The transformational power of the Internet of Transparency

The phrase the Internet of Things has quickly become part of the lexicon but it is not gadgets that will drive transformational change, but transparency.

At a Transparency International seminar recently, China experts discussed that country’s crackdown on corruption. One of the experts at the seminar commented that the internet was largely responsible for this.

Since the rise of China’s President Xi, there has been a high profile focus on corruption. In July, China’s press agency Xinhua announced Operation Fox Hunt to “block the last route of retreat” for corrupt officials. In the last week, Xinhua announced that after the Chinese Government had sent 20 teams across Asia it had made 180 arrests.

China is believed to have found more than 13,000 officials guilty of corruption in the first nine months of 2014.

Corruption in China has been endemic across the dynasties. In recent years, China’s problem has been the rise of ‘princelings’ – the sons and daughters of Chinese officials who were living lavish lifestyles. The anger at princelings has surfaced on a number of occasions and has surprised China’s communist hierarchy.

China’s censoring of the internet is well known. Even so, there has been a massive rise of social media. The conclusion of China experts is that whilst there is a political element behind the corruption crackdown, there is also a realisation in the upper echelons of the Communist Party that they are unable to stop chatter about the corruption of local officials. The fear is that anger at this corruption has the capacity to create the kinds of responses that were seen in the Spring Revolution in North Africa.

In short, China’s Communist Party has come to the realisation that its hold on power will be determined by the way they handle corruption.

The transformational power of the internet has been most evident in developing countries, but change is also occuring in the developed world.

One of the most significant aspects of the digital revolution is the way that it has changed access to the internet.

According to the Pew Centre, in the United States the rise of smart phones has led to a shift in the way the internet is accessed. Nearly two-thirds (63%) of cell phone owners now use their phone to go online. According to the Pew Centre, because 91% of all Americans now own a cell phone, this means that 57% of all American adults are cell internet users. The proportion of cell owners who use their phone to go online has doubled since 2009.

Given that smart phones have only been around for a short time, it is hard to predict how they might drive change. They will of course be used for day to communication through channels such as Facebook. But even the way Facebook is used is changing, evolving beyond being just a ‘person to person’ communication channel.

Politicians now use Facebook – and if they don’t, they probably won’t stay elected for long. Institutions, including corporations also use Facebook, to varying degrees of success. For business it is important to understand that in this new world, every engagement, no matter how small, has the capacity to be shared to a wide audience. Successful businesses are those that know social media is not about appointing a couple of 21 year old kids to run a Twitter account. It is about making sure every aspect of a business can withstand scrutiny – particularly the way you handle customer complaints.

Other sectors that are evolving in their use of the internet are activist groups. It has never been easier to create a group – which is a lesson for established institutions. But there are new rules around the way groups work. There is no autocratic structure. There are no ‘minutes of the last meeting.’ Successful activist groups are those that are collaborative and share – not just amongst local peers but globally.

Examples of this are the activist campaigns on coal divestment that are popping up in campuses across the globe. There is no hierarchy behind these groups. The internet provides the ability for a group to communicate with its members but also with other campaigns across the globe. Success in one campaign is quickly adapted into the campaign tactics of another campaign.

We are in the middle of a transmogrification. How the internet will definitively shape business and institutions will only become clear over time.

But what is clear now is that the transformational power of the digital revolution is not about creating the Internet of Things but about the Internet of Transparency.