🎒 What Shopify can learn from "Big Tech"
This piece was published in print today in the Toronto Star. Here is an online link.
🌞 This week’s (sporadic/surprise!) long read is brought to you by me and Sarah Doyle, the Director of Research + Policy at the Brookfield Institute for Innovation and Entrepreneurship. Sarah and I studied together in McMaster University’s Arts & Science Program, and we both completed the Action Canada fellowship. 🇨🇦
Earlier this summer, we were chatting about whether Shopify in the context of regulatory conversations around “Big Tech.”
We took the approach of: just b/c the company can “do no wrong,” doesn’t mean it can’t do BETTER - and we challenged ourselves to articulate what “better” could look like. We also wondered whether the company receives the kind of regulatory scrutiny that [we think] it deserves.
This is [part of] the result. 👇
💫 Shopify, now Canada’s most valuable company, is the shining star of the country’s innovation scene. The company’s revenue is on the rise and it has committed to sharing these gains with partners, lowering barriers to entrepreneurship and turning e-commerce into a force for good. As a socially responsible, high-growth global technology company, Shopify is out front.
But the goal posts are moving. 🥅
Tech companies are being scrutinized for everything from anti-competitive practices and data use to content policies, taxation, and employment practices—most notably in July’s “Big Tech” congressional hearing in the US. The role of the corporation and the fundamentals of how our economy functions are being - rightfully - challenged. And governments are reaching across sectors to chart an inclusive, equitable and sustainable economic recovery. Canada and the world need bolder models for responsible innovation. Shopify is well positioned to lead the way—but to do so will require the same level of ambition that the company has brought to its growth trajectory.
Shopify has engaged in a range of initiatives that are worthy of admiration and replication by other large technology firms in Canada. Recently, it offered free trials to help thousands of businesses “go digital”, contributing to the survival of Canada’s ‘mainstreet’ businesses during COVID-19 closures, while (not accidentally!) growing its client base. It has partnered with Indigenous organizations, provided work-integrated learning opportunities to aspiring developers as part of an accredited Computer Science degree, and committed to investing at least US$5 million annually in carbon sequestration.
It has also suggested a commitment to decent work, through a requirement for fulfillment partners to offer fair pay to workers, recognized the value of diversity and an inclusive culture for better product design and talent attraction, and demonstrated an appetite for self-regulation, banning Breitbart and the Proud Boys (after some initial controversy) and closing more than 5,000 stores earlier this year that violated its code of conduct. Shopify has positioned itself as a company that provides value to its workers, consumers, the environment, and the communities it operates in, as well as its shareholders.
In this moment of renewal and recalibration, public expectations are shifting, pushing the bar for responsible innovation higher.
As Shopify rapidly expands its business model—including through new lending and payment products, enhanced warehousing and distribution services, a new film and TV production company, and integrations with other large tech companies like Facebook, Amazon, Google, Apple, and Walmart, —will its commitments to socially responsible practices keep pace?
We suggest three opportunities for Shopify to model what it means to be a socially responsible tech company as we head into 2021.
Shopify could break new ground by embedding social responsibility into its governance structure. The company could, for example, proactively establish a meaningful, independent oversight board (learning from fraught experiments at Google and Facebook), and make room for worker and merchant representation on its corporate board. It could even go so far as to add a social impact mandate into its articles of incorporation.
Recognizing that Canada’s tech sector is characterized by significant participation and pay gaps for BIPOC and women, Shopify could ground its aspirations for greater diversity and inclusion in robust public reporting on recruitment, hiring, pay and promotions. It could also enhance accountability by reporting on the demographics of its business clients, as well as on the groups that are not accessing the company’s products, services, or digital storefront initiatives. This could inform Shopify's strategies for extending into new markets and designing products that are more inclusive and widely accessible.
Finally, the company could consider the power of proactive disclosure related to merchants that have been banned. As social media platforms struggle to combat misinformation, Shopify could further differentiate itself by introducing detailed annual reporting on which merchants have been banned or deactivated, and why. Allowing researchers and journalists to access this information could be transformative in tracking the economics of misinformation and hate.
Of course, Shopify can’t be expected to redefine Big Tech on its own, or to self-regulate.
Governments have a critical role to play, as regulators, partners and funders, in raising the standards for all tech companies. As Canada's federal government plans for a recovery that will bring about a more sustainable, inclusive and equitable economy, it should be looking closely at the role of Canada's leading tech companies in helping us get there. Policy makers, Shopify and the tech companies aspiring to follow in its footsteps should seize the opportunity to set a higher standard for responsible innovation—a made-in-Canada standard that both challenges the harmful norms of Big Tech and learns from them.
📸 snapshot of opportunity areas
Embed social responsibility into corporate governance structure;
Robust public reporting on hiring, pay, promotions and under-served demographics;
Consider the power of proactive disclosure re: banned merchants.
🤔 another question
Should we be concerned about concurrent Shopify integrations with large tech companies like Facebook, Amazon, Google, Apple, Walmart, Pinterest, Libra Association and Instagram, many of which have themselves come under scrutiny for issues ranging from anti-competitive behaviour, to problematic data use, to inconsistent or harmful content policies?
⛳ a final flag
Shopify’s growing dominance could eventually make it difficult for other e-commerce platforms to compete, and while the company’s tools are helping businesses launch digital storefronts, reach new markets, fulfill orders, and manage payments + logistics, this dependence could lead to problematic power imbalances down the road.
💅 Sarah Doyle’s experience and passion for public policy led her to the Brookfield Institute for Innovation + Entrepreneurship (BII+E), where she is the Director of Policy + Research. In this role, Sarah leads the development of the Institute’s research agenda and oversees the work of the Institute’s policy team.
🤓Vass Bednar is a smart generalist working at the intersection of technology and public policy.