Ethel Hazelhurst
Rising digital connectivity had put both governments and corporates under close and “increasingly critical” scrutiny, business consultancy Control Risks said at a presentation in Johannesburg yesterday.
David Butler, Control Risks managing director for southern and east Africa, said that the eruption of social protests around the world was unlikely to subside because it was prompted by rising inequality and fuelled by scrutiny of governments and companies through social media.
A report from Control Risks said that a small number of European and American financial institutions – 0.5 percent of transnational companies – owned 40 percent of the total value of all transnationals.
Globalisation had also increased inequality, the report concluded.
In the US the share of national wealth controlled by the top 1 percent has doubled since the late 1970s to around 20 percent, while in China the wealth of the top 10 percent has increased three times faster than the average.
The report highlighted the role of internet connectivity and digital social media in fuelling discontent and mobilising protest.
“Citizens in most countries have greater access to information than ever before and they are using it to challenge official narratives, probe corporate activities, organise social opposition and mobilise disruptive demonstrations,” Butler said.
According to the Control Risks report, “over the last decade the proportion of people with internet access has quintupled and global bandwidth has grown exponentially to more than 60 000 gigabytes per second – more information than is contained in the combined text collections of the British Library and the US Library of Congress.”
It noted that social networks “are helping to convert this radical increase in connectivity into a platform for social and political activism”.
Connectivity and social networks have been instrumental in overthrowing governments in north Africa and the Middle East and have also been used effectively in the US and Germany, to determine political outcomes.
“For governments it has reduced tolerance for underperformance and mistreatment: national and international experiences are instantaneously shareable and comparable and disparities and injustices swiftly exposed and broadcast.”
There have also been implications for companies.
Butler said companies “have often been behind the curve in engaging stakeholders”.
Connectivity had increased reputational risk for companies, “evidenced by the swift demise of the UK tabloid News of the World after a Twitter campaign targeting its major advertisers”, the report said.
In July last year, the publisher’s owners, News Corporation, closed the newspaper, after allegations it was hacking into the cellphones of celebrities and crime victims.
While these developments were undermining the legitimacy of governments and corporates, the report said that social protest movements needed to worry about their own legitimacy.
On occasion, the behaviour of protesters “fails to generate broader public sympathy”.
The report noted: “If, as expected, social protest movements become more diverse and contested in the year ahead, the battle for public opinion will become increasingly critical.”