by Lucie Greene
Deep-rooted cultural differences in many instances dictate how we respond to these questions. As Silicon Valley touches all these things with its products and services, it’s colliding with sets of values that vary greatly from market to market. In Europe, for example, Germans have a long history of attachment to data protection because of spying during the Communist era. So do the Dutch, and the French to some extent. Contrast that with Singapore, where famously people assume that the government knows everything about them.
It plays out in a similar way when it comes to employment rights—independence, self-determination, and flexibility, save for the heavily unionized industries in the United States, are running themes. Uber lost a UK ruling regarding minimum wage for drivers. In France, the URSSAF—a network of organizations that administer the country’s social security system—has also brought a lawsuit against Uber, which has been accused of practicing what can be translated as “hidden wage labor” or “disguised employment relationships.”
In December 2016, a network of European and North American unions (including groups from Seattle and Washington, DC), labor confederations, and worker organizations went head-to-head with the gig economy. They issued a call for “transnational cooperation between workers, worker organizations, platform clients, platform operators, and regulators to ensure fair working conditions and worker participation in governance in the growing world of digital labor platforms, such as Clickworker, Amazon Mechanical Turk, Jovoto, and Uber.”
Europeans are taking a very different approach to ideas of employment because their experience of it is different from America and even the UK. The U.S. has historic widespread at-will employment, but a market like France has well-entrenched employee protections and principles of employer responsibility. That context is inevitably going to shape the view of a platform like Uber, which offers very little protection to its “members.” It runs counter to fully baked and historic national values.
The different attitudes toward data in the U.S. and Europe are shaped by national histories. According to Jane K. Winn, “Americans are really invested in the idea that ‘I can reinvent myself; I am the author of my own destiny.’ Consumer credit in the United States is linked to that American sense of unlimited possibility and urgency.” She adds: “That’s why Americans don’t believe commodification of personal information is bad. Commodification of personal information is essential to the way that the credit economy works in the United States. And Europeans don’t support the commodification of personal information, in part because it supports consumerism and consumer finance and consumer debt.”
They also differ in attitudes to government “at a deep, deep structural level,” says Winn. “How does the United States feel about government? Mistrust. How does the United States feel about the market? Trust. Americans mistrust their government and they trust the market. Europeans trust their governments and they mistrust the market, so data protection law, as in Europe, reflects this . . . I don’t know of any other country in the world that would want the American system. It is totally unique to American culture.”
Which would be fine if Silicon Valley were only in the U.S. But it is rapidly expanding in Europe, Asia, South America, and beyond, and each nation has complex, culturally rooted relationships with data and privacy. Understanding these cultural mores is crucial to Silicon Valley’s success. Thus far, it has proven to be challenged in cultural sensitivity.
Golden Arches
Of all of the international prizes, China is the biggest and most tantalizing for its scale and value, but remains the most elusive to Silicon Valley companies. And China is now rapidly competing with Silicon Valley for lucrative emerging markets.
China has deeply rooted and entrenched native tech brands. They wield large internal influence, supported by the Chinese government, which historically has reinforced their entrenchment by banning foreign platforms that don’t comply with their rules. Chinese tech firms work in close, transparent symbiosis with the government on privacy and censorship.
Outside their national borders, China’s tech brands have yet to achieve quite the same cultural mystique and soft power of Silicon Valley companies. While often notably absent from Western tech and business media, Chinese brands are gaining greater visibility in the international press. Chinese tech and social media brands such as Alibaba and Tencent have been investing in Hollywood and Chinese movie projects (developing promotion, ticketing, and product placement tie-ins), all enhancing the visibility of these Chinese brands in mainstream cultural outlets.
Recently China’s been on a soft-power offensive. At the 2017 Lions International Festival of Creativity (advertising’s annual hurrah by the beach in Cannes, in the South of France), Alibaba showed off its Uni Marketing advertising platform and its deal with France’s Publicis Groupe.
Jack Ma, CEO of Alibaba, pledged to create a million jobs in the U.S. after a meeting with President Donald Trump in January 2017. He has also said he intends 50 percent of Alibaba’s business to come from outside China. Alibaba has also been investing in Hollywood entertainment, Magic Leap technologies, and more. Singles’ Day (the world’s biggest online shopping event), which started in China as an anti–Valentine’s Day celebration for the unattached back in the ’90s, has arguably been Alibaba’s biggest global export. In 2016 the festival, which generated around $17.7 billion in sales, made headlines for having a Pokémon GO–style augmented reality mobile game, which gamified shopping around physical malls. Katy Perry performed at the launch concert. Singles’ Day has since been adopted by other international retailers.
Ma has been making overtures to American businesses, positioning Alibaba as the gatekeeper to the lucrative Chinese market. At Gateway ’17, a June 2017 Alibaba conference in Detroit, Ma said his company could help one million American businesses sell to China and the rest of Asia in the next five years. Alibaba was also present at New York Fashion Week in 2017. Its partnership dangled access to Chinese consumers. Meanwhile, Tencent wooed Western marketers with its vast trove of consumer data at Cannes.
As the world looks to emerging markets for growth, China’s tech companies may have the edge, since these areas, like China, are all mobile-dominated and have a native understanding of leapfrogging to mobile-first life. Didi Chuxing announced a $100 million investment in Brazil. It raised $5.5 billion in funding in 2017, with sights set on massive expansion. Alibaba has already made inroads in other markets outside China, with partners including Southeast Asian online retailer Lazada. If Chinese brands can successfully rebrand for the West, they’re poised to make a huge impact on the tech landscape.
Chinese tech is also starting to lead on innovation. Former Alphabet boss Eric Schmidt warned that China is poised to close in on the United States’ lead in artificial intelligence by 2025. At a conference in Washington in November 2017, Schmidt stated the power shift will be caused by the Trump administration’s funding cuts for basic science research at a time when China has unveiled a national plan to develop AI.
Meanwhile, a few Silicon Valley brands continue to try their luck in China. Amazon, having been slow to grow in the market, announced it is offering Amazon Prime for free. Others have thrown in the towel. After a long-fought battle against ride-hailing rival Didi Chuxing, Uber sold its operations to the company. Google shut its operations in 2010 after a cyberattack from within the country targeted it and dozens of other companies. While investigating the attack, Google found that the Gmail accounts of a number of Chinese human rights activists had been hacked.
Nevertheless, the size of China’s immense market remains alluring. Six years later in 2016, Google moved back in, opening an experience center in Shenzhen. Very little was released about the opening or the exact function of the center, but one detail reported by the media was the attendance at the event by a relatively high-ranking national government inspector, something that many read as significant.
Each passing year only makes conditions tougher in China fo
r Western companies. Silicon Valley giants now face fierce local competition from Chinese companies that have not only massive user bases but a dense, multifaceted string of services incorporated into their offer. Google equivalent Baidu has 80 percent of all web searches in China, the country’s biggest search engine. Like Google, the site offers popular vertical search-based products such as image search, video search, news search, and maps. (Through Baidu’s mapping app, users can do everything from ordering a taxi and making a restaurant or hotel reservation to ordering in food and finding local stores.)
Mark Zuckerberg’s attempts to woo China are now famous. He has learned Mandarin and has courted the government, and he even invited Chinese president Xi Jinping to name his first child. Facebook, despite these persistent efforts, continues to fall short compared to competitors such as Tencent QQ and Sina Weibo. Sina Weibo, once seen as a cut-price Twitter, has quickly become a rejuvenated platform with sparkly market-leading additions such as embedded comment threads and videos.
The most revolutionary, however, is Tencent’s WeChat, a social network and messaging service that has morphed into a multi-layered platform offering everything from a free video-chat system and taxi-hailing service to bill-paying services and an extensive shopping capacity. Its environment is so rich, it’s been dubbed the “one app to rule them all.” That title is borne out by the devotion of 1 billion users worldwide—nearly everyone with internet access in China—and several million overseas users.
Chinese tech firms wield comparable celebrity with Silicon Valley figures within China. Alibaba (sometimes described as the Amazon of China) is by many metrics the world’s biggest online commerce site, made up of three main sites: Taobao, Tmall (the premium shopping site), and Alibaba.com (the company’s business-to-business platform). It was founded by Jack Ma, a charismatic local hero whose singular focus has taken the company from an enthusiastic idea to one of the world’s most valuable tech companies. “He’s on the cover of every magazine, everybody knows him, they watch videos of him, they’re imitating him,” says Kevin Kelly, a renowned futurist who recently finished a book tour in China, comparing Ma’s media presence to that of Mark Zuckerberg.
Part of the issue for Silicon Valley companies is that China has very established, and mature, players as well as culturally divergent approaches to the internet—and to counterfeits and intellectual property as well. Chinese tech firms famously, and freely, copy one another’s features. “Chinese companies approach the internet in a different way,” writes New York Times contributor Paul Mozur. “In the United States, tech firms emphasize simplicity in their apps. But in China, it’s three major internet companies—Alibaba, Baidu, and the WeChat parent Tencent—who compete to create a single app with as many functions as they can stuff into it.”
Silicon Valley may also be moving in this direction, adding density and new functions to each of their offers and replicating the scrappiness of Chinese tech firms, even if it means blatantly copying rivals. Facebook-owned Instagram recently added “stories,” another version of Snapchat. They are cannibalizing each other’s services.
Will it be able to fight off China when it comes to the rest of the world? Imperial battles are sure to follow. And in many instances, it’s in regions where China might have the upper hand, given its inherent understanding of emerging market behaviors in technology (or in some instances, its pure scrappiness, as was witnessed with Uber’s experience launching in China). The fight for global domination might mark the next highly public humiliation for Silicon Valley.
Connecting Cuba
“You’re gonna feel the sun on your face in two hours.” The portly JetBlue stewardess winks, clasping her buckle as the plane prepares for take-off.
CNN and HGTV are playing on monitors during the flight. Fixer Upper’s Chip and Joanna Gaines are unveiling another rustic industrial barn makeover (isn’t it always?) as the plane descends into Havana.
How strange to fly such a short distance and land in such a radically different place. A married Texan couple are crying with joy when getting the first look at their distressed chandelier and marble kitchen island (again, isn’t it always?) as passengers are invited off the plane. Into a land that is, mostly, without internet. Or at least, a radically different version of the internet than we’re all used to. All internet service on the island is controlled by the state-owned telecom company ETECSA and primarily provided through crowded, government-approved wi-fi hotspots around the country. There are 237 paid public hotspots on the island for 11 million people to use. Home internet connections are rare, and public access wi-fi at the hotspots costs CUB$2 an hour—which is expensive for average Cubans who earn only 17–20 of these “convertible pesos” per month. It’s also very slow. Yet, demonstrating the desire for connectivity, the hotspots are recognizable for the crowds that gather around them. Most are in parks, international hotels, and other public places and are swarmed on Sundays, everybody’s day off, with crowds beneath the shade of trees, sitting on benches, and looking intently at their screens.
This does show signs of changing, thanks to Google, which was recently granted permission in partnership with ETECSA to install servers on the island, increasing internet speeds as signals no longer need to travel through Venezuela, where the nearest Google server previously was. The servers store content from Alphabet-owned properties Gmail and YouTube, making their apps up to ten times faster. Washington, DC has no direct data link to the communist island.
The Google agreement reportedly contained a clause that ETECSA will not “censor, surveil, or interfere with the content stored as cache on those servers.” The content is encrypted, meaning the Cuban government cannot hack it. The Google deal follows a concerted effort on behalf of the company since President Obama announced the reestablishment of relations with Cuba in 2014. (Trump has promptly rolled this back.) But Google’s efforts, for now, seem unthwarted. Even so, there’s a long way to go before Cuba has anything like the internet that most established or even emerging markets experience. And the internet is faster if you’re using Google-owned products.
Cuba has emerged as a hotspot in recent years, an exotic time capsule withheld from Americans by a long-standing trade embargo, a new and alluring destination for intrepid tourists. Momentum has been fueled further by new surveys in favor of lifting the trade embargo between the U.S. and Cuba, Obama’s relaxation of travel restrictions, and a historic presidential visit to the island in 2016. On cue, the headlines have been full of brands announcing new travel routes to Cuba (not least JetBlue, with direct flights from New York). Starwood Hotels, now merged with Marriott, manages a hotel in the city. Movies, like The Fate of the Furious (part of the Fast and Furious franchise), are being filmed there (Vin Diesel even took part in a music video). Chanel hosted its fashion show in Havana, flying luminaries from around the world to cruise the ruins of crumbling Old Havana in open-top cars, Instagramming to their heart’s content. Will Trump’s actions reverse this? He’s already introduced tighter travel restrictions, which—combined with the devastation wrought by Hurricane Irma—has prompted a slide in tourism. Still, the groundswell of international interest in Cuba, and the rising ambition of its residents, might prove its forward momentum unstoppable.
Much of Havana feels like a promise of the future paused in motion, as communist rule came in to place and U.S. blockades ensued. Casinos and movie theaters, thrown up with unbridled exuberance in the 1950s economic boom, have remained under a bell jar since diplomatic relations were severed. Vedado, the neighborhood built at the peak of Havana’s casino prosperity, is practically a precursor to the Jetsons in its unbridled, star-spangled enthusiasm for the future. Today, water parks, stadiums, movie theaters with modernist lines, swooping arrows, and curves are sprouting weeds and crumbling at the edges. Their bright colors faded like a vintage T-shirt. It’s like watching a holiday home movie on an 8mm.
Havana was built for Instagram—and yet, try to Instagram its crumbling past
el Beaux Arts ruins, its 1950s open-top American cars, and you’ll likely have to wait till you’re back with JetBlue.
Cuba may not have easy access to the internet, but it doesn’t act like it. There’s a palpable desire for connectivity, and its residents are as connected to pop culture as any New York millennial.
Walk the streets of Old Havana and pretty much every young person has an iPhone or a Samsung smartphone. R&B music blasts from vehicles. Smartphones are replete with apps (about 2 million Cubans own cellphones). Youths are clad in knock-off Nike sneakers. There’s a thriving app startup scene—except the apps are designed to be used with very little or no connectivity. There’s even a bootleg version of iTunes, with the latest magazines, games, movies, and TV shows, distributed on a physical external hard drive via a network of entrepreneurs to Cuba’s residents. It’s called El Paquete (“The Package”) and includes not only international magazines but the burgeoning raft of new local magazines coming out of Havana.
Little wonder that Silicon Valley’s companies, primarily Google, have zeroed in on the island as ripe territory for expansion. Not only as a humanitarian prospect (not to mention a sexy headline) but as a lucrative untapped market of some 11 million new consumers. They’re meeting with startup founders there. Sponsoring galleries—with free wi-fi! Courting politicians and finding ways around the lack of connectivity or easy payments. (Airbnb’s biggest challenge in Cuba was getting a digital marketing and payment platform to work on an island with such poor connectivity and limited banking services. It set up a system where someone using a wi-fi hotspot manages Airbnb reservations for multiple property listings and remittance services. Cuban hosts receive their payments in cash from a courier on a motorcycle, usually within a week of the booking.)