The ‘move fast and break things’ ethos that epitomized Silicon Valley business culture for much of the 21st century’s first decade has fundamentally changed the global economy. For evidence of this, look no further than the French start-up, Guppy, which was launched in late 2018 to dredge discarded electric rental scooters out of the River Seine. In just one day this past summer, Guppy workers fished more than 50 shared mobility devices out of the river. Now, Paris is regulating its scooter fleet.
The World Economic Forum has dubbed this unique period in the evolution of business the Fourth Industrial Revolution – a moment in time when increased automation, artificial intelligence (AI) and continued technological disruption will fundamentally change the way we live, work and relate to one another. Accordingly, just as we have seen with previous business revolutions, there will be many intended and unintended consequences that come with each step forward on this journey. The challenge, of course, for those of us living, working and forging a path through this period of radical change is how to stay on the right side of history when the rules of engagement are changing so rapidly.
The World Economic Forum was the first to draw the world’s attention to the Fourth Industrial Revolution, the current period of unprecedented change driven by rapid technological advances. Policies, norms and regulations have not been able to keep up with the pace of innovation, creating a growing need to fill this gap.
From a purely economic standpoint, there is some logic to these tax proposals. As ever-larger portions of our collective consumption are transmitted digitally, the idea of taxing these transactions based on the location in which they are consumed rather than the location where they originate is fairly logical. In practice, however, the idea of dozens of different nations enacting their own tax laws to capture revenue from multinational tech companies with locations all over the world is a recipe for massive conflict.
The global trade standoff was eventually averted, but the uncertainty still lingers for multinational technology companies who have been left juggling a global patchwork of new digital tax laws, potential government standoffs over said tax laws and the constant need to project future growth accurately while all of the inputs keep changing.
And that’s just one line item on the tax ledger. Add the barrage of new regulatory requirements coming from all corners, the constant development of new technologies and the mounting need for new skillsets to manage it all and the scale of the challenge starts to become clearer.
We’ve been on the front lines of this revolution at Thomson Reuters. Our core client base of tax and accounting and legal professionals have seen their industries fundamentally disrupted by new technology and rapid-fire regulatory change. For some, the process has been painful. For others, it has created huge opportunities. The difference between the two: agility.
Across countless examples, the one universal truth we continually see proven as we march through the early days of the Fourth Industrial Revolution is that start-ups and incumbents who have the agility to seize new technologies and scale rapidly to adopt new ways of doing things are the ones who thrive – no matter what comes around the next corner.
This content was originally published here.