Transcribed by Rey Smith
Jini Palmer: Welcome to Town Hall Seattle science series. On Friday, September 20th, 2019, Microsoft President Brad Smith took our Great Hall stage to talk with GeekWire‘s Civic Editor Monica Nickelsburg about the responsibilities behind creating technology that changes the world. Smith spoke about how information technology is both a powerful tool and a formidable weapon, and what can be done to manage tech’s relationship to inequality. He cited his new co-authored book with Carol Ann Browne, Tools and Weapons: The Promise and Peril of the Digital Age.
Monica Nicklesburg: Brad, thank you for being here tonight and I also want to thank all of you who chose to spend your Friday night with us. I think it’s going to be a very interesting conversation.
Brad Smith: Thank you. Thank you. Thanks everybody for coming.
MN: So we’re here to talk about Tools and Weapons, which you co-wrote with Carol Ann Browne, and there’s a lot to cover. You’ve been busy.
BS: We have been and the first thing I want to say is sort of the obvious: I didn’t write the book by myself and Carol Ann is sitting in the front row, so she should at least stand up.
MN: Yes. You’ve both been very busy. You have been all over the country giving speeches. And this is something that I’m pretty familiar with here in Seattle. I have to say covering events, I have wondered more than once if there are two of you? Maybe you have a time turner? Our Harry Potter fans in the audience might get that one. So the point is that there’s a lot to cover.
BS: There is.
MN: AI, data privacy, facial recognition, housing affordability. But I want to start at the beginning. The story starts in Quincy, Washington at—oh someone from Quincy out there, right on—well you probably know, there—I recently learned—are tons of enormous data centers there. And I have to admit, I have not spent a lot of time thinking about data centers. I kind of just assume that the apps on my phone arrive through some complicated code, a lot of magic. But I was really struck by your description of data centers, these massive fortresses that no one ever goes into and yet they power the modern economy. So the question is, why did you make me think about this crazy place? Why did we start in Quincy? Why did you start your book at a data center?
BS: We started in Quincy because I think you can’t really appreciate what the world has become unless you have the chance to go in a data center. And yet we really don’t have that opportunity there for very obvious reasons, not open to the public, so we thought, ‘Well, let’s take the reader on a tour of the data center.’ It is, I think probably the single most important part of the infrastructure of the 21st century. There were enormous—I mean, as we share in the book—our data center campus for Microsoft in Quincy has 20 buildings. Each building is as big as two football fields. Before you even get inside the building, you’re walking next to literally the largest electrical generators in the world because if it ever loses power from the electrical grid, the place needs to keep running. You walk into these rooms that have hundreds and hundreds of batteries and you might say, ‘Well, why do you need batteries?’ And as we explained, it’s really for two reasons. It’s so that the power remains smooth; you don’t want a surge. But also if it loses electricity from the grid, it takes maybe 40 seconds for a generator to start up. Well, you don’t want all the computers to go out and it just goes on from there, to the rooms where the computers themselves are located. And then you realize when you’re in these rooms where you just look down and these computers go beyond your line of sight—this is your data. And that thing that you did yesterday, that picture you snapped, or that email that you sent, it’s probably on one of these machines in your health records. And it’s like, ‘Oh my gosh, this is the cornerstone of every part of our lives and our economy.’
MN: These data centers create some really interesting privacy issues because throughout history, our most valuable personal information was stored in our homes and that’s how our laws are written, right? If a police officer comes into your home and takes your information, it’s hard to miss that. But now my most valuable personal information is stored in your data center. And I know this is an issue near and dear to Microsoft’s heart because law enforcement agencies have seen that as kind of an opportunity to gain information about your customers. You actually sued the government over this.
BS: We sued the government four times over these sets of issues in the Obama administration. And you know we talk about a couple of inflection points over the past decade, one being 2013 in the wake of the Snowden disclosures. And what you described Monica is obviously right. For literally centuries, if the government wanted to get your data, they had to come to your home or your office, and they had to get a search warrant and you actually had to let them in. You couldn’t say go away, but you knew they were there. You knew the government had your data. And as we share in the book—because we really try to use history in part to shine the light on the issues of today—literally going back to the 1760’s when these fundamental privacy rights were first established in London, you can fight back, you could go to court. But you can’t go to court if you don’t even know that the government came and got your data.
And it really changed, in our view, the role of a tech company, not just to store the data but to be the steward of the data, and to some really important degree to be the protector of people’s privacy rights.
MN: And it seemed like you and the federal government, or Microsoft and the federal government, were really at an impasse until president Obama came to Seattle and you happen to be at a cocktail hour. So how did that one drink with the president dramatically change things?
BS: It was very interesting. It was at the Westin Hotel, as we share in the book, and it was November of 2013. President Obama came to Seattle a number of times during his presidency, but as you may recall, if you remember or followed it closely, he didn’t do that many big public events. He kept coming to Seattle to basically raise money, it’s what politicians have to do to stay in office. And before this one there was a little grousing, like, ‘Gee, it’d be nice if he did a little bit more than have these fundraisers.’ So there was this cocktail party after a fundraiser and my wife and I, Kathy, who’s here, were at it, and I had the chance to talk with him. And I started asking him about some of the issues raised by, in effect, the Snowden disclosures. And we had one of our lawsuits going on and, as we share in the book, it was so interesting because before he came, the Justice Department sort of sent us a message: do not bring this lawsuit up with him. He is represented by counsel and when somebody is represented by counsel in the lawsuit, you have to go through the lawyers; you can’t talk to the president of the United States.
MN: Council being the Justice Department.
BS: Exactly. So I was talking to Valerie Jarrett, who worked for him, just before he walked in and I said, ‘You’d think it’d be okay if I asked him this other question that didn’t involve a lawsuit?’ And she was like, ‘Yeah, he’d probably be interested in that.’ But the most interesting part of the conversation was I was asking him about these other issues and then he turned to me and he said, ‘Now about that lawsuit,’ he said, ‘I heard that you all didn’t want to settle with us, that you think it’s better to be perceived as fighting the government.’ And I’m sitting there going, ‘Well, they never told me I couldn’t answer his question.’ So I said, ‘Actually we wanted to settle that case. And I actually think if we got the right people in the room, we could work this out.’ And so a month later, it’s the week before Christmas and we’re all at the West Wing in the White House as we tell this story, and he brought the tech leaders together and there was a really good meeting and it led to the first steps with some new policy from the White House that led to certain amounts of surveillance reform.
MN: I remember that meeting. I mean, all of the big CEOs in tech were there and it had some cover story, right? Some reason that they said that it was healthcare and IT or something? But you’re there to talk about this issue.
BS: Exactly. Yeah, I mean the title for the meeting I think was IT, health care and surveillance and it was like, ‘Yeah, we’re here for surveillance.’ So there was no doubt what we were there for.
MN: Would that meeting have happened if you hadn’t brought it up and taken a chance and answered his question at that cocktail hour in Seattle?
BS: Oftentimes people tell you things in life and you never know whether they’re just being nice, so we didn’t actually put this in the book, but there were folks at the White House that told us later that they decided to have that meeting, the president decided to have that meeting because of that conversation at the Westin hotel. So let’s just say it didn’t hurt.
MN: Some of the most revealing moments in the book are when you compare these issues that seem 100% tied to modern technologies to moments in history. And one that struck me is you actually make the case that the right to privacy, and violations of that right in the early 1700’s, actually set the American colonies on a core-stored independence, that it was fundamental to this country being established. So I wonder, why is privacy so core to our identity and then what does that say about our current moment with all of the privacy controversy that’s surrounding the tech industry?
BS: Well it’s such an interesting topic, and Carol Ann and I both really are interested in history, so at one level you read more and another level you do more research. And you know there are two very different historical episodes that we talk about in the book that speak to the different sides of privacy. One was what happened in the 1760’s, first in London, and then how it came across the Atlantic to Boston. And it was all about, could the government go in and seize your property, seize your documents? Which led to the Fourth Amendment in the United States, which protects against unreasonable searches and seizures. And it’s really been fundamental to American political culture that people are protected from the government itself, the citizen is protected from the state. And then in some ways there’s even this more dramatic aspect, certainly to us. And we share this story of—in January, 2018—being in Berlin and our local team at the end of a long day of meetings—and, you know, we’re jet lagged and it’s like, ‘Okay, it’s time to go to the airport.’—had arranged for one last stop and it was to visit a prison. Now when the local team wants to take you to a prison it makes you nervous, what’s going on here? It was unbelievable. I mean, for us it was just fascinating. And we described this: it was a prison at the Stasi in communist East Germany used from the end of World War II to the end of the Cold War. And there was a former prisoner who met us there. He had been taken there, he had spent 7 months there when he was only 24 years old in 1968, and his crime was creating with his friends a little piece of paper that had like three sentences on it. They were objecting to the Warsaw pact troops going into Prague and bringing the democratic freedoms of the Prague Spring to a close. And as we share in the book, it was so reminiscent to us of sending an email. I was a short message. They printed it out. They were handing it out on the streets and they were observed. And yet he and his friends were hauled off that night. No one told his parents where he had gone. He just disappeared for seven months. And throughout all those months, he was never allowed to see anyone else. They would just keep all the prisoners separate and he couldn’t speak to anyone else. He couldn’t read not a piece of paper for month after month after month. And the real message that our German team wanted us to see firsthand was why people in Germany feel so strongly about privacy. Because for them it was like, ‘Look, this is what happens when information is given to the government when it shouldn’t.’
And I think, to answer your question, the moment that today that it speaks to us about is frankly now with all of this data, everything we write, everything we do being stored in these data centers, if we cannot protect this data from any government—and not just our own government, but even more so with the governments around the world—you fundamentally put people’s liberty or even their lives at risk. And that’s just a very different world for technology in a very different level of responsibility for a tech company.
MN: I’m glad you brought up Germany. Germany and the European Union have a very different attitude toward regulating the technology industry, in part because of their values around privacy, but also I think it’s just a cultural difference. Have you ever heard the saying ‘American invents, trying to replicate, Europe regulates.’?
MN: So I wonder if there is correlation between the kind of lax regulatory environment in the United States and the fact that so many of the world’s biggest technology, most innovative technology companies are based here. I mean, if we move toward this more hands-on regulatory approach that Europe has, is there a risk that the next Microsoft or Google will be created in another country?
BS: It’s a great question, and look, at one level, everything in life has risk. And so you just have to think about what kind of future you want to create. Certainly, our book is in part designed to sort of level the playing field, make information about what’s happening in tech more accessible to people. But it’s also an argument. Our argument is that tech companies need to step up and assume more responsibility and the governments need to move faster. And there is now not just room for, but a need for more law and regulation. And you’re right, you know, we were in Silicon Valley on Monday and people say, ‘Aren’t you just gonna slow everybody down? Isn’t this bad for technology?’ And in part our messages, there was a time when tech was young, the companies were smaller. There was a time when some companies in Silicon Valley literally said quite proudly, ‘Move fast and break things’.
MN: Some companies, we can’t be sure which ones.
BS: And yet now we live in a very different time. Technology is ubiquitous and some people might argue that a lot of things have been broken. The argument we make, we describe it in the book, is that this is a time when we should actually work together and fix things. But even more than that, if you want to drive fast, it helps if the road has some guard rails. The guard rails will keep you on the road. And that’s what we think companies should do. Don’t necessarily go more slowly, but before you start moving down the highway, decide what kind of guard rails you’re going to build. And we talk a lot about the kinds of conversations that have taken place inside Microsoft. I think Satya Nadella, as we share, has been a huge proponent of principled leadership. Decide on the principals in advance, create the guard rails. And our message to the rest of the industry is, at the end of the day, you can go a lot farther if you don’t run off the road and you don’t end up in an accident. And so that is a plea to think about things in those terms.
MN: So Microsoft, I wouldn’t say it ran off the road, but maybe it kind of bumped into the guard rails in the late 1990’s, early 2000’s. You had antitrust investigations, it was really a decades long fight. And now some of your peers are in the hot seat in D.C and I was really struck during an antitrust hearing in July. Amazon, Apple, Facebook, Google, were they’re, Microsoft was not there, but the other four were, and our Congresswoman, Pramila Jayapal, said that the last government antitrust crackdown on a technology company on Microsoft paved the way for a whole host of new technology companies, including the ones in the room to flourish. And it kind of makes sense looking in the rear view mirror, but ultimately Microsoft was not broken up during that antitrust ordeal. And I just wonder if there’s a little bit of revisionist history going on here. I mean, was that an example of really effective antitrust enforcement or were you just so distracted by this whole situation that you missed the next big thing?
BS: Well, there are so many things that one can learn from and discuss with respect to Microsoft’s own antitrust experience. And like anything, it’s subject to competing interpretations and even at some level, imponderables; it’s not like there’s any certainty about certain things in life. But we do make the point, and we share in the book, some of the lessons that we think can be learned. We share what we had to go through at Microsoft; Bill Gates talks about it in the forward to the book. We talk about what it did to us at Microsoft and then perhaps, ultimately, for us. We had to look in the mirror and see not what we wanted to see, but what other people saw in us. I think there’s this really interesting way to think about things: when you get up and you look in the mirror, most people go, ‘Well, I like the way I look today.’ And then when you look at a photograph of yourself, you go, ‘I don’t like that picture of myself.’ There’s something about that that you go through in life—and it’s true for individuals, it’s true for companies—and we had to begin to understand the concerns that people had about us. We had to learn to compromise. Now, there’s a saying that sometimes in an antitrust case, the trial is the remedy. And it was a painful antitrust trial that Microsoft had to go through, and then there were years that followed. I myself would say that there were aspects of the ultimate remedy—there was a consent decree, there was a court order, there were European cases—that probably did create more opportunities for other companies. I would also say, and it was a distraction, a painful distraction. Almost by definition, anytime you spend your time doing one thing means you’re not spending that time doing something else. We had to spend a lot of time on antitrust issues. Would we have seen other things if we had not been spending our time on antitrust issues? Nobody can know for certain, but I’d much rather have time to look at these other things than be sitting and preparing senior business leaders for depositions. That’s not where you find the next leap in technology. It’s where you just meet other lawyers. I will always remember the day before Bill Gates testified in the trial in Washington, D.C and we were all preparing him for his witness testimony, and the last question that the people put to him was, ‘So Bill, if they ask you, how many lawyers did you meet with before this?’ He goes, ‘Okay, let me count here.’ And it took a while to count it up, all the lawyers in the room.
MN: So should the companies that are now being investigated, should they be broken up, do you think that they wield too much power?
BS: That’s an interesting question that we’ve been asked, I’ve been asked literally around the country and around the world as part of this. And I’m always quick to say that is not our argument. We are not advocating that other companies be broken up. I think that there is a room and a need for more law and more regulation. But I think fundamentally the most important thing is for people to start by asking, what problem do we want to solve? Once you have clarity about the problem, then you should talk about what is the best way to solve it. But I think if you really think about the problems that most people want to solve, I’m very skeptical that breaking up other companies is an effective way to solve it. And I also know—and we share in the editor notes, there’s a lot of stories that we embedded in the ed notes, even—if you want to spend 10 years watching the government in court, try to break up a company, because that’s probably how long it will take. And there’s just so many more effective and faster ways to solve problems that concern people.
MN: It’s really how you end up with a lot of lawyers.
MN: Well, it seems like Microsoft did learn some big lessons from that experience, and after the antitrust investigations were closed and you settled, you came out with these 12 principles on competition and an FTC commissioner actually said to you, ‘If you’d come out with these a decade ago, you could have avoided this whole headache.’ But it seems like you applied that because not that long after you came out with four principles on consumer privacy and that was well before Cambridge Analytica and the other scandals that have really plagued the industry. So I wonder, do you draw a straight line? Do you think that the antitrust ordeal in the late 90’s and early 2000’s is the reason that Microsoft has escaped this current tech lash?
BS: Not exclusively. I think that Microsoft today is a very diversified company with a lot of products, many of which are a very healthy number two: we’re the number two in cloud services, we’re the number two in gaming, we wish we could have become the number two in phones, we didn’t make it that we’re far. We have a very healthy diversified business, but we’re not the dominant search engine or the dominant online retail site or the dominant social media site in a way that people may not appreciate. We’re very healthy, probably number 2 in social media with LinkedIn—and it’s 650 million members—but governments tend to focus on the dominant number one, not the healthy number two: I think that’s the principle reason. Now, having said that, I do think that the things we learned, the approaches we’ve taken are not hurting. You know, they’re serving us well.
MN: You are number one on the stock market. I mean I haven’t checked in the last half hour, but pretty consistently you’re up there. And in the book you talk a lot about the ways that Microsoft has differentiated itself from the competitors, kind of taking the high road. And you know, that that might be laudable, but I have to ask the cynical question: is the current tech lash good for Microsoft because investors are skeptical of other companies but confident that you’re going to see your way through it?
BS: I don’t think so. We talk about this, not surprisingly, inside the company and the point I always make is: when Congress decided to regulate banks in the 1930’s, they did not create an exception for the banks they liked, they regulated all banks. So yeah, I think that the tech lash is fundamentally an issue for the entire tech sector. And if anything, I think there’s more likely to be broad technology regulation rather than narrow focuses on specific companies as this continues to unfold. And if anything, our book—we stated quite explicitly at the end—we make the case for the industry to change and we include ourselves in that. Just as Microsoft went through, as Bill puts it in the forward, a cultural change to adapt to these new responsibilities, we think the entire industry needs to go through a cultural change. And we’re not going to be exempt from it.
MN: It’s interesting that you say that cause it’s kind of analogous to what I hear a lot about Seattle versus Bellevue politics. They’re very different, but I often hear from folks in the technology industry that whether they’re in Redmond or Bellevue, they’re very concerned with what’s happening in Seattle because outside of the region, Seattle is the whole thing. Whatever’s happening in Seattle defines the region. And you’re saying that whatever happens broadly in the technology industry is gonna apply to Microsoft.
BS: I think that’s fair to say. Yeah.
MN: All right. Switching gears a little bit. There are a lot of people who are very frustrated with the technology industry because of the role that it plays in allowing Russian hackers to influence elections. Certainly here, but all over the world. And in the book you say that that anger is a little bit misplaced. I think you compare it to getting angry with the person who forgot to lock the door instead of the thief who broke in. And I hear you, I think that that’s a fair case to make. But in this case, the thief is an ocean away and there’s only so much we can do, and the person who let them in is right here in our backyard. So isn’t it the responsibility of the American technology industry to protect our democracy?
BS: Well, I think one should focus on both. And that’s really our message. Absolutely technology companies have a responsibility—arguably the first responsibility—to safeguard our platforms and to take actions to protect democracy. And we described—I think with as much candor as we could summon, which was a lot—what we’ve been working on literally since the weekend after the Democratic National Convention in 2016 to combat Russian hacking. We talk about the struggles we’ve had to go through even to not just fight back, but to talk publicly about what that means. But the other point we make is that you can’t expect, in our view, private companies to defend the country by themselves. And it’s very frustrating, as we share in the book, at least to us, that every time this topic comes up, frankly, both political parties turn on each other. In part, as we say, because so much of it seems to then be wrapped up in how people feel about the legitimacy of the 2016 presidential election and our messages—2020 is next year. We’re going to have another presidential election. We can’t afford to have our voting systems tampered with. We can’t afford to have this continuing disinformation mislead Americans. We can’t afford to have, next year, what happened in Houston three years ago where—it was amazing—you had people on opposite sides of the street protesting against each other. No one had a clue that the whole thing had been egged on by people in Russia; they got everybody riled up. You had neighbors yelling against neighbors. And we talk about the lessons of American history more broadly; our country has always been able to pull together in the face of these foreign threats and if we lose that ability, we actually put our fundamental democracy at risk.
MN: What’s really scary is that the message that any country that has an interest in seeing American democracy destabilized but particularly Russia, the message that they received is that this works. I mean, you can debate how effective the interference was, but the objectives that the American intelligence community said they were aiming to achieve were realized. And now everybody kind of knows that, the cat’s out of the bag. The tech industry and the U.S government at least know this is happening. But I wonder, are we more prepared for 2020 than we were in 2016? And what do you expect to happen?
BS: I think we’re better prepared, but the greatest danger is that we will simply be ready to fight the last war and not necessarily prepared for the next one. We’ve taken steps, as we described in the book, to provide greater services to candidates, to political parties, to think tanks and the like. There has been an effort to start to address disinformation. The greatest risk in our view is the threat to voting. Because just imagine what it would be like—if it’s next November—imagine someone is elected president based on winning three states where the votes are very close.
MN: 70,000 or so?
BS: Yeah, that’s what happened last time. So imagine that you have—doesn’t matter which candidate you’re thinking about—it’s a close race one, because of close votes in a few states and then imagine that it’s a week later, and then it comes out that the voting machines were tampered with by a foreign power and suddenly no one knows whether the votes that were counted were in fact the votes that were cast. What would that mean to our society? I mean, think about the polarization we’re living with. And if you then undermine the fundamental legitimacy of whoever claims to have had the most votes cast, how do we continue? And the time to start talking about this is not then, it is now, and it is to do everything we can every day between now and then to try to prevent that from happening.
MN: I think it’s important to note that it played a big role, but Russian interference is not the only trend that led to the surprises in 2016, and one part of the book that really struck me is the unintended consequences of this growing digital divide between urban and rural communities. In Seattle we live in a different world than rural communities in Eastern Washington or across the country. And the reality is that—what the FCC says about broadband connectivity, the census tracks that the FCC says have internet—many of them do not. And you say in the book that this bad data actually erodes trust in these communities in the federal government and even link it in some ways to president Trump’s election. So what’s the relationship there?
BS: One of our favorite stories in writing the book is the story about rural broadband because it starts by going to Eastern Washington. And we went to Ferry County, it is a county just west of Spokane. We went to Ferry County because it almost always has the highest unemployment rate in the state. It’s also a county that overwhelmingly voted for Donald Trump. And if you think about rural America as a place where people feel left behind, when you go to some of these rural communities, what you find is that people have been left behind. They feel left behind for good reason, and you see it in unemployment rates, you see it in opioid and related challenges. But the point that we make is that one of the reasons they’re left behind is because technology has left them behind.
The largest employer in Ferry County is the Cedar Creek Lumber Mill, it has about 175 employees. And until 2 months ago, this business with 175 people was having to run the entire company based on a single telephone line that gave it a bandwidth of probably about 20% of what a single home in Seattle has for a family. And what you realize, as we point out in our view, is that broadband has become the electricity of the 21st century. You can’t bring jobs to these places across the country unless you can bring broadband. You can’t improve education. You can’t improve healthcare unless you can bring broadband. You can’t bring hope unless you can bring technology. And then you add to this, the fact that the FCC says that everybody in Ferry County has broadband. And we knew the reality was that wasn’t the case. We describe meeting with the local community leaders at the Knotty Pine Diner in downtown Republic. Downtown is about three blocks and it’s this really beautiful location. And we asked them about the FCC’s data and they go, ‘We know the FCC has been saying that for years. They’re all wrong. Most of what Washington D.C has about us in terms of data is wrong.’ And one of the individuals said to us, ‘We don’t have broadband. Go tell that to the FCC.’ And as we share in the book, we did. We went to the chairman of the FCC and we said, ‘We’ve been to Ferry County. And it’s like a lot of places, your data’s all wrong, and because your data is all wrong, federal money to bring broadband isn’t available to them because you seem to think it’s already there.’ So it explains a lot in our view about politics in the country to see some of this firsthand.
MN: And it also goes to the information that those folks receive. You probably, like most people in this audience, read a lot of your news online and if television broadcast news is the only outlet you have then that’s going to give you a particular perspective. I wonder what the solution is though, because it doesn’t seem like the private sector can solve this because it’s not economical to deliver internet to these communities where there aren’t that many people to pay for it.
BS: We draw from history in that chapter as in so many where we sought to do this. And in part what we show is that anytime the country has had wireless technology, it comes to rural America faster than wired technology. Radio, television, cell phones spread quickly; electricity, landline telephones, cable television, not so fast. And so we talk about how new wireless technologies in our view can close this gap more quickly. But we also talk about the role of the government. And specifically we share this story that Carol Ann found in her research. It’s just this wonderful story of how Franklin Roosevelt brought electricity to rural America. And it was very similar: in the early 30’s, 90% of rural Europe had electricity, only 10% of rural America did. And so FDR created the Rural Electrification Administration. And even though the country went through the Great Depression, even though it had to fight World War II, in 1945 when FDR died, 90% of the country, the rural communities, had been connected with electricity. And there’s these wonderful stories of all the work that was done to bring electricity to every rural home. And if we could do that then, of course we can do broadband now, we just have to remember what we long knew. And if the people who did this before us had a high level of ambition, then heck, we should have that kind of ambition too.
MN: I’m going to ask one more question before we kick it over to audience questions. So this book does a great job of detailing how we got to this current moment where there’s so much tension between the technology industry and the public sector, and a lot of mistrust in both, frankly. But I wonder, looking ahead, what do you see as the next greatest challenge that’s going to require both the tech industry and the government to come together to solve?
BS: I think it, in part, is about artificial intelligence, because AI is the thing that is starting to really impact the economy. It will probably be the most fundamental engine of economic change for the next 20 to 30 years. And as we described in the book, we see the transition to an AI-driven economy as being comparable in impact to the transition from the horse to the automobile. And that’s why we go back and we talk about what that did and how the government had to adapt. And so I think it will mean huge economic change, huge need for skills, training for people, but it also—unlike, say, the horse to the automobile—is fundamentally empowering computers, machines to make decisions that previously could only be made by people. And so it really is raising not one, but two fundamental questions for all of us. The first is: what is the future going to do to our jobs? Will there be jobs for our children? What will they look like? But the second in some ways is perhaps even broader: are we, as a species, creating a future we can control? And we talk about the need to really address both of these issues quite squarely.
MN: Okay. These ones come from you. What inspired you to write this book?
BS: I think it was an appreciation that the world really has changed, but not in a way that everybody has equal ability to appreciate. We wanted to write this book to level the playing field. Just think about what we all read about and maybe even argue about every day in the world. You know, it’s issues around immigration and trade about globalization and income inequality. So much of that actually is being driven by changes in technology, but we don’t really talk explicitly, certainly not enough in our view about the technological change. In our view, it’s like talking about the symptoms but not the causes. So we wrote the book more than anything else to bring the causes to life and to try to level the playing field by making information more accessible to people so that we can all think about these issues around us perhaps, hopefully in a new way.
MN: What is your strategy when presented with the opportunity to work with groups who go against Microsoft’s values?
BS: This is a fascinating question and it’s one that is often asked of us every day, including in the context of our political action committee, because as a company there are definite values that we hold quite strongly. It’s about opportunities frankly in the appropriate and lawful way for immigrants. It’s about protection and advances for diversity. It’s protecting the rights of minorities, members of the LGBT community and the like. And so people often ask us, ‘Well, why do you interact with people who don’t share your values and your point of view?’ And there’s lots of reasons, but actually to me, the one that speaks most strongly and powerfully is because the only way we’re going to achieve our goals is ultimately to change other people’s minds. If the only people we can work with are those who agree with us already, then we’re probably just sentencing ourselves to a permanent state of gridlock. And I take hope and even a certain degree of faith from our own experience on some of these issues in Washington state. It’s easy to forget because things have changed so quickly, but it was only 7 years ago in 2012 that Washington state became one of the first states to pass marriage equality in the state legislature. And at the time, it passed in the House, which was controlled by the Democrats, the question was whether we could win enough votes in the Senate, which at the time could only pass marriage equality if we could win over four Republican votes.
And the question was whether any business would go forward and actually call on the legislature to pass a bill and we decided to do that. I was very much at the center of that at the time, and the question was how would we win Republican votes? The answer was by winning over four people who had never agreed with us before and it wasn’t, frankly, the same arguments that appeal to the Democrats. We knew the Republicans that we were going to have to win over were people we were going to have to win over based on an argument about business and the economy and, in our view, why marriage equality was going to be good for the Washington state economy and we did. We passed it first in the legislature, then we passed it on the ballot that fall and we did it because we stayed connected to people who didn’t agree with us and we worked with them every day until they did. And we care about these issues enough that we are committed to outcomes, to change, to getting things done, even if it means that some days you have to deal with the world of politics and politics is often about pragmatism and not principle alone.
MN: This reminds me of a section in the book when you talk about president Trump’s child separation policy, because we’re living in this age of employee activism. This afternoon I was at Amazon and employees had organized a demonstration to pressure the company to take a bolder stance on climate change, and in some cases that activism has caused tech companies to cancel contracts with the government, like Google. But you say Microsoft avoids doing that, that’s not your policy because there are situations where you might vehemently disagree with the political policy, but the technology that the government uses could still play a critical role. I wonder if you could talk about how that actually played out in the child separation policy.
BS: Yeah. Well first I would say, I think it is so fascinating to see this new era of employee activism and that’s why we talk about it as much as we do in the book. It’s so different from employee activism in the past. In the past it was really driven by unions and it was all about the rights of the workers and the benefits for the workers as employees, and the employee activism today, at least in the tech sector, is not ‘pay us more money’ or ‘give us more vacation or better healthcare.’ It’s like ‘do what we think is the right thing for society.’ I think that’s good. As we say in the book, sometimes you may disagree with people, you may think they don’t have the right answers, but they may still be asking the right questions. And so our view is, we actually don’t think it makes sense to just cancel contracts in democratically elected societies and start unplugging people from technology. In part, we do feel that way as a matter of principle. The government was elected, the companies were not. So if companies are going to go around—imagine if you’re the electric company and say, ‘Hey, we don’t like what this government agency enacted, so we’re going to unplug them. They no longer get electricity.’ There’s a lot of unforeseen, unintended consequences that can result from this. So we have not been comfortable in the United States saying, ‘You know what, we’re turning off the immigration authorities.’ And we share this story in the book, we felt very strongly about the child separation policies. We used our voice. And I personally—as the chair of Kids in Need of Defense, the largest legal pro bono group in the country, one that I co-founded 12 years ago now for the sole purpose of ensuring that kids could be represented by a lawyer going through an immigration proceeding—we felt very strongly about it, but if we turn off email, we turn off databases, ‘Oh my gosh, we’ll never get people and families back together, the government won’t be able to figure out who belongs with whom.’ So we said, ‘We’re not going to turn off the technology, but we are going to use our voice and we’ll lobby at times. We’ll go to court.’ I am actually very proud of the fact that on the 12th of November, the United States Supreme Court is going to have a hearing of huge importance. It’s about DACA, it’s about the dreamers. It’s going to affect 800,000 young people in this country. And there’s only one company that is a named plaintiff in the cases that are going to be heard by the Supreme court. It’s Microsoft. So you can see the balance that we try to strike and other people have different views and we absolutely respect the different views that people have, but we just think this is the right approach for us to take.
MN: Sure. And in the child separation incident, what really struck me in the book is that one of the reasons the government is now having such a hard time reuniting families is a program that was not designed to identify families as connected. Once they’ve been separated, there’s a drop down menu that said single or family. And once families were separated, the government has no record of how they’re connected. And if they had a more sophisticated software tool, those families might be reunited.
BS: Absolutely. To us, it was such an interesting story because it just showed how so many other things in life actually depend on technology. And so the unintended consequences of turning off technology are difficult to fathom. I mean, it is interesting to just think about the fact that if we or other tech companies had said one day, ‘Customs and border protection, you just lost your technology. It’s been turned off.’ The first thing that people would have been reading about, frankly, would have been all of the people at all the airports who could no longer get through customs because the customs authorities wouldn’t have been able to look them up in their systems. So, life is complicated and we disagreed with people who said, ‘Start boycotting these agencies,’ but equally important: people who are raising these questions were asking the right questions in our view and by engaging with them, by sitting down and talking and actually listening, it also gave us new ideas that we could pursue, including in how we use our voice as a corporate citizen.
MN: What is unique about Microsoft’s culture that allowed this book to be written compared with other tech companies?
BS: I guess we all like to think we’re unique and as humans we each are. But maybe we all have a lot of similarities as well. So I never want to sit here and say, ‘Oh, we are alone of a certain ilk.’ I will say one of the great things that has happened to Microsoft this decade has been the culture that Satya Nadella has brought to the company. And I think part of what he has brought is a sense of broad-mindedness. I think we’ve been really fortunate to have three CEOs who are all each really curious and in their own distinct ways, but to have a CEO who grew up in one part of the world and then lived in another, to have a CEO who’s an engineer but is the son of a prominent government official in the first generation after colonialism gave Satya this really broad perspective on life. And I think that’s been just an amazing thing. But then he’s really built on that with this focus, as we’ve often talked about, a growth mindset. Moving from as he has said, a culture of know-it-alls to a culture of learn-it-alls. And I think part of that interest in learning is a willingness to acknowledge challenges, problems. And so I do think that one of the things that we’re at least more comfortable doing than maybe some other companies in the tech sector is simply to acknowledge the obvious. Yeah, technology is great, but there’s a lot of challenges around today that have been created by technology. And I think that led us to frankly have the freedom to write in this way.
MN: This one is about—I’m going to give a little context on it and add another question too—it asks about your thoughts on the privacy legislation that almost passed in the Washington state legislature last session that would’ve implemented new regulations around data privacy and guardrails on facial recognition. So I would like to know your thoughts and I’d also like to know why it failed and what the chances are of seeing these kinds of regulations in Washington state going.
BS: As you know, we were very enthusiastic about seeing what we saw as a strong privacy bill pass in Washington state. We were very enthusiastic about facial recognition rules passing as well because there’s not yet a state in the country or even a nation around the world that has real protection against potential abuses of facial recognition. And it was interesting, it had passed the state Senate, I think 46 to 2 or thereabouts, and then it just hit this roadblock that couldn’t be overcome in the House. I think that there were lots of lessons to be learned, including for ourselves. I think privacy by definition is the kind of issue that really requires a broad tent and room for lots of different people to come together. And I think the first effort—this is where if we can’t turn the technology off, we’ll take it away.
MN: Maybe if it was a Surface, it would work.
BS: If you were sitting in the front row, you realize the timer started going off and the alarm wouldn’t stop.
MN: It’s because it’s an iPad, not a Surface, right, Brad?
BS: Meant to be taken outside, you know? But yeah, I think that there’s a lot of room for this state to continue to move forward to protect privacy. I think that it’s the kind of conversation that takes more time than could happen in an initial session. I think it probably requires a broader exercise to bring more people together. And I’m hopeful that that’s what is underway this year and that we might actually see some privacy legislation passed in a way that everybody broadly speaking will feel good about in 2020.
MN: All right. The iPad has spoken, we are out of time. Brad Smith, thank you so much for being here tonight.
BS: Thank you.
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