Despite last week's gyrations in the stock market, faith in tech companies has remained strong. What's generating those high levels of investor confidence?
I believe the answer is fairly clear: Over the past thirty years, tech companies have delivered unparalleled value to investors, consumers and the broader economy. In today's turbulent markets, tech stocks are considered safe bets. That would have been unimaginable ten years ago.
People generally feel good about technology. They trust technology, and their trust translates into phenomenal revenue for the tech companies. The love affair with tech extends far beyond mobile phones. Sure, we love our phones - but we also love the tech in our cars and in our homes. We love that our health care providers increasingly use technology to cure our illnesses and take care of our bodies.
That's the main reason tech stocks have become safe calls. As a society, our hunger for new and improved technology seems insatiable. Hunger drives demand, which in turn drives sales and profits. That's why markets love tech stocks.
What could possibly go wrong? I can think of a couple of ways in which investors might grow wary of tech stocks. A series of major cyber attacks could rattle our sense of confidence in tech. A couple of fatal accidents involving self-driving cars might cause people to think twice about the risks of too much automation. Widespread power outages or water shortages would diminish our trust in technology.
Another potential danger is the unchecked use of proprietary algorithms in a growing number of services used by large organizations such as banks, insurance companies, credit bureaus and government agencies. As predictive analytics and artificial intelligence are baked more deeply into IT systems everywhere, the level of risk posed by broken, outdated or biased algorithms rises dramatically.
As technology leaders, we have a moral and ethical responsibility to point out the weaknesses in our systems. We need to make sure that our systems are robust, resilient, flexible and adaptable. We also need to make sure the information we deliver is accurate, unbiased and fair. We should advocate for solutions that are transparent and explainable.
We cannot allow technology to become a "single point of failure" in our rapidly expanding global economy. As the markets have clearly demonstrated, technology is universally perceived as a driver of growth and income. To an astonishing degree, technology has become the foundation of modern life. We simply cannot live without it.
Stock markets are more than just places for trading shares in companies. They are proxies for our collective vision of the future. Today, the markets are telling us that technology is absolutely critical. I completely agree, and I urge you to consider the profound implications of the incredibly interlinked relationships between technology and the global economy.