listening.
Outro: This was The Future, This Week made possible 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.
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Sandra: We have smart speakers in our houses that we know listen to us.
Kai: Speak for yourself.
Sandra: You don't have a...?
Sandra: Home port?
Sandra: You said you were getting one.
Kai: I didn't! It listens. I don't like it.
Sandra: And your phone doesn't? Hey Siri!
Kai: Hope not.
Siri: <Makes a sound>.
Kai: Hey! That's my Siri.
Kai: Oh it's your phone, it's your phone. See! Mine doesn't listen.