One of the most surprising things about Wikileaks is that it took this long for the massive shift to transparency to have an impact on this scale. The trend to transparency has long been evident, and sites to facilitate leaks have been around for many years now. The inevitability of a transparent world has long shaped my thinking about the future.
In my 2002 book Living Networks, the final chapter was on the future of a networked world. The second of my ten predictions was: Transparency will drive business and society.
Even before the book came out I spoke at KMWorld in Silicon Valley on Creating the Transparent Corporation, and given my background in capital markets, I have been interested in and written and spoken about transparency in investor relations from the 1990s with the rise of intangibles reporting and beyond to the impact of the rise of social media.
In both of these papers, as in a number of keynotes I gave earlier in the decade, I mentioning the now-defunct corporate leaks site internalmemos.com, which was launched in 2002, and had a significant impact for a number of companies (which are next target in line for Wikileaks and its peers).
The full text of my 2002 prediction on transparency from Living Networks is here, with the full book chapter embedded at the bottom of the post.
Before I go to the beach I check out the surf-cam, to see what the waves are like. When I receive a foreign currency payment through my bank, I can find out the spot interbank exchange rate and see exactly how much profit they are making on the trade. Vault.com gives me an insider’s view of the latest internal politics at my professional services and investment banking clients. I can look at the Greedy Associates feature on FindLaw.com to find out my lawyer’s likely paycheck, based on the firm, location, and his or her seniority.
Information flows freely. Everything is becoming visible. Trying to stop information from getting out is like trying to keep water from running down to the ocean during a rainstorm. As a direct result of surging connectivity, transparency is rapidly growing in every domain of business and society.
New business models will emerge to exploit this increasing transparency. I want to know the traffic conditions on all my possible routes, and exactly where someone has just vacated a parking spot near my destination. UK firm Applied Generics is using data from the movement of thousands of mobile phones as they register with the local cell station to generate an accurate and up-to-the-second picture of traffic delays. When I’m in the initial negotiation stages with a potential overseas partner, reports and perspectives from all the people they have dealt with will help me decide how to deal with them. There will be entire new industries in gathering, aggregating, and analyzing the vast universes of data that will be available. This will require new ways of working, and new pricing models for both raw data and the high-value outputs.
Transparency also impacts traditional businesses. If they want, companies can now usually get a very good idea of their suppliers’ profitability. As a result, many suppliers today are going with the trend rather than fighting it. Several investment banks give their clients the pricing models they use for complex derivatives, so their profit margins are known exactly. Many large firms have built sophisticated client profitability models, and some of these choose to show the results to selected clients, to help develop a more mutually beneficial relationship. Contract electronics manufacturers like Flextronics, Solectron, and Celestica usually provide their clients with minute details on their costings. Clients will increasingly expect to know their suppliers’ business in detail, and will strongly favor those who provide greater transparency.
David Brin evokes two worlds in his book The Transparent Society. In both, everything we do is visible. The difference between the two worlds is whether that transparency is one-way or two-way. We can take it for granted that government and big business will know almost everything about us. The question is whether individuals will be able look back, to make the institutions themselves visible and accountable. That will almost inevitably happen in time—the shift to transparency is unstoppable—however we all need to push hard so that it doesn’t take longer than it should. In every aspect of our lives, transparency will be a reality, and we will need to change the way we think and act to make it an opportunity rather than a liability.
The full impact of what a transparent world means is only now being made apparent by the Wikileaks phenomenon. Up until now the significant shifts in transparency have been less noticed in the midst of major technological and social changes, not least attitudes to openness.
As I said in my recent interview on ABC TV News about Wikileaks, “the gates are open never to be closed again.” This is by no means a blip in a more gradual trend to transparency, it is a discontinuous shift to a far more transparent world than any of us have ever experienced. We are just beginning to work out what that will look like, and how we can make it as positive a shift as possible.