'Social Credit' Tech Is Coming: 5 Ways for U.S. Entrepreneurs to Capitalize
Is your behavior naughty or nice? Forget Santa: Government and corporations will soon be taking notice.
It sounds like something out of science fiction: the daily behavior of billions of citizens, tracked digitally and rewarded or punished by an unknowable, all-powerful algorithm. But, such digital control is no longer simply the stuff of pulp novels. The Chinese government will soon complete a system of social credit scores to incentivize citizens for virtuous behavior -- and penalize them for less-desired activities.
The idea is that if citizens behave unethically or dishonestly in their day-to-day lives, they will lose access to everything from government benefits to public transportation. In the Party’s eyes, direct consequences will help create a more transparent society -- or at least one more easily controlled.
It’s a new experiment in human society, so we can’t predict the results. But while you may see this as a crazy idea happening in a far-away place with no connection to our own lives, think again.
True, China will be the first proving ground for a societywide social credit system, but the technology exists already. Some system of social credit scoring -- perhaps smaller in scale, or perhaps even more ambitious -- is certain to touch our own society sooner than later. The growing breadth of available data on social behavior is simply too valuable for the powerful to ignore.
Maybe such a system won’t be controlled by any government, but by corporations or community organizations. We don’t yet know what form it will take in North America, but you can bet that social credit scores are coming. That means that the time for entrepreneurs to begin preparing for them is right now.
This may all sound frightening, but a system devised by human beings to control others can also be controlled, if you know what you’re doing. If you’re a true entrepreneur, then you see the opportunity in every social evolution. And big changes mean even bigger opportunities. Are you ready? Here are six ways to begin thinking about how to prosper under such a system when -- not if -- it arrives:
1. Live life in the open.
“If you have nothing to hide, there is no reason not to be transparent.” -- Mohamed ElBaradei
Privacy is a relic of a different time. Everyone has a camera in his or her pocket, many of our most intimate details are the property of publicly traded companies, and digital stalking has never been easier.
But don’t cling to your privacy. To thrive in the coming age of the social credit score, live your life openly with honor and transparency. Trying to hide indiscretions or shut out prying eyes will no longer be possible, so shift your energy into ensuring that you have nothing to hide. If you can’t let go of some socially unacceptable behaviors, then you must at least be up-front and honest about your reasons for doing so. Always remember that whatever you do, you will be visible.
2. Be trustworthy.
“I look for a person I feel is trustworthy, driven and smart. I invest in the person first, because in the event the business fails, the person and I can move forward and create another business.” -- Daymond John
One of the main justifications China has for its new social credit system is that its society lacks the necessary trust to conduct business with confidence. The system’s original proposal puts it this way: “[Such an initiative] will forge a public opinion environment where keeping trust is glorious. It will strengthen sincerity in government affairs, commercial sincerity, social sincerity and the construction of judicial credibility.”
Do people trust you? Make sure they can. In a social credit system, honoring your commitments will be paramount. If your boss can’t trust you to come into work on time, you may find that your preferred bank no longer trusts you to repay a loan -- or that the government won't trust you with air travel privileges. In order to succeed in your goals, make sure you can be trusted by everyone you meet. If you do, your privileges and rewards are sure to increase.
3. Apply the same rules to everyone.
“Watching a good actor is the best way to learn.” -- Kieran Culkin
Just because you’re being watched doesn’t mean you can’t do a little watching of your own. Screen those you do business with. Check their backgrounds, examine their relationships and keep close tabs on their social credit scores. Why? Because your social credit score will be affected by those with whom you associate!
Doing business and spending time with people whose social credit score is higher than your own will bring you up; those with lower scores will bring you down. Make sure you aren’t being held back by those whom the system deems untrustworthy. That way, you can boost the scores of your own friends, associates and family by association.
4. Capitalize on good credit.
“If you don't take good care of your credit, then your credit won't take good care of you.” -- Tyler Gregory
A good social credit score is like a good traditional credit score: It does you no good unless you use it. Exercise your privileges at every opportunity: Take a better job, fly first class, associate with other high scorers and enroll your kids in better schools. Every privilege you successfully exercise will help cement the fact that you belong: After all, social credit is self-reinforcing. As long as you do everything right and refuse to take shortcuts, a good social credit score will be as good as cash.
5. Know where the real value lies.
“You can have data without information, but you cannot have information without data.” -- Daniel Keys Moran
As valuable as a good credit score will be, nothing on Earth will be as valuable as the mountains of big data that must be collected to make such a system work. That data will be the property of whoever will be collecting it, but that doesn’t mean that those people or companies won’t share it or sell it to the right company or individual.
In this context, it won't take long before society is stratified between those with access to social data and those without, and those without will forever be at a serious disadvantage to those with data on everyone in society. Make sure that your own social credit score is good enough to put access within your reach.
Now, even in light of the social credit system that China is implementing, this kind of thinking may seem cynical or calculating. I would argue, instead, that it is pragmatic. After all, the beginnings of such a system surround us every day. Everything from the information that we are shown online to the prices and opportunities we’re offered are wrapped up in the way the digital world curates identity.
We have easy access to our credit scores and know the way to improve them. When it comes to the online world, this isn’t nearly so straightforward. It soon could be. I’ll be prepared. Will you?
Steven Kaufman, CPA, MsEDE, is a finance enthusiast and the founder and Chief Acceleration Officer of Zeus Trust Company, which operates a real estate crowdfunding platform under the brand ZeusCrowdFunding.com, and a long-term lending platform under the brand Zeus Mortgage Bank. Kaufman is frequently interviewed on current financial markets by local and national news organizations such as FOX, ABC, CBS, CNN and Bloomberg. He completed the Strategic Marketing Management Program at Harvard Business School and has a master's degree in economic development and entrepreneurship from the University of Houston.