Much has been written about income inequality, with Silicon Valley being used as a focal point for discussions to highlight this critical issue. While the discussions have been focused primarily on finding immediate solutions, the drivers have mainly been from traditional players in the income inequality discussion.
What has been missing from the conversation are the ideas from the Silicon Valley tech community. Whether participants in the Silicon Valley tech ecosystem will be viewed as potential problem solvers or contributors to income equality will always be debated but what is more crucial is that they be brought to the table.
While many traditional participants attempting to address income inequality argue that the Silicon Valley tech community brings nothing of added value to the discussion and that their so called "quick fixes" do not solve the fundamental issue, what traditional participants fail to realize is by bringing more non-tech Silicon Valley participants to the table will only worsen the growing income inequality that is occurring. It might take some more convincing of Silicon Valley participants to treat the growing income equality issue as a critical agenda item.
The growing income equality will increasingly start impacting a number of factors critical to Silicon Valley, including:
(1)Overall Reduced Consumer Risk Taking: Growing income inequality has a definite psychological impact on overall consumer spending habits. As demonstrated with the last recession, consumer spending is directly correlated with consumer economic security. Consumers are increasingly becoming hesitant on big ticket spending due to a growing concern about their own financial stability.
(2)Reduced Startup Risk Taking: Risk adverse consumers mean that startups may have a reduced number of potential consumers willing to try new products and services, thus limiting growth potential. Not only does this potentially mean less customers, but less innovation as well as startups begin to take "tried and true" approaches instead of radical and daring ideas.
(3)Negative Brand Awareness: In the past, discussions concerning Silicon Valley were filled with characterizations such as "innovative", "ground breaking" and "bright". Those characterizations still exist but discussions have started using phrases such as "spoiled", "out of touch" and "elitist". While these characterizations may not have an immediate impact on Silicon Valley, they could potentially have corrosive long term effects. In today's highly globalized and networked society, businesses with negative brand perception will have their sales, supporters and partners disappear within seconds and take years to rebuild.
(4)Increasingly Conservative and Potentially Anti-Technology Populace: With the general populace becoming increasingly uneasy with the state of both the overall economy and their own individual finances, many not only take a risk-averse stance but they are also taking a much more conservative and potentially anti-technology approach. With technology increasingly viewed as a tool for the elites rather than a tool for the masses and individuals feeling left out of the tech economy, it is no wonder that there is an increasing paranoia against Silicon Valley and the tech culture.
If Silicon Valley has an economic as well as moral imperative to address the growing global income equality what can it do to help solve this issue? The answer is more complex and multilayered than anyone would like to believe, but as with any issue of such geopolitical significance, there are no easy solutions. In some respects, Silicon Valley must do what it is good at. It must operate at multiple levels in multiple directions but somehow produce radically society changing results. As such, what Silicon Valley needs to do is the following:
(1)Engage With Traditional Players And Push For Change: As much as engaging with traditional players is antithetical to Silicon Valley culture, it is increasingly a necessity to solve global solutions. Silicon Valley's recent successes have come under criticism due to the fact that they seem to be creating an "alternative" system that skirts existing established norms. One can argue that Silicon Valley has built its success since its inception on its ability to grow outside the established system.
That success is increasingly under pressure as Silicon Valley increasingly innovates in spaces where it is directly challenging the traditional system. One only has to look at Uber and AirBnb as examples of startups attempting to disrupt traditional players and crashing headlong into concerted resistance.
While, this disruption and counter challenge is expected in the for profit sector, it is less productive in the non profit sector, particularly with vulnerable individuals who need assistance caught in the middle. As such, it is necessary for Silicon Valley to find ways to constructively work with traditional players to start addressing the income inequality issue amongst other non profit issues.
(2)Continue To Do What Silicon Valley Does Best: Innovate: While Silicon Valley must work with traditional players to produce results that address income inequality, it must also continue to find ways to be disruptive and innovative with these new conditions. Luckily, Silicon Valley has proven it has the ability to adapt and thrive under changing conditions.
There are many who argue that Silicon Valley is not a willing or needed participant in the fight to address income inequality. However, the reality is that it is increasingly a critical player. The growing importance of technology and innovation in the global economy means that any solutions that are to be found concerning income equality will increasingly rely on the disruptive founders of Silicon Valley.
In order for Silicon Valley to continue to capitalize on its success, it needs to find a permanent solution to income equality, not only from a moral imperative, but an economic one as well. Income inequality needs to be addressed to continue to drive growth and risk taking amongst potential target customers. Otherwise, the success the Silicon Valley has experienced thus far will come to a crashing halt.
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