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Left out of the digital revolution?

13 December 2018/0 Comments/in Digital, Economics and Society, In the News/by I'MTech

Dominique Pasquier, Télécom ParisTech, Institut Mines-Télécom (IMT)

This text is published as part of the “Digital Society” column written by researchers from the Economic and Social Sciences department at Télécom ParisTech, members of the Interdisciplinary Institute for Innovation (CNRS).

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[dropcap]S[/dropcap]ome revolutions are silent ones. Internet integration in working-class areas is one such example.

Where do we stand in terms of the “digital divide”?

In the early 2000s there was a lot of talk about the “digital divide” focusing on inequality in terms of both access and uses. Annual reports by CREDOC have shown that over the past ten years working-class categories have started to catch up in terms of internet access: in France, between 2006 and 2017, the proportion of employees with Internet access at home increased from 51% to 93%, while for blue collars it rose from 38% to 83% (CREDOC 2017 : 48).

Age, rather than income or level of education, is now the most determining factor (8 out of 10 of those who never use the internet are 60 or older). But these same reports show that while the divide is closing in terms of internet access, internet use among working and lower classes remains less varied and frequent than among the middle and upper classes. Individuals without college degrees find it harder to adjust to paperless administrative services, do less research, buy less online, and only very rarely produce content. In short, there appears to be a kind of “working classes’ internet” that is less creative, less daring and less useful to a certain extent.

Shifting the focus

Perhaps the question should be looked at from a different angle. These statistical surveys are based on tallying up and lamenting shortcomings in comparison to the most innovative internet practices, meaning those of young, educated urban populations. The issue could be examined from a different perspective by starting out with the idea that the internet practices favored by the working and lower classes make sense in light of their everyday needs and that they are important indicators for understanding their relationship with the world and possible transformations in this relationship.

As Jacques Rancière explained in his analysis of written productions of workers in the 19th century, it is a matter of setting the equality of intelligences as a starting point for discussing and understanding how “a common language appropriated by others” can be re-appropriated by those for whom it was not intended (Rancière 2009 : 152).

This shifted focus would make it possible to perceive uses that may not stand out as remarkable, but which have dramatically transformed the relationship with knowledge and learning among those with low levels of education. Examples of such uses include looking up words used by doctors or found in headings of children’s homework. For sophisticated internet users, these uses may seem rather basic, but in the meantime they bring about profound changes by making relationships with experts less asymmetrical and by reducing the phenomena of “deferential attitude” among the working classes that Annette Lareau analyzes in her excellent book, Unequal Childhoods (2011).

Online research: learning and shopping

Employees with lower-paying jobs who do not use digital technology for work also spend a great deal of time online to inform themselves about their profession or their rights: the success of websites for caregivers is a good example. Childcare workers discuss their views on bringing up children and hospital service workers talk about their relationships with patients. It is also important to note the ways in which tutorials have revived interest in expertise traditionally held by the working class: novel cooking ingredients, new gardening or DIY methods and never-seen-before knitting patterns have made their way into homes.

Working-class families thus use the internet to learn, but they also use it make purchases. For people who live in rural or semi-rural areas, being able to access goods that had previously been impossible to find nearby in just a few clicks would appear to represent a huge opportunity. But in reality, it is a bit more complicated. Online marketplaces are less appreciated for their choice as they are for the savings they provide through browsing for special offers. Looking for deals is the main source of motivation, along with the fact that this makes it possible to manage supplies by purchasing in batches. At the same time, these savings are guilty of playing a role in weakening local business – or what remains of local business anyway.

In communities where people know each other well, shopkeepers are also neighbors – and sometimes friends – and betrayal can leave both sides feeling bitter. On the other hand, marketplaces for secondhand goods, such as Le Bon Coin which has recruited a significant number of rural and working-class customers, are described as virtuous markets: they allow people to enjoy leisurely browsing by geographic location (this has become a new source of gossip!) and provide an alternative to throwing away used goods. These marketplaces also give people the opportunity to earn a little money and help those who buy goods maintain a sense of pride, since they are able to furnish their homes or buy clothes at a low cost without resorting to donation systems. Online shopping has therefore led to paradoxical changes in relationships with the local community, as it has destroyed certain ties but created others.

Using the internet for reading and communication

The internet can be described as a relationship with writing – the mark of those who have created it. This can be difficult for individuals with low levels of education who do not write much in their work. Email, which requires standardized writing, is largely underused in these working-class families: it is only used to communicate with e-commerce websites or administrative services, and is often related to a problem in the latter case.

This is also because email is based on an interpersonal, asynchronous communication rationale that goes against the standards of face-to-face relationships and group discussion that are so prevalent in working-class communities. Facebook has fared much better: it allows users to exchange content by sharing links, is in keeping with a group discussion system and does not require formal writing of any kind. This social network appears to be a good way to stay in touch with extended family and close friends, while seeking consensus on shared values. It is a self-segregating network which is not particularly open to other social worlds.

While the internet has kept many of its promises in terms of our relationship with knowledge, it clearly has not managed to break down the barriers between different social worlds.

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Dominique Pasquier, sociologist, research director at CNRS and author of L’Internet des familles modestes. Enquête dans la France rurale (The Internet of Low-Income Families. A Survey in Rural France) Paris, Presses des Mines, 2018.

Dominique Pasquier, sociologist, research director at CNRS, member of the Interdisciplinary Institute for Innovation (i3), Télécom ParisTech, Institut Mines-Télécom.

The original version of this article was published in French on The Conversation France.

Also read on I’MTech

How working classes use digital tools: The Facebook example

Social media and crisis situation: learning how to control the situation

5 December 2018/0 Comments/in Economics and Society, In the News/by I'MTech

Attacks, riots, natural disasters… all these crises spark wide-spread action among citizens on online social media. From surges of solidarity to improvised manhunts, the best and the worst can unfurl. Hence the need to know how to manage and coordinate these movements so that they can contribute positively to crisis management. Caroline Rizza, a researcher in information and communication sciences at Télécom ParisTech, studies these unique situations and the social, legal and ethical issues they present.

Vancouver, 2011. The defeat of the local hockey team in the Stanley Cup final provoked chaos in the city center. Hooligans and looters were filmed and photographed in the act. The day after the riots, the Vancouver police department asked citizens to send in files in order to identify the hooligans. Things soared out of control. The police were inundated with an astronomical quantity of unclear images, in which it was hard to distinguish hooligans from those seeking to contain the rioters. Citizens, feeling warranted to do so in response to the call to witness by the authorities, were quick to create Facebook pages to disclose the images and allow the identification of supposed criminals by internet users. Photographs, names and addresses spread across the internet. A veritable manhunt was organized. The families of accused minors were forced to flee their homes.

During the riots in Vancouver, citizens posted images of rioters on Facebook
and organized a veritable manhunt…

The case of the riots in Vancouver is an extreme example, but on the other side of the Atlantic, other cases of civilian mobilization have also raised new issues. In an act of solidarity during the attacks in France on 13 November 2015, Parisian residents invited citizens in danger to take refuge in their homes and shared their addresses on social media. They could have become targets for potential attacks themselves. “These practices show how civilian solidarity is manifested on social media during this kind of event, and how this solidarity can impact professional practices of crisis management and create additional difficulties” comments Caroline Rizza, a researcher in information and communication sciences at Télécom ParisTech. The MACIV project (Management of CItizens and Volunteers: social media in crisis situation), launched last February and financed by the ANR via the French General Secretariat for Defense and National Security, examines these issues. Its partners include Télécom ParisTech, IMT Mines Albi-Carmaux, LATTS, the French Directorate General for Civil Security and Crisis Management, VISOV, NDC, and the Defense and Security Zone of the Paris Prefecture of Police. At Télécom ParisTech, Caroline Rizza and her team are working on the social, ethical and legal issues posed by these unique situations.

Coordinating surges of civilian solidarity for better crisis management

“We are going to work on case studies of initiatives through crises which occur regularly or are likely to reoccur, such as train strikes or periods of snow, in order to analyze the chronological unfurling of events and the way in which online social media is mobilized,” explains the researcher. “We are also interested in the way in which information is published and spreads on online social media during serious incidents. We are going to conduct interviews with institutional operators to understand how they have been impacted internally, as well as with contributors to Wikipedia pages.” Given that the development of these pages is participatory and open, does the widely-trusted information they contain come from institutions or citizens?

For the researcher, the aim is to see the emergence of different types of organization that can later be used in crisis management. Based on the recommendations drawn from this study, the project’s objective is to integrate a management module for citizen initiatives on a platform for mediation and coordination in the event of a crisis, created by IMT Mines Albi-Carmaux, and whose development was launched in the framework of other projects such as the GéNéPI project by the ANR.

“Citizens are often mass-mobilized in a rush of solidarity during crises. Despite good intentions, the number of people taking action is often so great that they interfere with good crisis management and the phase in which the authorities take over” comments Caroline Rizza. For example, after a flood, surges of solidarity to clean the streets can in fact hinder the authorities in charge. Similarly, after the attacks in Paris on 13 November 2015, blood donor organizations started to refuse donations because they had become too numerous in too short a space of time, whereas the need for blood donations is a long term one. Hence the need to properly manage and coordinate civilian mobilization.

Data protection, fake news and unclear legal situations

Besides the simple question of coordination, the management of mobilization among civilians and volunteers raises complex ethical and legal issues. In extreme situations, citizens are more likely to expose themselves in order to help or find an immediate solution, as shown by the “parisportesouvertes” hashtag on Twitter during the attacks of 13 November. Moreover, when the Eyjafjallajökull volcano in the south of Iceland erupted in 2010, citizens and stranded tourists shared data to organize, find alternative travel solutions or come in aid of people blocked by the eruption. The result: this data was recovered by private companies. “In the context of the transition to the GDPR, it is essential to examine the question of personal data and be able to guarantee citizens that their data will not be employed by third parties or used out of context” says Caroline Rizza.

During the attacks in Paris on 13 November 2015, some users shared their address on social media, notably through #parisportesouvertes.

But personal data is not the only thing leaked on online social media. During the attack on 14 July 2016 in Nice, false information maintained that hostages had been taken in a restaurant, when people were in fact simply taking shelter. “These rumors are not necessarily spread with bad intentions,” explains the researcher, “but it is absolutely necessary to integrate and analyze the information in order to quench rumors because they can cause even more panic.” Caroline Rizza’s hypothesis is therefore that the integration of social media in crisis management, in terms of institutional communication or transmission of information from the field, will allow rumors about an event to be quickly contained.

Lastly, what about prevention and the preparation of citizens for disasters? “Although these two phases are often left to one side by studies, there are very real challenges in ensuring that citizens participate themselves in prevention through online social media” explains Caroline Rizza. Nevertheless, the researcher stresses that the authorities must maintain an ethic of shared responsibility. They must never offload onto citizens. But what can the authorities ask citizens to do? To publish information? Help others? The legal vacuum remains…

Whatever answers the MACIV project provides to these problems, the integration of online social media in crisis management must be carefully studied. Although we cannot circumvent traditional channels of information, since not all citizens necessarily have a Twitter or Facebook account, it is no longer possible to manage crises without including the latter in the strategies. As Caroline Rizza says: “whatever happens citizens will use them in a crisis, with or without us!”

Four flagship measurements of the GDPR for the economy

14 November 2018/0 Comments/in Digital, Economics and Society, In the News/by I'MTech

Patrick Waelbroeck, Professor in Economic Sciences, Télécom ParisTech, Institut Mines-Télécom (IMT)

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[dropcap]N[/dropcap]umerous scandals concerning data theft or misuse that have shaken the media in recent years have highlighted the importance of data protection. The implementation of the General Data Protection Regulation (GDPR) in Europe is designed to do just that through four flagship measurements: seals of trust, accountability, data portability and pseudonymization. We explain how.

Data: potential negative externalities

The misuse of data can lead to identity theft, cyberbullying, disclosure of private information, fraudulent use of bank details or, less serious but nevertheless condemnable, price discrimination or the display of unwanted ads whether they are targeted or not.

All these practices can be assimilated to “negative externalities”. In economics, a negative externality results from a failing in the market. It occurs when the actions of an economic actor have a negative effect on other actors with no offset linked to a market mechanism.

In the case of the misuse of data, negative externalities are caused for the consumer by companies that collect too much data in relation to the social optimum. In terms of economics, their existence justifies the protection of personal data.

The black box society

The user is not always aware of the consequences of data processing carried out by companies working in digital technology, and the collection of personal data can generate risks if an internet user leaves unintentional records in their browser history.

Indeed, digital technology completely changes the conditions of exchange because of the information asymmetry that it engenders, in what Frank Pasquale, a legal expert at the University of Maryland, calls the “black box society”: users of digital tools are unaware of both the use of their personal data and the volume of data exchanged by the companies collecting it. There are three reasons for this.

Firstly, it is difficult for a consumer to check how their data is used by the companies collecting and processing it, and it is even more difficult to know whether this use is compliant with legislation or not. This is even more true in the age of “Big Data”, where separate databases containing little personal information can be easily combined to identify a person. Secondly, an individual struggles to technically assess the level of computer security protecting their data during transmission and storage. Thirdly, information asymmetries undermine the equity and reciprocity in the transaction and create a feeling of powerlessness among internet users, who find themselves alone facing the digital giants (what sociologists call informational capitalism).

Seals and marks of trust

The economic stakes are high. In his work that earned him the Nobel Prize in Economic Sciences, George Akerlof showed that situations of information asymmetry could lead to the disappearance of markets. The digital economy is not immune to this theory, and the deterioration of trust creates risks that may lead some users to “disconnect”.

In this context, the GDPR strongly encourages (but does not require) seals and marks of trust that allow Internet users to better comprehend the dangers of the transaction. Highly common in the agri-food industry, these seals are marks such as logos, color codes and letters that prove compliance with regulations in force. Can we count on these seals to have a positive economic impact for the digital economy?

What impacts do seals have?

Generally speaking, there are three positive economic effects of seals: a signaling effect, price effect and an effect on quantity.

In economics, seals and other marks of confidence are apprehended by signaling theory. This theory aims to solve the problems of information asymmetry by sending a costly signal that the consumer can interpret as proof of good practice. The costlier the signal, the greater its impact.

Economic studies on seals show that they generally have a positive impact on prices, which in turn boosts reputation and quantities sold. In the case of seals and marks of trust for personal data protection, we can expect a greater effect on volume than on prices, in particular for non-retail websites or those offering free services.

However, existing studies on seals also show that the economic impacts are all the more substantial when the perceived risks are greater. In the case of agri-food certifications, health risks can be a major concern; but risks related to data theft are still little known about among the general public. From this point of view, seals may have a mixed effect.

Other questions also remain unanswered: should seal certification be carried out by public or private organizations? How should the process of certification be financed? How will the different seals coexist? Is there not a risk of confusion for internet users? If the seal is too expensive, is there not a danger that small businesses won’t be able to become certified?

In reality, less than 15% of websites among the top 50 for online audience rates currently display a data protection seal. Will GDPR change this situation?

Accountability and fines

The revelations of the Snowden affair on the large-scale surveillance by States have also created a sense of distrust towards operators of the digital economy. To the extent that, in 2015, 21% of Internet users were prepared not to share any information at all, whereas this was true of only 5% in 2009. Is there a societal cost to the “everything for free” era on the Internet?

Instances of customer data theft among companies such as Yahoo, Equifax, eBay, Sony, LinkedIn or, more recently, Cambridge Analytica and Exactis, number in the millions. These incidents are too rarely followed up by sanctions. The GDPR establishes a principle of accountability which forces companies to be able to demonstrate that their data processing is compliant with the requirements laid down by the GDPR. The regulation also introduces a large fine that can be as much as 4% of worldwide consolidated turnover in the event of failure to comply.

These measures are a step in the right direction because people trust an economic system if they know that unacceptable behavior will be punished.

Data portability

The GDPR establishes another principle with an economic aim: data portability. Like the mobile telephony sector where number portability has helped boost competition, the regulation aims to generate similar beneficial effects for internet users. However, there is a major difference between the mobile telephony industry and the internet economy.

Economies of scale in data storage and use and the existence of network externalities on multi-sided online platforms (platforms that serve as an intermediary between several groups of economic players) have created internet monopolies. In 2017, for example, Google processed more than 88% of online searches in the world.

In addition, the online storage of information benefits users of digital services by allowing them to connect automatically and save their preferences and browser history. This creates a “data lock-in” situation resulting from the captivity of loyal users of the service and characterized by high costs of changing. Where can you go if you leave Facebook? This situation allows monopolizing companies to impose conditions of use of their services, facilitating large-scale exploitation of customer data, sometimes at the users’ expense. Consequently, the relationship between data portability and competition is like a “Catch-22”: portability is supposed to create competition, but portability is not possible without competition.

Pseudonymization and explicit consent

The question of trust in data use also concerns the economic value of anonymity. In a simplistic theory, we can suppose that there is an arbitration between economic value on the one hand and the protection of privacy and anonymity on the other. In this theory there are two extreme situations: one in which a person is fully identified and likely to receive targeted offers, and another in which the person is anonymous. In the first case, there is maximum economic value, while in the second the data is of no value.

If we move along the scale towards the targeting end, economic value is increased to the detriment of the protection of privacy. Conversely, if we protect privacy, the economic value of the data is reduced. This theory does not account for the challenges raised by trust in data use. To develop a long-term client relationship, it is important to think in terms of risks and externalities for the customer. There is therefore an economic value to the protection of privacy, which revolves around long-term relationships, the notion of trust, the guarantee of freedom of choice, independence and the absence of discrimination.

The principles of pseudonymization and explicit consent in the GDPR adopt this approach. Nevertheless, the main actors have to play along and comply, something which still seems far from being the case: barely a month after the date of effect of the regulations, the Consumer Council of Norway (Forbrukerrådet), an independent organization funded by the Norwegian Government, accused Facebook and Google of manipulating internet users to encourage them to share their personal information.

Patrick Waelbroeck, Professor in Economic Sciences, Télécom ParisTech, Institut Mines-Télécom (IMT)

The original version of this article (in French) was published on The Conversation.

Also read on I’MTech :

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Personal data: How the GDPR is changing the game in Europe

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GDPR comes into effect. Now it’s time to think about certification seals!

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Innovation: to be or not to be responsible?

19 October 2018/0 Comments/in Economics and Society, In the News/by I'MTech

How should the concept of responsibility be defined at a time when innovation prides itself on providing answers to major societal issues? For organizations, the concept of responsible innovation is not quite the same as for the scientists studying the issue. Cédric Gossart is among the latter. He examines what responsible innovation really is.

“Companies are quick to call themselves ‘responsible’” Cédric Gossart observes with amusement. A researcher in management science at Institut Mines-Télécom Business School, he has noticed that organizations like to promote their innovations as meeting the criterion of responsibility. However, this self-evaluation gives rise to a certain problem, since the word responsibility takes on almost as many definitions as there are companies boasting about it. It is therefore necessary to carefully examine what responsible innovation really is.

This is part of the task that Cédric Gossart has set himself. On 21 June, he took part in a scientific seminar on “Research and responsible innovation: interdisciplinary issues” led by LITEM, a research laboratory in management and economics and organized in interdisciplinary collaboration with five other laboratories from the Saclay group and supported by the Maison des Sciences de l’Homme of Paris-Saclay. His talk on “are digital social innovations responsible?” closely compared the concept of responsibility as perceived by businesses with the more theoretical view of responsible innovation upheld by the academic sphere.

“End use is an important aspect in the concept of responsibility,” explains the researcher. Technological, social or organizational disruptions must provide answers to challenges raised by sustainable development or inclusion. But although organizations see this criterion as being sufficient, there is a crucial aspect missing. “It is essential to take account of the way in which an innovation is carried out,” insists Cédric Gossart. The inclusion of eco-design, privacy-by-design and non-discrimination right from the development phase is equally important.

However, this second aspect is too often left out from businesses’ claims of responsibility. The researcher at Institut Mines-Télécom Business School recalls the case of a start-up developing pollution sensors. The young company adopted a participative approach: the sensors were carried with the users as they traveled throughout the day to assess the quality of the air and establish maps of the areas least exposed to fine particulate matter and volatile compounds. In this case, the end use of this digital social innovation clearly adheres to a responsible approach. “It provides a response to an issue in society: pollution. On the other hand, no information is given on the environmental impact of the servers or the life cycle of the sensors. In a truly responsible approach, the beneficial impact of this start-up would offset its environmental footprint” argues Cédric Gossart.

Who should be the judge of responsibility?

For a stricter assessment of responsibility, companies should not evaluate themselves. Currently, organizations use responsible innovation as evidence of how they meet the challenges raised by sustainable development. It is one of the topics covered by annual activity reports. “Businesses themselves present, in a communication context, the actions they undertake and how they carry out self-assessment” explains Cédric Gossart. “In a few rare cases they go one step further by undergoing certification by independent bodies.”

But responsible innovation does in fact have a strict academic definition. In 2013, the British researchers Jack Stilgoe, Richard Owen and Phil Macnaghten published an article in the journal Research Policy in which they attributed four criteria to it. Anticipation consists in considering the consequences of the developed innovation. Reflexivity allows examination of the development itself. Inclusion of stakeholders is another important criterion for defining responsibility. Lastly, responsiveness must also be taken into account in order to adapt the innovation to new elements, such as a change in legislation or user feedback.

Cédric Gossart nevertheless admits that “the problem facing digital social innovations is finding a business plan. It is therefore difficult to meet these criteria and at the same time find a market.” But although the cost of responsibility may seem problematic, the researcher reminds us that even inexpensive innovations can succeed. This was the also the topic addressed by Cees Van Beers, a researcher at TU, Delft, in the Netherlands, during a seminar on responsible innovation. “For him, an innovation is responsible when it is available to even the poorest.” Perhaps this is an additional criterion to add to the notion of responsibility…

The economy of promises, how to fall in love with a growth rate

4 October 2018/0 Comments/in Economics and Society, In the News/by I'MTech

Fabrice Flipo, Institut Mines-Telecom Business School

This article was published in association with the “Does progress have a future?” series of conferences organized by the Cité des Sciences et de l’Industrie, from Tuesday 15 to 26 May 2018. Over a two-week period, groups of students, a panel of citizens and scientists, historians and philosophers shared their views and debated the topic.

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[dropcap]R[/dropcap]educed food supply, loss of biodiversity, pollution, the energy crisis… Although reports pointing to the negative consequences of the current production system continue to accumulate, the economy of promises is in full swing. Growth and progress have become confused and the hope of seeing the emergence of technological solutions remains, despite all evidence to the contrary?

Ever-more capital-intensive production tools

Growth has determined, and continues to determine, the meaning of progress: a “constant striving for more.” In science, sport, mobility, energy and other sectors production tools are increasingly capital-intensive: the quantity of capital necessary to put them in place continues to grow. Likewise, in biology, “modern” genetics could not exist without the machines that make it possible to analyze the genome. In astrophysics, it is impossible to observe distant stars without orbital telescopes. In the humanities, digital technology is increasingly used to study and distribute texts and make them available for the entire planet — for those who have a suitable device, that is. In sports, how can continuous record-breaking be understood without taking account of the equipment used? Round-the-world sailing is a perfect example: even the most talented sailor in the world could not win a race without a “Ferrari” of the sea.

This accumulation of capital, beyond the play of supposedly competitive markets, is central to the notion of progress that has gradually gained ground since the 19^thcentury, a process accurately described by Marx in his works: capitalists buy, sell, and above all, accumulate.

Winner takes all

This progress is determined by rules and standards that give entrepreneurs great leeway, in both the private and public spheres (socialist economies have been described as effectively being structured by an Entrepreneurial State). This is not an outdated analysis, as can be seen both by the current success of “Communist” China and the importance of planning at all levels of “private” businesses and the economy. Although strategic management and marketing do not plan ten or twenty years ahead, they contribute to stabilizing the process toward accumulation. The model of Silicon Valley provides a striking example: billions of dollars in public funds, startups bought at 99% by major firms that continue to grow.

This is the famous “winner takes all.” The expression is often associated with digital technology, but things were no different before its development: in the automobile industry, for example, out of the hundreds of manufacturers that once existed, only ten or so are left standing.

Citizen involvement, consequences: overlooked aspects?

Against this backdrop, citizens are left with a limited role: they are seen, above all, as a malleable material, recipients of goods and services that, by definition, represent progress. In prevailing theories and decisions, citizens’ behavior is interpreted solely as a gluttonous appetite seeking only to maximize pleasure.

The example of digital technology has demonstrated this repeatedly: at the outset, it was a supply, rather than demand, market. Desire was low. It was sparked by passionate speeches by Al Gore and other public officials about “information highways” and later in Barack Obama’s speeches about smart cities. The foreseeable consequences of this digital boom, such as waste, energy consumption and dependence, were overlooked since they were at odds with the idea of progress.

Today, however, many reports have sounded the alarm for these issues: too much waste, poor waste treatment, skyrocketing energy consumption (the most alarming scenarios go so far as to predict that digital energy consumption could reach 50% of total energy consumption by 2030), dependence on rare materials etc.

These aspects were already pointed out two decades ago, by both the Council of Europe and the European Parliament. But public authorities were more concerned about falling behind than they were about the possible “technological dead end” they were headed for.

Means before the End

This concept of a “technological dead end” is mentioned in the Villani report:

“The production of digital equipment consumes a great amount of rare, critical metals that are not easily recyclable and with limited accessible reserves (15 years for Indium, the consumption of which has multiplied sevenfold in 10 years), which could lead to a technological dead end if the growing demand does do not slow down.” (p. 123)

The title of the report is worth noting: it is about providing meaning for, in other words determining how to use, AI, rather than first asking what kind of a world we would like to live in (a question of meaning) and then determining the most suitable tools to achieve this, a process whereby AI may not actually be a beneficial option.

There is little difference in “real” socialist societies. In the USSR of the 1970s a request for a telephone could take years to be fulfilled and cars were known for their poor quality. But in other fields (military, aeronautics etc.), industry was thriving. In some sectors such as healthcare, needs were sometimes better controlled in socialist societies. Life expectancy in Cuba is higher than that of United States’ citizens overall, and much higher than the life expectancy of the percentage of the American population whose skin is darker than others.

People do not fall in “love” with a growth rate

To make sure that people internalize these ideas, the race for progress relies on a vast undertaking to arouse desire, reenacting the primitive potlach (a practice in which individuals give and spend to increase prestige, according to anthropologist Marcel Mauss) on a greater scale than ever before. But it has implications that are not signs of progress: reduced food supply, ecological destruction (especially genetic) on an unprecedented scale etc.

These “negative aspects” are questioned, viewed with caution, and pushed to the background in decision-making. Meanwhile, investment is racing to keep up with dreams of grandeur and accumulation. This is illustrated by Tesla’s enormous market capitalization, despite the fact that it has never earned money and is lagging in many forecasts. Similarly, the fantastical prophecies of the controversial Ray Kurzweil, Google engineer and “futurologist,” have garnered significant media attention.

It is also significant that faced with these threats, the solution is often seen as more capitalism rather than less. The Breakthrough Institute explains that in order to protect the biosphere from growing consumption, we must tap into the earth’s resources in unprecedented quantities — and recycle, of course. “The economy of promises” is in full swing but in a single direction: toward capitalistic accumulation. Any signal to the contrary is viewed with suspicion. Messages about food supply or inequality are drowned out by the overall constant celebration of the system, as Jean Baudrillard suggested as early as the 1970s.

Refusing means regressing

Capitalism leads to a concentration of resources in an ever-smaller number of hands. As such, whatever the issue in question, it is always the same stakeholders who have the resources to present their solutions. Organizations proposing alternatives to the solutions provided by major firms are hindered by regulations that are poorly suited to their specific characteristics, and do not have the resources to send personnel to attend all the meetings that could help change this situation.

The result: views of progress that do not fall into the “always more” school of thinking are discredited as representing regress rather than progress. This is the “we aren’t going back to candles” argument heard so often despite the fact that it is unfounded since hardly anyone supports such an idea. Its only purpose is to undermine the adversary’s credibility.

Technology, a new divinity

And yet, soil insulates better than concrete, the huge quantity of medications consumed has a very limited effect relative to cost, nanotechnologies (including the star product, carbon nanotubes) and biotechnologies (two major forms of GMOs in 25 years, while gene therapy is still awaited) have not led to a revolution in terms of well-being.

“Not yet,” respond partisans of “progress,” for whom the slightest doubt is an act of sacrilege. Jacques Ellul is among those who have gone the furthest in theorizing that technology has become sacred. But partisans of progress only consent to discussing different ways of adopting and using technology, certainly not the idea of setting technology aside (or scrapping it) in favor of other possibilities and ways of seeing things.

They have 150 years of experience in “developed” countries on their side. After all, the same warnings were made in the past and “technology has managed.” Why would it be any different tomorrow? Yet certain warnings becoming realities: in her seminal work Silent Spring, published in 1962, biologist Rachel Carson announced the possible disappearance of insects and birds. 56 years later, this has almost come to pass.

Most importantly, the conditions do not allow for the emergence of real power for the (citizen)- consumer. Major firms spent 30 billion in 2017 to convince the French to use their products, according to Ademe who spent 16 million for this purpose in 2016,

“Communication with the public and professionals is crucial in order to change behavior and accelerate the energy and ecological transition in French society.”

Decisions made at the end of citizens’ conferences show, however, that when informed, citizens make very different choices than industries. Ironically, after establishing a system that incites the massive adoption of products which have become a part of everyday consumption, decision-makers now accuse the consumers when they are worried about threats. This subordinate position of the consumer, in all cases, clearly demonstrates in which direction power flows: from high to low.

Fabrice Flipo, Professor of social and political philosophy, epistemology and the history of science and technology, Institut Mines-Telecom Business School

The original version of this article (in French) was published in The Conversation.

OMNI: transferring social sciences and humanities to the digital society

2 October 2018/0 Comments/in Carnot EN, Digital, Economics and Society, In the News, Uncategorized/by I'MTech

I’MTech is dedicating a series of articles to success stories from research partnerships supported by the Télécom & Société Numérique Carnot Institute (TSN), to which IMT Atlantique belongs.

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Technology transfer also exists in social sciences and the humanities! The OMNI platform in Brittany proves this by placing its research activities at the service of organizations. Attached to the Breton scientific interest group called M@rsouin (which IMT Atlantique manages), it brings together researchers and professionals to study the impact of digital technology on society. The relevance of the structure’s approach has earned it a place within the “technology platform” offering of the Télécom & Société Numérique Carnot Institute **(see insert at the end of the article)**. Nicolas Jullien, a researcher in Digital Economy at IMT Atlantique and Manager of OMNI, tells us more about the way in which organizations and researchers collaborate on topics at the interface between digital technology and society.

What is the role of the OMNI platform?

Nicolas Jullien: Structurally, OMNI is attached to the scientific interest group called M@rsouin, comprised of four universities and graduate schools in Brittany and, recently, three universities in Pays de la Loire*. For the past 15 years, this network has served the regional objective of having a research and study system on ICT, the internet and, more generally, what is today referred to as digital technology. OMNI is the research network’s tool for proposing studies on the impact of digital technology on society. The platform brings together practitioners and researchers and analyzes major questions that public or private organizations may have. It then sets up programs to collect and evaluate information to answer these questions. According to the needs, we can carry out questionnaire surveys – quantitative studies – or interview surveys – which are more qualitative. We also guarantee the confidentiality of responses, which is obviously important in the context of the GDPR. It is first and foremost a guarantee of neutrality between the player who wishes to collect information and the responding actors.

So is OMNI a platform for making connections and structuring research?

NJ: Yes. In fact, OMNI has existed for as long as M@rsouin, and corresponds to the part just before the research phase itself. If an organization has questions about digital technology and its impact and wants to work with the researchers at M@rsouin to collect and analyze information to provide answers, it goes through OMNI. We help establish the problem and express or even identify needs. We then investigate whether there is a real interest for research on the issue. If this is the case, we mobilize researchers at M@rsouin to define the questions and the most suitable protocol for the collection of information, and we carry out the collection and analysis.

What scientific skills can you count on?

NJ: M@rsouin has more than 200 researchers in social sciences and humanities. Topics of study range from e-government to e-education via social inclusion, employment, consumption, economic models, operation of organizations and work. The disciplines are highly varied and allow us to have a very comprehensive approach to the impact of digital technology on an organization, population or territory… We have researchers in education sciences, ergonomics, cognitive or social psychology, political science and, of course, economists and sociologists. But we also have disciplines which would perhaps be less expected by the general public, but which are equally important in the study of digital technology and its impacts. These include geography, urban planning, management sciences and legal expertise, which has been closely involved since the development of wide-scale awareness of the importance of personal data.

The connection between digital technology and geography may seem surprising. What is a geographer’s contribution, for example, to the question of digital technology?

NJ: One of the questions raised by digital technology is that of access to online resources. Geographers are specifically interested in the relationship between people and their resources and territory. Incorporating geography allows us to study the link between territory and the consumption of digital resources, or even to more radically question the pertinence of physical territory in studies on internet influence. It is also a discipline that allows us to examine certain factors favoring innovation. Can we innovate everywhere in France? What influence does an urban or rural territory have on innovation? These are questions asked in particular by chambers of commerce and industry, regional authorities or organizations such as FrenchTech.

Why do these organizations come to see you? What are they looking for in a partnership with a scientific interest group?

NJ: I would say that these partners are looking for a new perspective. They want new questions or a specialist point of view or expert assessment in complex areas. By working with researchers, they are forced to define their problem clearly and not necessarily seek answers straight away. We are able to give them the breathing space they need. But we can only do so if our researchers can make proposals and be involved in partners’ problems. We propose services, but are not a consultancy agency: our goal remains to offer the added value of research.

Can you give an example of a partnership?

NJ: In 2010 we began a partnership with SystemGIE, a company which acts as an intermediary between large businesses and small suppliers. It manages the insertion of these suppliers in the purchasing or production procedures of large clients. It is a fairly tricky positioning: it is necessary to understand the strategy of suppliers and large companies and the tools and processes to put in place… We supported SystemGIE in the definition of its atypical economic model. It is a matter of applied research because we try to understand where the value lies and the role of digital technology in structuring these operators. This is an example of a partnership with a company. But our biggest partner remains the Brittany Regional Council. We have just finished a survey with it on craftspeople. The following questions were asked: how do craftspeople use digital technology? How does their online presence affect their activity?

How does the Carnot label help OMNI?

NJ: First and foremost it is a recognition of our expertise and relevance for organizations. It also provides better visibility at a national institutional level, allowing us to further partnerships with public organizations across France, as well as providing better visibility among private actors. This will allow us to develop new, nationwide partnerships with companies on the subject of the digitization of society and the industry of the future.

* The members of M@rsouin are: Université de Bretagne Occidentale, Université de Rennes 1, Université de Rennes 2, Université de Bretagne Sud, IMT Atlantique, ENSAI, ESPE de Bretagne, Sciences Po Rennes, Université d’Angers, Université du Mans, Université de Nantes.

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A guarantee of excellence in partnership-based research since 2006

The Télécom & Société Numérique Carnot Institute (TSN) has been partnering with companies since 2006 to research developments in digital innovations. With over 1,700 researchers and 50 technology platforms, it offers cutting-edge research aimed at meeting the complex technological challenges posed by digital, energy and industrial transitions currently underway in in the French manufacturing industry. It focuses on the following topics: industry of the future, connected objects and networks, sustainable cities, transport, health and safety.

The institute encompasses Télécom ParisTech, IMT Atlantique, Télécom SudParis, Institut Mines-Télécom Business School, Eurecom, Télécom Physique Strasbourg and Télécom Saint-Étienne, École Polytechnique (Lix and CMAP laboratories), Strate École de Design and Femto Engineering.

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GDPR: towards values and policies

27 September 2018/0 Comments/in Digital, Economics and Society, In the News/by I'MTech

On May 25th, the GDPR came into effect. This new regulation requires administrations and companies in the 27 EU countries to comply with the law on the protection of personal data. Since its creation in 2013, the IMT Research Chair Values and Policies of Personal Information (CVPIP) aims to help businesses, citizens and public authorities in their reflections on the collection, use and the sharing of personal information. In this article, Claire Levallois-Barth, coordinator of the Chair, and Ivan Meseguer, co-founder, return to the geopolitical and economic context in which the GDPR is part and the obstacles that remain to its effective implementation.

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The original version of this article was published on the VPIP Chair website. This Chair brings together researchers from Télécom ParisTech, Télécom SudParis and Institut Mines Télécom Business School, and is supported by the Fondation Mines-Télécom.

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We were all expecting it.

The General Data Protection Regulation (GDPR)^[1] came into force on May 25, 2018. This milestone gave rise to numerous reactions and events on the part of companies and institutions. As the Belgian Data Protection Authority put it, there is undoubtedly “a new wind coming, not a hurricane!” – which seems to have blown all the way across the Atlantic Ocean, as The Washington Post pointed out the creation of a “de-facto global standard that gives Americans new protections and the nation’s technology companies new headaches”.^[2]

Not only companies are having such “headaches”; EU Member States are also facing them as they are required to implement the regulation. France,^[3] Austria, Denmark, Germany, Ireland, Italy, the Netherlands, Poland, the United Kingdom and Sweden have already updated their national general law in order to align it with the GDPR; but to this day, Belgium, the Czech Republic, Finland, Greece, Hungary and Spain are still submitting draft implementation acts.

And this is despite the provisions and timeline of the bill having been officially laid down as early as May 4, 2016.

The same actually goes for French authorities, as some of them have also asked for extra time. Indeed, shortly before GDPR took effect, local authorities notified they weren’t ready for the Regulation, even though they had been aware of the deadline since 2016, just like everyone else.

Sixty French senators further threatened to refer the matter to the Constitutional Council, and then actually did, requesting a derogation period.

In schools and universities, GDPR is getting increasingly significant, even critical, to ensure both children’s and teachers’ privacy.

The issue of social uses and practices being conditioned as early as in primary school has been studied by the Chair Values and Policies of Personal Information (CVPIP) for many years now, and is well exemplified by major use cases such as the rise of smart toys and the obvious and increasing involvement of U.S. tech giants in the education sector.

As if that wasn’t enough, the geographical and economic context of the GDPR is now also an issue. Indeed, if nothing is done to clarify the situation, GDPR credibility might soon be questioned by two major problems:

U.S. non-compliance with the EU-U.S. Privacy Shield agreement, which was especially exposed by the Civil Liberties Committee (LIBE) of the European Parliament;^[4]
The signing into law on March 23, 2018 – i.e. precisely before GDPR enforcement – of the Clarifying Lawful Overseas Use of Data (CLOUD Act) by Donald Trump.

The CLOUD Act unambiguously authorises U.S. authorities to access user data stored outside the United States by U.S. companies. At first glance, this isn’t sending a positive and reassuring message as to the U.S.’s readiness to simply comply with European rules when it comes to personal data.

Besides, we obviously should not forget the Cambridge Analytica scandal, which led to multiple hearings of Mark Zuckerberg by astounded U.S. and EU institutions, despite Facebook having announced its compliance with GDPR through an update of its forms.

None Of Your Business (Noyb), the non-profit organisation founded by Austrian lawyer Max Schrems, filed four complaints against tech giants, including Facebook, over non-compliance with the notion of consent. These complaints reveal how hard it is to protect the EU model in such a global and digital economy.^[5]

Such truly European model, which is related neither to surveillance capitalism nor to dictatorial surveillance, is based on compliance with the values shared by our Member States in their common pact. We should refer to Article 2 of the Treaty on European Union for as long as needed:

“The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail”.

Furthermore, Article 7 of the Charter of Fundamental Rights of the European Union clearly and explicitly provides that “everyone has the right to respect for his or her private and family life, home and communications”.

Such core values are not only reflected by GDPR, but by the whole body of legislation under construction it is part of, which includes:

The Draft ePrivacy Regulation, which aims to extend the scope of current Directive 2002/58/EC to over-the-top (OTT) services such as WhatsApp and Skype as well as to metadata; ^[6]
The draft Regulation on the free flow of non-personal data,^[7] which has generated heated debates over the definitions of “non-personal data” and “common data spaces” (personal and non-personal data)^[8] and which, according to European MP Anna Maria Corazza Bildt, aims to establish the free flow of data as the fifth freedom in the EU’s single market.<^[9]

Besides, the framework on cybersecurity is currently being reviewed in order to implement a proper EU policy that respects citizens’privacy and personal data as well as EU values. 2019 will undoubtedly be the year of the cyberAct.^[10]

A proper European model, respectful of EU values, is therefore under construction.

It is already inspiring and giving food for thought to other countries and regions of the world, including the United States, land of the largest tech giants.

In California, the U.S.’s most populous state, no less than 629,000 people signed the petition that led Californian MPs to pass the California Consumer Privacy Act on June 28, 2018. ^[11]

The Act, which takes effect on January 1, 2020, broadens the definition of “personal information” by including tracking data and login details, and contains provisions similar to the GDPR’s on:

Individuals’ ability to control their personal information, with new rights regarding transparency, access, portability, objection, deletion and choice of the collected information;
The protection of minors, with the prohibition from selling or disclosing the personal information of a consumer under 16 years of age, “unless affirmatively authorised”;
The violation of personal data, with the right to institute a civil action against a company in the event of a data theft caused by the absence of appropriate security procedures.

California, the nation’s leading state in privacy protection, is setting the scene for major changes in the way companies interact with their customers. The Act, the strictest ever passed in the U.S., has inevitably been criticized by the biggest Silicon Valley tech companies, who are already asking for a relaxation of the legislation.

Let us end with an amusing twist by giving the last word to the former American president (yet not the least among them), Barack Obama. In a speech addressing the people of Europe, in Hanover, Germany, in 2016, he proclaimed:

“Europeans, like Americans, cherish your privacy. And many are skeptical about governments collecting and sharing information, for good reason. That skepticism is healthy. Germans remember their history of government surveillance – so do Americans, by the way, particularly those who were fighting on behalf of civil rights.

So it’s part of our democracies to want to make sure our governments are accountable”^[12]

Also read on I’MTech

Personal data: How the GDPR is changing the game in Europe

Sociology and philosophy combine to offer a better understanding of the digital metamorphosis

25 September 2018/0 Comments/in Digital, Economics and Society, In the News/by I'MTech

Intellectual, professional, political, personal, private: every aspect of our lives is affected by technological developments that are transforming our society in a profound way. These changes raise specific challenges that require a connection between the empirical approaches of sociology and philosophical questioning. Pierre-Antoine Chardel, a philosopher, social science researcher and specialist in ethics at Institut Mines-Telecom Business School, answers our questions about socio-philosophy and the opportunities this field opens up for an analysis of the digital metamorphosis.

In what ways do the current issues surrounding the deployment of technology require an analytical approach combining the social sciences and philosophy?

The major philosophical questions about a society’s development, and specifically the technological aspect, must consider the social, economic and cultural contexts in which the technology exists. For example, artificial intelligence technologies do not raise the same issues when used for chatbots as they do when used for personal assistance robots; and they are not perceived the same way in different countries and cultural contexts. The sociological approach, and the field studies it involves, urges us to closely consider the contexts which are constantly redefining human-machine interactions.

Sociology is complemented by a philosophical approach that helps to challenge the meaning of our political, social and industrial realities in light of the lifestyles they produce (in both the medium and long-term). And the deployment of technology raises fundamental philosophical issues: to what extent does it support the development of new horizons of meaning and how does it enrich (or weaken) community life? More generally, what kind future do we hope our technological societies will have?

For several years now, I have been exploring socio-philosophical perspectives with other researchers in the context of the LASCO IdeaLab, in collaboration with the Institut Interdisciplinaire d’Anthropologie du Contemporain, a CNRS/EHESS joint research unit, or with the Chair on Values and Policies of Personal Information. These perspectives offer a way to anchor issues related to changes in subjectivation processes, public spheres and social imagery in very specific sociological environments. The idea is not to see the technology simply as an object in itself, but to endeavor to place it in the social, economic, political and industrial environments where it is being deployed. Our goal is to remain attentive to what is happening in our rapidly-changing world, which continues to create significant tension and contradictions. At the same time, in society we see a high demand for reflexivity and a need to distance ourselves from technology

What form can this demand for meaning take, and how can it be described from a socio-philosophical point of view?

This demand for meaning can be perceived through phenomena which reveal people’s difficulties in finding their way in a world that is increasingly structured with the constant pressure of time. In this regard, the burn-out phenomenon is very revealing, pointing to a world that creates patterns of constant mobilization. This phenomenon is only intensified through digital interactions when they are not viewed with a critical approach. We therefore witness situations of mental burn-out. Just like natural resources, human and cognitive resources are not inexhaustible. This observation coincides with a desire to distance ourselves from technology, which leads to the following questions: How can we care for individuals in the midst of the multitude of interactions that are made possible in our modern-day societies? How can we support more reasonable and peaceful technological practices?

You say “digital metamorphosis” when referring to the deployment of technology in our societies. What exactly does this idea of metamorphosis mean?

We are currently witnessing processes of metamorphosis at work in our societies. From a philosophical point of view, the term metamorphosis refers to the idea that individually and collectively we are working to build who we are, as we accept to be constantly reinvented, by using a creative approach in developing our identities. Today, we no longer develop our subjectivity based on stable criteria, but based on opportunities which have increased with digitization. This has increased the different ways we exist in the world, our ways of presenting ourselves, by using online networks, for example. Think of all the different identities that we can have on social networks and the subjectivation processes that these processes create. On the other hand, the hyper-memory that makes digital technology possible tends to freeze the representation we have of a person. The question is, can people be reduced to the data they produce? Are we reducible to our digital traces? What do they really say about us?

What other major phenomena accompany this digital metamorphosis?

Another phenomenon produced by the digital metamorphosis is that of transparency. As Michel Foucault said, the modern man has become a “confessing animal”. We can easily pursue this same reflection today in considering how we now live in societies where all of our activities could potentially be tracked. This transparency of every moment raises very significant questions from a socio-philosophical and ethical point of view related to the right to be forgotten and the need for secrecy.

But does secrecy still mean anything today? Here we realize that certain categories of thought must be called into question in order to change the established conceptual coordinates: what does the right to privacy and to secrecy really mean when all of our technology makes most of our activities transparent, with our voluntary participation? This area involves a whole host of socio-philosophical questions. Another important issue is the need to emphasize that we are still very ethno-centric in our understanding of our technological environments. We must therefore accept the challenge of coming into close contact with different cultural contexts in order to open up our perspectives of interpretation, with the goal of decentering our perception of the problems as much as possible.

How can the viewpoints of different cultures enrich the way we see the “digital metamorphosis”?

The contexts in which different cultures have taken ownership of technology varies greatly based on the country’s history. For example, in former East Germany, privacy issues are addressed very differently than they are in North American, which has not suffered from totalitarian regimes. On a completely different note, the perception we have of robotics in Western culture is very different from the prevalent perception in Japan. These concepts are not foreign to Buddhist and Shinto traditions, since they believe that objects can have a soul. The way people relate to innovations in the field of robotics is therefore very different depending on the cultural context and it involves unique ethical issues.

In this sense, a major principle in our seminar devoted to “Present day socio-philosophy” is to emphasize that the complexities of today’s world push us to question the way we can philosophically understand them while resisting the temptation to establish them within a system. Finally, most of the crises we face (whether economic, political or ecological) force us to think about the epistemological and methodological issues surrounding our theoretical practices in order to question the foundations of these processes and their presuppositions. We therefore wish to emphasize that, more than ever, philosophy must be conducted in close proximity to human affairs, by creating a wealth of exchanges with the social sciences (socio-anthropology, socio-history and socio-economy in particular). This theoretical and practical initiative corresponds to a strong demand from students and young researchers as well as many in the corporate world.

Social and solidarity economy in light of corporate reform

17 September 2018/0 Comments/in Economics and Society, In the News/by I'MTech

Mélissa Boudes, Institut Mines-Telecom Business School
This article was co-authored by Quentin Renoul, entrepreneur.

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[dropcap]T[/dropcap]he draft PACTE law (Action Plan for Business Growth and Transformation), presented by President Emmanuel Macron’s government, seeks to change the way corporate stakeholders (entrepreneurs, funders, managers, workers, customers, etc.) see the company’s role in society. The goal is to rethink what companies could be—or should be—in light of the societal, economic, political and ecological changes that have been happening in recent years.

More importantly, this corporate reform seems to announce the end of the dichotomy between “traditional” companies and social and solidarity economy (SSE) companies. Four years after the law on social and solidarity economy, what can we learn by comparing the two laws? What do they show us about new business models? What kind of picture do they paint of the firms of the future?

Social and Solidarity Economy Companies

Behind the SSE label, there lies a wide variety of companies with old and diverse historical foundations. They were united in 1980 under France’s National Liaison Committee for Mutual, Cooperative and Associative Activities, which was governed by a charter with seven principles:

One person, one voice (in the General Assembly), regardless of the individual’s level of participation in the company’s capital;
Voluntary membership and responsibility;
Dual capacity: the company belongs to those who produce its value;
Equality and freedom;
Limited profit: surpluses are reintegrated into the project;
Empowerment: research and experimentation;
People-oriented economic activities.

These principles are supposed to be guaranteed by the articles of incorporation adopted by these organizations–associations, cooperatives, mutual societies and their foundations–but also by the practices and tools they employ. However, under the effect of competition and the decline in public support, SSE companies have been pushed to adopt the same practices and management tools as for-profit companies: management by objectives, financial reporting, etc.

These tools and practices run counter to SSE practices, so much so that adopting them makes it more difficult for all stakeholders (employees of these organizations, consumers of the products and services that they produce, etc.) to distinguish between SSE companies and traditional companies. In fact, though the public is seldom aware of this, some major brands are actually SSE companies: Maif (mutual fund), Intersport (retail cooperative), Crédit Mutuel (cooperative bank), Magasins U (retail cooperative), the Up–Chèque déjeuner group (workers’ cooperative).

SSE Law of 2014: expanded to include commercial companies

In the context of this complex landscape, new companies have emerged in recent years called “social” companies. These companies pursue a social purpose, but with the same legal form as “traditional” commercial companies (public limited company, simplified joint-stock company, etc.). For example, DreamAct (a platform that promotes “responsible” consumption with its city guide and e-shop) or La Ruche qui dit oui (English: The Food Assembly, which facilitates direct sales between producers and consumers) have opted for the simplified joint-stock company status.

Despite some protests, the SSE Law, passed by French Parliament on 31 July 2014 allowed these companies, which are both commercial and social, to be included in the SSE family. Still, certain conditions apply: they must comply with SSE principles, in other words, pursue an aim other than sharing profits, have democratic governance, create indivisible reserves, and use the majority of their profits to maintain or develop the company.

Originally designed to bring wider recognition to the SSE, the law has in fact further exacerbated tensions between social companies and SSE companies, further blurring the lines of company classifications.

2018 Corporate Reform: integrating CSR criteria

The current draft corporate reform is based on criticism of the financialization of companies, which was particularly brought to light following the 2008 financial crisis. It seeks to respond to new social and environmental expectations for companies, at a time when public authorities and civil society appear powerless when it comes to financial issues. This reform seems to encourage companies to adopt these criteria of corporate social responsibility (CSR).

The recommendations of the Notat-Sénard report on “the collective interest company”, which were added to the draft PACTE law on 9 March 2018, in some ways provide an answer to company stakeholders’ growing search for meaning. Measures such as considering social and environmental issues, reflecting on companies’ “raison d’être”, and increasing the representation of employees in the board of directors should help to heal the rift between companies and society as a whole by aligning their objectives with common goals that benefit everyone.

The end of dichotomies

These two reforms offer senior managers and entrepreneurs a wider range of options. The old dichotomies that emerged with the industrial revolution (decision-making bosses/decision-implementing employees, lucrative company/charitable association) are slowly fading away to make way for more diverse, hybrid organizations.

Theoretically, we could map the entrepreneurial landscape by dividing it into two different areas. This offers a clearer understanding of the logic behind the legislation from 2014 and 2018 and its potential impacts on companies. The first area is governance, or the distribution of decision-making power.

The second area is the business model, or the methods for mobilizing resources, using them and distributing the value the company creates.

The governance area can be subdivided into two sections. On the one hand there are traditional commercial companies, with a shareholder governance in which the decision-making power is by and large concentrated in the hands of investors. On the other hand, there are SSE companies, as they define themselves in their charter from 1980, with a democratic governance in which the decision-making power belongs to the participating members (employees, volunteers, consumers, producers). The business aspect can also be subdivided into two models: the profit model, focused on maximizing profit, and the limited profit model, in which surpluses are reintegrated into the project or are distributed between participating members.

While the historical distinction between “traditional” companies and SSE companies consisted in a shareholder governance with a for-profit business model versus democratic governance with a limited-profit business model, this rift has greatly diminished in recent years due to changes in practices (CSR, social companies) which have now been recognized and even encouraged by the SSE law and the draft PACTE law.

In 2014, the SSE law included commercial companies which are considered social companies in the SSE category, by encouraging them to adopt democratic governance and limit their profit-making by reintegrating their surpluses into the project and creating indivisible reserves. The draft PACTE law seeks to encourage companies to open up their governance to include employees in decision-making. It also calls for business models to be expanded to integrate social and environmental issues.

A move toward hybrid companies, “creators of meaning”?

These two reforms invite us to change the way we see the company. They aim to support and encourage changes in entrepreneurial behavior by providing tools to create new governance and business models for companies. They encourage the creation and development of what could be considered “hybrid” companies in comparison with the historical models.

Many companies have already combined the two traditional views of the company to accomplish their goals. One prime example is companies for integration through economic activity. These groups strive to reintegrate individuals who are farthest removed from employment through training and appropriate jobs. They often combine different legal statuses to bring together a profitable business activity and social purpose. Although the wages of the individuals who are being reintegrated are co-financed by the public authorities, the integration companies must find opportunities and generate enough income to create jobs and develop the business project and make it sustainable. Réseau Cocagne, for example, proposes organic food baskets produced by individuals integrating the workplace. It is an association under the French law of 1901 and it created a private company limited by shares which is supported by an endowment fund to improve its access to funding. In 2016, the group had 4,320 employees integrating the workforce, 815 permanent employees, 1,800 volunteers and administrators and 20,500 consumer members.

Could what we are witnessing be the development of what François Rousseau called “creators of meaning”? Companies “on a quest to regain the meaning behind their actions and the social calling motivating their project”.

Having reestablished their roots in society, these companies need specific management tools to be developed, “meaning-management tools”, which enable them to reach the economic, social and environmental goals they have set. The SSE law and draft PACTE law pave the way for developing such tools and practices. Now it is up to entrepreneurs, managers, workers and funders to create, develop, and make them meaningful.

Mélissa Boudes, Associate Professor of Management, Institut Mines-Telecom Business School

The original version of this article (in French) was published on The Conversation.

GDPR: managing consent with the blockchain?

29 August 2018/1 Comment/in Digital, Economics and Society, In the News/by I'MTech

Blockchain and GDPR: two of the most-discussed keywords in the digital sector in recent months and years. At Télécom SudParis, Maryline Laurent has decided to bring the two together. Her research focuses on using the blockchain to manage consent to personal data processing.

The GDPR has come into force at last! Six years have gone by since the European Commission first proposed reviewing the personal data protection rules. The European regulation, which came into force in April 2016, was closely studied by companies for over two years in order to ensure compliance by the 25 May 2018 deadline. Of the 99 articles that make up the GDPR, the seventh is especially important for customers and users of digital services. It specifies that any request for consent “must be presented in a manner which is clearly distinguishable from the other matters, in an intelligigble and easily accessible form, using clear and plain language.” Moreover, any company (known as a data controller) responsible for processing customers’ personal data “shall be able to demonstrate that consent was given by the data subject to the processing of their personal data.”

Although these principles seem straightforward, they introduce significant constraints for companies. Fulfilling both of these principles (transparency and accounting) is not an easy task. Maryline Laurent, a researcher at Télécom SudParis with network security expertise, is tackling this problem. As part of her work for IMT’s Personal Data Values and Policies Chair — of which she is the co-founder — she has worked on a solution based on the blockchain in a B2C environment¹. The approach relies on smart contracts recorded in public blockchains such as Ethereum.

Maryline Laurent describes the beginning of the consent process that she and her team have designed between a customer and a service provider: “The customer contacts the company through and authenticated channel and receives a request from the service provider containing the elements of consent that shall be proportionate to the provided service.” Based on this request, customers can prepare a smart contract to specify information for which they agree to authorize data processing. “They then create this contract in the blockchain, which notifies the service provider of the arrival of a new consent,” continues the researcher. The company verifies that this corresponds to its expectations and signs the contract. In this way, the fact that the two parties have approved the contract is permanently recorded in a block of the chain. Once the customer has made sure that everything has been properly carried out, he may provide his data. All subsequent processing of this data will also be recorded in the blockchain by the service provider.

A smart contract approved by the Data Controller and User to record consent in the blockchain

A smart contract approved by the Data Controller and User to record consent in the blockchainSuch a solution allows users to understand what they have consented to. Since they write the contract themselves, they have direct control over which uses of their data they accept. The process also ensures multiple levels of security. “We have added a cryptographic dimension specific to the work we are carrying out,” explains Maryline Laurent. When the smart contract is generated, it is accompanied by some cryptographic material that makes it appear to the public as user-independent. This makes it impossible to link the customer of the service and the contract recorded in the blockchain, which protects its interests.

Furthermore, personal data is never entered directly in the blockchain. To prevent the risk of identity theft, “a hash function is applied to personal data,” says the researcher. This function calculates a fingerprint over the data that makes it impossible to trace back. This hashed data is then recorded in the register, allowing customers to monitor the processing of their data without fear of an external attack.

Facilitating audits

This solution is not only advantageous for customers. Companies also benefit from the use of consent based on the blockchain. Due to the transparency of public registers and the unalterable time-stamped registration that defines the blockchain, service providers can comply with the auditing need. Article 24 of the GDPR requires the data controller to “implement appropriate technical and organizational measures to ensure and be able to demonstrate that the processing of personal data is performed in compliance with this Regulation.” In short, companies must be able to provide proof of compliance with consent requirements for their customers.

“There are two types of audits,” explains Maryline Laurent. “A private audit is carried out by a third-party organization that decides to verify a service provider’s compliance with the GDPR.” In this case, the company can provide the organization with all the consent documents recorded in the blockchain, along with the associated operations. A public audit, on the other hand, is carried out to ensure that there is sufficient transparency for anyone to verify that everything appears to be in compliance from the outside. “For security reasons, of course, the public only has a partial view, but that is enough to detect major irregularities,” says the Télécom SudParis researcher. For example, any user may ensure that once he/she has revoked consent, no further processing is performed on the data concerned.

In the solution studied by the researchers, customers are relatively familiar with the use of the blockchain. They are not necessarily experts, but must nevertheless use software that allows them to interface with the public register. The team is already working on blockchain solutions in which customers would be less involved. “Our new work² has been presented in San Francisco at the 2018 IEEE 11th Conference on Cloud Computing, which hold from 2 to 7 July 2018. It makes the customer peripheral to the process and instead involves two service providers in a B2B relationship,” explains Maryline Laurent. This system better fits a B2B relationship when a data controller outsources data to a data processor and enables consent transfer to the data processor. “Customers would no longer have any interaction with the blockchain, and would go through an intermediary that would take care of recording all the consent elements.”

Between applications for customers and those for companies, this work paves the way for using the blockchain for personal data protection. Although the GDPR has come into force, it will take several months for companies to become 100% compliant. Using the blockchain could therefore be a potential solution to consider. At Télécom SudParis, this work has contributed to “thinking about how the blockchain can be used in a new context, for the regulation,” and is backed up by the solution prototypes. Maryline Laurent’s goal is to continue this line of thinking by identifying how software can be used to automate the way GDPR is taken into account by companies.

¹N. Kaâniche, M. Laurent, “A blockchain-based data usage auditing architecture with enhanced privacy and availability“, The 16th IEEE International Symposium ong Network Computing and Applications, NCA 2017, ISBN: 978-1-5386-1465-5/17, Cambridge, MA USA, 30 Oct. 2017-1 Nov. 2017.

N. Kaâniche, M. Laurent, “BDUA: Blockchain-based Data Usage Auditing“, IEEE 11th Conference on Cloud Computing, San Francisco, CA, USA, 2-7 July 2018

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Facilitating audits

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