By the London technology team
Algorithmic regulation – If technology provides the answers to society’s problems, what happens to governments?
In a lengthy but thought provoking Observer essay, Evgeny Morozov explores the concept algorithmic regulation, i.e. the idea of relying on data, disruptive technology and (automatic) algorithms to govern society and enforce its rules and laws. Morozov has reservation about the idea as he believes that it will create a “political regime where technology corporations and government bureaucrats call all the shots” but he also admits that technophobia is no solution. You can read more about his concerns in the essay or in his latest book (NY Time review here).
UK tech sector reliant on angel investors and Government grants
The Silicon Valley Bank published its latest annual innovation economy report which provides an insight into the business outlook of executives from rapidly growing businesses in the software, hardware, healthcare and cleantech sectors. The report was picked up by the Guardian which focused on the finding that the UK’s tech sector is significantly more reliant than the US on the beneficence of “angel investors”. The Guardian further suggests that these findings may go some way to explaining why UK executives also reported more optimism than their US counterparts concerning the wider fundraising environment. Whilst British companies receive markedly less money from private equity and corporate investors, the report highlights that there is also a greater reliance on Government grants in the UK, with 1 out of 10 execs receiving state grants in 2013. However, despite the sustained Government rhetoric around support for ‘tech city’ and the UK’s innovative technology firms, it is revealing that only 1% of the British executives interviewed are planning on their next source of funding coming from a Government grant.
Tech financial results
Following last week’s announcements by Google, eBay, Yahoo and Intel, more major technology businesses published their quarterly financial results this week. Amazon has published lower than expected earnings for Q2. Despite recording record sales results of $19.34 billion, the company reported a loss of $126m over the quarter, the web retailer’s biggest loss since 2012. In contrast, Facebook smashed estimates, announcing a staggering rise in revenue of 61% to $2.91bn and generating a profit of $791m. Of note is their strong mobile ad performance, which is now responsible for 62% of ad revenue, and subdued critics who said Facebook would struggle to monetise it’s mobile platform.
Microsoft has seen a 7% drop in Q2 profit, partly due to the software giant’s acquisition of Nokia. Quarterly revenue grew 17% to $23.38bn. Meanwhile, Apple reported an increase in quarterly profits of 12% to $7.75bn with a 13% increase in iPhone sales. The company has seen a particularly high level of growth in BRIC countries.