Chapter 1 Introduction

The modern age is marked by a deep-rooted belief in the merits of technological innovation for human wellbeing and evolution. Ever since the thirteenth century, when the word innovare was first used by the German monk Albertus Magnus, humanity has been driven by the belief that new tools and new production and building techniques foster human advance. "No empire, no religion, no heavenly body can have a more fundamental influence on human conduct . than these mechanical inventions," said Francis Bacon (1561-1626) at the dawn of the current Western civilization, expressing a maxim that gained tremendous global influence. New weaponry, machinery, transportation and health infrastructure, clocks, digitization and, lately, quantum computing have allowed humanity to accumulate such a degree of wealth and health that any critical doubting of the innovation culture is met with pushback by the established market forces. In contrast, newness is regarded as automatic goodness, and many of the world's major problems, mostly caused by technology, are now, we hope, equally able to be fixed by it.

Against this historical and cultural background, the digital transformation of production and society is embraced with little doubt as to its merits. The idea to digitally permeate everything that lives seems like natural advance. But do increased levels of production, government and household automation as well as digital mediation of social processes really lead to the almost linear form of continuous progress expected by our economic and political establishment? This book doubts that this is automatically the case. Instead, it starts from the hypothesis that technological transformation leads to progress, only if it is actively shaped to create positive human and social value. The digital fabric is like fire or electric energy: it bears great positive value potential for humanity. However, it unfolds this service to humanity only if it is used wisely. Otherwise, it can also scorch the cultural, spiritual and economic soil that it set out to enrich. Humanity can just as much stumble into a stage of unexpected regress with digitization, as fire can burn down a house. Only an active shaping of digital services for positive value creation (Figure 1.1) can turn the wheel in humanity's favor. This book is a guide on how this can be done.

Figure 1.1: Progress or regress through digitalization?

Technological progress: GDP or wellbeing?

Where do we stand today in terms of digital progress? So far, value creation is, often, primarily equated with monetary value. Economic systems worldwide and the theories catering to them equate the wealth of nations with financial utility. Gross domestic product (GDP) represents the monetary value of what is produced in a nation. And, from this monetary "value" perspective, digitalization has had extremely beneficial effects on all economies that manufacture goods and provide services. Digital automation allows companies to realize economies of scale, save significant production cost and increase work as well as capital productivity. Through corporate digital networks, especially ERP systems (like SAP), global markets can be served much more effectively out of one (instead of several costly) corporate headquarter, leading to positive GDP effects in all those countries where headquarters are based. At the corporate level, value in terms of profit soars when labor cost can be reduced or when costly office-rents are saved with home-office. Digital decision support systems speed up transactions and, thereby, the volume of what can be traded and managed. In this regard, the value creation curve triggered by digitalization (as depicted in Figure 1.1) has seen positive growth in the past four decades.

That said, the idea that "value" can be reduced in economics to a monetizable unit is increasingly being contested. The Gross National Happiness Index used by the state of Bhutan, for instance, has been an early frontrunner in the rising global awareness that GDP or monetary indices of production are not sufficient indicators for reflecting the value creation of nations or understanding the value of living conditions of individuals. In contrast, it has become clear that the wellbeing of people and the ability to sustain earthly resources is at least as important a value, if not more than monetary value.1 A shift has begun towards embracing politically and economically, what has been philosophically clear for a long time: that value creation is about the myriad qualities that foster human and environmental wellbeing, of which money is only one. Figure 1.1 should be understood in this way. In the future, positive progress through digitalization can only be achieved, if aggregate human and social value in terms of wellbeing is borne by digitalization. If there is no increase in aggregate value, regress may equally set in; so where do we stand today, if we view value creation through this prism?

To answer this question, wellbeing must be better defined than is currently the case. The World Happiness Report published by the United Nations Sustainable Development Solutions Network (SDSN) on an annual basis is a first step in this direction. It incorporates various values that are both perceived by human beings and borne by forms of government and national infrastructure, including freedom, generosity, health, social support, income and trustworthy governance (SDSN, 2022). But strictly speaking, the aggregate of these select values can only give a broad notion of what is really driving wellbeing at an individual level, since values and, indeed, wellbeing are deeply contextual. Thus, a person can be happy even if she is not free; or she may be very unhappy even if she is healthy and living in a salubrious environment. And, what about values such as knowledge, security or dignity? Are these not important for wellbeing? These critical questions do not aim to demean the effort of the United Nations SDSN. In contrast, the report is an important tool in raising governments' awareness for the kind of progress the world should embrace - one that is defined through human and social values. However, a robust definition of wellbeing should go further and recognize the contextual dependency of personal value perception. Life is good on a day-to-day basis, only if the contextual conditions in which human beings normally live are imbued with meaning and purpose; that is allowing for "valueception" in what one is doing, especially in one's community. At the same time, living conditions should not impede flourishing by bearing too many "negative value qualities," such as a lack of freedom to move, a lack of food or health support. What is encouraging or hampering wellbeing can depend on myriad positive or negative value qualities at a time, differing from one context to another. Thus, any shortlist or metric for value creation or wellbeing can only be understood as a snapshot and excerpt of a much more complex reality.

This book recognizes the complex contextual nature of values and value creation. It does not recommend that companies and governments concentrate only on a few value principles that they implement and measure across contexts or technologies. This kind of "solutionism" is not enough for understanding of values or ethical engineering covered by this book. Instead, this book serves as a guide to help companies and governmental institutions to envision the wide range of positive and negative value potentials or phenomena of desirability (and undesirability) associated with a new technology product or service they wish to launch. And, for each of these contexts and product technologies it advises innovation teams to anticipate, explore and understand the myriad value effects and consequences for wellbeing.

Technology projects in this book are likened to garden development projects (Figure 1.2): Each garden is different and changing, depending on climate, soil, landscape and purpose. Each garden has its own challenges. And, the only progress that can be achieved is that the existing value potentials of the ecosystem are intelligently understood and taken into account, so that a good and beautiful place can unfold, despite all remaining contingencies. A garden changes its value during season and over time. And, gardeners - just like engineers - need to adapt. Equipped with this understanding, innovation teams (gardeners) are encouraged to define context- and technology-specific "ethical value requirements (EVRs)," which are the context-sensitive criteria for a mindful and value-based IT system (or garden ) design and development.

Figure 1.2: VBE seeks to create IT gardens.

Progress or regress at the point of inflection in Figure 1.2 is determined by the degree to which innovation efforts are able to create IT gardens for humanity versus efficient, but hardly sustainable and livable machine-deserts (Figure 1.3).

Figure 1.3: Non value-based IT deserts.

IT gardens versus IT deserts

At the time of writing this book, a debate has emerged as to whether IT innovation and digitalization are actually leading to gardens or to human, social and environmental deserts. On one side,...