Recently, a friend was given advice on her start-up that included a warning: “I don’t want you to end up wasting 10 years of your life only to end up owning 5% of your company.”
It is advice many founders have heard before. Despite protestations that investors only ‘invest in teams they believe in — the tech start-up world is fuelled by fundraising, investments, exits and the promise of banking large sums of money from being able to ‘validate your idea’ and ‘dominate market share’.
If you thought the overwhelming vibe of the tech start-up ecosystem was about creating businesses that support customers in a better way, employ talented people and innovate a sector — you will quickly be disappointed. Afterall, Elon Musk doesn’t have legions of fanboys because he runs an electric car company.
However, this blog isn’t about start-up culture or fundraising advice. This is about social — the ‘S’ in one of the most common acronyms used in an industry that has its fair share of acronyms — environmental, social and governance (ESG).
I’ve often been frustrated by listening to panel discussions and feature pieces talking about compliance and investment issues associated with the ESG considerations. More often than not, the conversation is dominated by climate change. A worthy and important topic — but the ‘greening’ of ESG lets us ignore and turn a blind eye to impacts that often get denigrated and dismissed in the name of growth. The impact that emerging tech and accelerated growth has on communities, various demographics, and the health of society at large.
Would it really be ‘wasting your life’ if you spent 10 years building a company that diversified financial offerings in such a way that could be life changing for many new entrants to the UK? There are many people in the start-up space who feel if you don’t look at that journey through the lens of growth, investors and exits, then nothing else matters.
In fact, there are well-known tech leaders who publish rambling diatribes painting anything that could be in the ‘social’ bucket as an enemy of progress and a barrier to growth. But it is precisely the ‘social’ that lies at the heart of every success or failure in many areas of life — not just fintech start-ups.
The ‘social’ includes issues around inequality, working conditions, human rights, product safety, community relations, and supply chain transparency. If you are building a company that doesn’t consider the above a priority, those issues will quickly become a priority in ways that are damaging for your business.
Last week, the UK hosted the first AI Safety Summit 2023 at Bletchley Park in Buckinghamshire. The summit was an opportunity for UK Prime Minister Rishi Sunak to position the country as a global centre for artificial intelligence. However, it was also a public forum for countries and tech companies to discuss and reassure society at large that they are aware of wider concerns about the use of AI and its potential use for good or evil.
Threats include AI that can learn to defeat cyber defences and autonomous weapons that can be programmed to hunt and kill.
The Summit saw 28 countries, including China and the US, sign the Bletchley Declaration on AI Safety, agreeing to “the urgent need to understand and collectively manage potential risks through a new joint global effort to ensure AI is developed and deployed in a safe, responsible way for the benefit of the global community”.
All of the above sounds like the ‘S’ in ESG is a topmost concern to those developing, building and regulating the potential of AI.
However, according to PWC, AI could represent $15tn in the global economy by 2030. With the greatest economic gains from AI coming from China (26% boost to GDP in 2030) and North America (14.5% boost), equivalent to a total of $10.7tn and accounting for almost 70% of the global economic impact.
What if the current trailblazers in AI spend almost the next 10 years of their lives managing the impact this advanced technology will have on society instead of carving out as much of the predicted $15tn for their investors and their own exits as possible? Would that be a waste of their lives?
The words of fancy global events, public signatories and press releases tell one story, but the actions of an industry over decades and decades tell quite another.
