A look at America's evolving attitudes toward the tech industry and how they may affect the future of innovation and regulation.

1. The Techlash ParadoxLOVE & LOATHING OF AMERICA’S TECH INDUSTRY

2. 2
THE NEW
NORMAL?
2

3. 3
The Old World
For 30 years, America’s tech industry has enjoyed
an unparalleled reputation among Americans and
policymakers across the political spectrum.
Consumers were in love with the powerful new
internet services and happy to accept the terms
of services and privacy policies they didn’t even
read, let alone understand.
Meanwhile, policymakers and regulators were
careful to give companies the freedom to
innovate and avoided imposing significant
burdens that might slow investment or limit
startup activity.

4. 4
The New Normal?
But tech is no longer the underdog. Today, seven of
the top ten most valuable firms in the world are
tech companies.
Tech's favorability is plummeting and distrust is
growing. The result is that policymakers and
regulators are more skeptical than ever.
They have shifted from removing red tape to
holding tech companies and their leaders more
accountable.
How tech deals with this moment will determine
whether it will return to the role as America’s
darling or be scrutinized and potentially regulated.

5. 5
America Loves Tech (Still)
81%
INTERNET &
INNOVATION MADE LIFE
BETTER
MADE RELATIONSHIPS WITH
FAMILY/FRIENDS MORE IMPACTFUL
42%
Americans are still in love with the
internet and smartphones, and all the
amazing tools and services that they
enable.
POSITIVE/NEUTRAL OPINION
OF TECH INDUSTRY
81 %
The survey of 1,040 U.S. consumers was conducted by Survey Monkey from May 15-
22. The survey has a margin of error of +/- 3.5 at a 95 percent confidence level.

6. 6
51 %
INTERNET AND SOCIAL
MEDIA HAVE A NEGATIVE
IMPACT ON SOCIETY
POLICYMAKERS NOT
KEEPING UP WITH PACE OF
TECH CHANGE
72 %
NEED MORE REGULATIONS ON
INTERNET AND NEW TECHNOLOGIES
41%
TECHNOLOGY MAKING THE
GAP BETWEEN RICH AND POOR
WORSE
38%
Americans are increasingly fearful about the impact of new technologies like AI
and self-driving cars. Recent scandals have spurred criticism and concerns about
internet companies and other existing technology.
But Fears Are Emerging

7. 7
Distrust of Tech Companies Growing
49 %
PACE OF CHANGE TOO FAST AI, AVS AND ROBOTS WILL REDUCE
JOB OPPORTUNITIES FOR
AMERICANS
60%
WOULD NOT PROVIDE HIGHLY
PERSONAL INFORMATION TO
REDUCE COMMUTE
67 %
At the same time, recent revelations about Fake News and privacy
breaches show Americans and American regulators have lost trust in
tech companies to protect their data, their jobs or their democracy.

8. INVESTMENT
TRENDS
8

9. 9
2017 U.S. VENTURE CAPITAL
SPENDING
$17.6 Billion
Invested
REGULATED & TRUST-CRITICAL
INDUSTRIES
• Robotics, Drones and Automation
• Transportation
• Smart Cities and IoT
• Digital Health
• Blockchain
• Augmented Reality
30 %
The trust gap is a threat to the future of the entire industry.
Tech Betting its Future on Trust
Based on Crunchbase data for Venture Capital in 2017 as analyzed by Vrge Analytics.

10. 10
6 Major Investment Trends
Blockchain
$883 M
Transportation
$1.3 B
Smart Cities
$2.24B
Robotics
$2.4 B
Digital Health
$6.342 B
Augmented Reality
$538 MIn 2017, six of the largest areas of investment
by VCs and large tech firms were in technologies
that are either highly regulated or raise
significant policy and social issues.
Based on Crunchbase data for Venture Capital in 2017 as analyzed by Vrge Analytics.

11. 11
Disruption Threat Vectors
SOCIAL
ANGST
Truly innovative technologies
and business models often
run up against existing social
and cultural norms and
expectations.
POLICY
CHALLENGES
As tech seeks to disrupt highly
regulated industries, the policy
hurdles grow more challenging.
BUSINESS
CONFLICT
New businesses models are
likely to face litigation,
negative media and other types
of business conflict.

12. 12
Robots with Jobs
Will robots create or destroy jobs?
Policymakers want the answer to this
question and could regulate the industry
away if they don’t like what they find.
BUSINESS CONFLICT – MEDIUM
These challenges will primarily comprise of smaller
battles over technology standards, IP and use of
public goods.
SOCIAL ANGST – HIGH
Robots, drones and AI are already meeting massive
social and cultural challenges that are unlikely to
let up anytime soon.
POLICY CHALLENGES – HIGH
Regulatory battles are well underway, and the
industry will be mired in long term challenges on
the regulatory and policy front.

13. 13
SKIES
Aerial drones are hard at
work in Australia, New
Zealand and Europe,
while regulatory
roadblocks and safety
concerns are keeping
them grounded in the U.S.
FARMS
Across the board, there
is increased investment
in agricultural robots
that monitor crops,
manage pests, fertilize
and harvest more
efficiently.
AISLES
Retailers and corporate
offices are testing
robots that work
alongside humans to
improve efficiency, but
this is creating jobs and
safety concerns.
SIDEWALKS
City sidewalks are a
major battleground for
testing delivery robots
with concerns over
public space, data
ownership and jobs.
Growth Trends

14. 14
ROBOTS TAKING JOBS
Companies must demonstrate how these new ecosystems
will be net creators of quality jobs by identifying the new
opportunities created by connecting customers and
services.
SKYNET IS NOT COMING
Companies have an obligation to explain how humans and
robots will work together in a way that does not evoke The
Terminator. And please don’t forget to include humans
in commercials and marketing. Automated assembly
lines might look great on camera, but they don't resonate
with consumers.
STANDARDIZING STANDARDS
Companies must engage with regulatory bodies and
policymakers early in the process to ensure constructive
dialogue about the technical details of standards.
BAN THE BAN
In cities and other jurisdictions
considering robot delivery bans, it’s key
to create a story and a local footprint to
demonstrate how a given program helps
the community and supports the local
economy and jobs.
FUTURE OF WORK
This is a conversation that goes beyond
any one company, and business leaders
have to engage in a dialogue about the
future of work.
Regulatory Flashpoints

15. 15
2018
GUIDELINES
Guidance for managing drones is expected from the FAA & NASA.
PRIVACY REGULATIONS
California has some 25 privacy bills, and states like Washington,
Oregon and New York aren’t far behind.
PERMITTING SYSTEM
In lieu of a ban, San Francisco has a challenging and
time-consuming permitting process that could easily be
replicated elsewhere.
TAXATION
California has already proposed a tax on robots, and more states
are considering this option.
BANS
More bans – like the one that nearly passed in San Francisco – are
likely to crop up around the country .
2019 & Beyond
DATA GOVERNANCE
Privacy issues are already on the table, and in the long term rules will
develop to govern the data captured in the connected future.
UNIONIZATION
“New collar” jobs programming, operating and managing fleets of
robots are likely to unionize, just like their less-technical predecessors.
REDESIGN OF SOCIAL SERVICES
From portable benefits to universal basic income, AI is expediting the
need to reimagine government services and the social safety net.
PERSONHOOD
While civil rights for robots is much further down the road, the
European Parliament has already begun considering the “personhood”
and legal ethics of robots.
Milestones

16. 16
Transportation
How do we ensure the physical safety and
privacy of passengers and pedestrians in the
era of autonomous vehicles?
Policymakers need the answer to this
question before they’ll get on board
with the transportation revolution.
BUSINESS CONFLICT – HIGH
The race to have the first mass market
autonomous vehicle is already underway with
poaching of talent and IP court battles.
SOCIAL ANGST – HIGH
America is a car culture. Shifting to autonomous,
electric and shared vehicles will take years if not
decades.
POLICY CHALLENGES – MEDIUM
High-profile accidents have and will continue to
occur, leading to long-term battles on the legal,
regulatory and policy fronts.

17. 17
FREIGHT
Truckers and labor unions
have significant concerns
about the impacts on jobs
and safety.
PUBLIC
TRANSPORTATION
Autonomous technology
could change the way
cities move people and
reduce congestion.
LOCAL DELIVERY
Emerging and legacy
delivery services are
investing in AVs to make
delivery cleaner and
more efficient.
PERSONAL
MOBILITY
Self-driving cars
for personal use are rife
with safety and
technological challenges.
Growth Trends

18. 18
LOCAL INFRASTRUCTURE
A 5G network that reaches every corner of the
country is necessary to connect vehicles safely and
consistently. Companies must work across
industries and borders to ensure universal 5G
rollout.
SECURITY AND PRIVACY
Companies have an obligation to ensure privacy
and security for passengers.
REACTIONARY REGULATION
Following recent crashes, companies need to illustrate
safety is a top concern and show city, state and federal
legislators and regulators data to prove it.
TESTING PROGRAMS
Companies should also work closely with legislators
and regulators to create smart rules for test programs
and long-term deployment.
Regulatory Flashpoints

19. 19
2018 2019 & Beyond
INFRASTRUCTURE
In the coming months, the FCC will issue recommendations on 5G
expansion and distribution, and the Volkswagen settlement will
provide states with the capital for electric vehicle charging corridors.
DATA GOVERNANCE
A hackable car is a deadly car. Hacked national transportation
networks could be catastrophic.
PUBLIC / PRIVATE PARTNERSHIPS
As companies partner with cities to test autonomous vehicle
programs in urban environments, new battles will crop up between
companies – and cities – with different visions.
REGULATORY FRAMEWORKS
Michigan, California and Arizona have already created regulatory
frameworks for self-driving cars, and more states are expected to
follow in 2018.
NATIONAL SECURITY
As the debate over national security in the modern age continues,
autonomous vehicles and the electric grid will become a central concern.
LABOR CONFLICTS
Autonomous fleets have the potential to put an entire class of drivers out of
work, which will create a rift with powerful labor unions.
DIGITAL DIVIDE 3.0
As self-driving cars begin to supplant traditional vehicles, we’ll have to
answer questions related to inclusivity and equitable access.
Milestones

20. 20
BUSINESS CONFLICT – LOW
The battles have already begun for contracts to
provide the tech infrastructure for smart cities.
SOCIAL ANGST – MEDIUM
Americans are hesitant to share data for the
automation of city functions.
POLICY CHALLENGES – HIGH
With security and privacy concerns heightened,
smart city tech will receive significant oversight.
Cities Get Smart
Are Smart Cities just a mirage or will
government and business work together to
build radically different cities of the future?
Instead of waiting for organic growth
and evolution, technology companies
are creating their own smart cities.
Whether viable or not
long-term, tech clearly sees cities as
their next customers and products.

21. 21
5G
5G is the foundational
infrastructure for smart cities,
but businesses and government
alike are fearful deployment will
create a further digital divide.
SENSORS
Companies are using sensors to
collect massive amounts of data,
but growing privacy concerns will
force businesses to evaluate
how they mine and share
personal information.
SMART GRIDS
Smart grids hold huge potential to
improve city efficiency, but they may
be vulnerable to cyber threats.
Growth Trends

22. 22
DIGITAL DIVIDE
Companies must invest in underserved and
disadvantaged communities and work with
policymakers and city officials to ensure
equitable access.
GOVERNMENT PROCUREMENT
Governments must avoid blunders with
procurement where millions are spent
on the rollout of new technologies that
never go online.
CRISIS OF CONFIDENCE
Businesses should continue partnering with
governments to explain the value of smart
technologies to citizens.
DATA MANAGEMENT
Companies must develop transparent principles for
sharing and protecting data while working with
policymakers to leverage this data to improve cities.
Regulatory Flashpoints

23. 23
2018 2019 & Beyond
WIRELESS UPDATE
In the coming months, the FCC will issue recommendations on 5G
expansion and distribution. On the state-level, 17 state governments
have discussed the quickest ways to deploy 5G in their backyards.
INFRASTRUCTURE
Federal infrastructure spending, if enacted, could provide a massive
boost to the framework smart cities will need in order to thrive.
RIGHT TO KNOW
Twelve states have proposed legislation that addresses the rights of
consumers with regard to the collection and use of personal
information by companies.
BIG BROTHER 3.0
Does a connected world requiring giving up the right to privacy? Ignoring
the privacy implications could lead to significant pressure to regulate.
SHARING OF INFORMATION
Codifying private-public data sharing and access will be a key policy fight to
watch for in the next few years.
MACHINE ETHICS & AI
The massive amounts of data collected by connected things in cities will
result in trillions of data points that need to be processed and understood.
Milestones

24. 24
Digital Healthcare
Will digital health disruptors finally gain a
foothold in the $3.3 trillion U.S. healthcare
industry and force meaningful change?
Digital healthcare technologies face
significant regulatory and institutional
hurdles, but momentum is building
through pressure to control healthcare
costs, evolving consumer expectations
and opportunities to leverage big
data and AI in healthcare.
BUSINESS CONFLICT – HIGH
The largest challenge for digital health is
navigating existing institutional interests.
SOCIAL ANGST – MEDIUM
Digital health tech that relies on big data and AI
will face consumer concerns.
POLICY CHALLENGES – HIGH
The transition from wellness to healthcare
requires major regulatory and policy changes.

25. 25
WELLNESS &
WEARABLES
Wellness allows
companies to sidestep
gatekeepers and
regulation and sell
directly to consumers.
AI &
PERSONALIZATION
Big data and AI open up
new possibilities for
personalized treatment,
pharmaceutical
innovations and more.
TELEMEDICINE
Telemedicine can play a
major role in addressing
healthcare costs and rural
doctor shortages.
PATIENT
ENGAGEMENT
Growing consumer
expectations are forcing
doctors and institutions
to modernize the way
they work with patients.
Growth Trends

26. 26
INCONSISTENT & INCOMPATIBLE DATA
Most healthcare data is locked in incompatible formats.
To leverage this data, the healthcare industry and
policymakers must implement a standardized format
for electronic health records (EHRs).
MEDICAL DATA IS HEAVILY REGULATED
Medical data is (rightly) regulated under federal laws
like HIPAA. The healthcare industry, academia and
government still have a long way to go in finding
privacy-centric solutions.
THE POLITICS OF PAYMENTS
In the U.S. healthcare system, the patient is
rarely the customer. To be successful, companies
must navigate the complex incentive system
between insurance companies, hospitals and
providers to encourage adoption.
VC TIME VS. HEALTHCARE TIME
VCs must align their growth expectations to the
pace of the more regulated healthcare industry.
Regulatory Flashpoints

27. 27
CHANGES TO CMS REIMBURSEMENT
Ongoing initiatives within the Centers for Medicare &
Medicaid Services (CMS) will define how doctors are
reimbursed for digital health services.
MyHealthEData Initiative
CMS is pushing a major effort to remove interoperability
barriers for electronic health records.
CVS & AETNA MERGER
The mega merger could help shake up
incentives throughout the industry.
GDPR IMPLMENTATION
The implementation of this international privacy
agreement in Europe could impact digital health in the
United States.
PRIVACY
Any major breach in sensitive healthcare data will
raise serious questions for the industry and likely
force changes to the widely adopted business
models that rely on collecting and sharing data .
INTEROPERABILITY BATTLES
Despite the best intentions of government and
nonprofits, major EHR players will likely attempt to
thwart adoption of open standards.
ETHICAL QUESTIONS
The accumulation of massive amounts of medical
and genetic data will force a conversation about
the boundaries for its use.
Milestones
2018 2019 & Beyond

28. 28
Blockchain
Are cryptocurrencies a scam or the next internet?
BUSINESS CONFLICT – MEDIUM
Blockchain technology and cryptocurrencies
threaten many big industry players.
SOCIAL ANGST – HIGH
Cryptocurrencies require a mainstream
change in social and financial behavior to
allow for wider adoption.
POLICY CHALLENGES – HIGH
Rising levels of abuse and the shift from
hobbyists to the profit-driven mainstream will
put blockchain in the regulatory crosshairs.
Most people have never heard of blockchain, but
they are familiar with its first and most famous use
case: Bitcoin. As more and more cryptocurrencies
develop, misinformation, scams and bad actors have
dominated the narrative.
Can blockchain developers shift public perception
to realize the potential of the underlying
technology?

29. 29
INITIAL COIN
OFFERINGS (ICOs)
ICOs promise access to a future
technology platform in
exchange for funding
blockchain technology projects.
BLOCKCHAIN BEYOND
COINS
Blockchain technology is being
explored as a solution to manage
everything from real estate titles to
defense logistics.
CRYPTOCURRENCIES
Since the introduction of Bitcoin,
more than a thousand coins and
tokens have been put into
circulation.
Growth Trends

30. 30
SCAMS, HACKS & FRAUD
ICO’s have proven to be a powerful potential
fundraising vehicle for startups, but the
unregulated process has attracted scammers,
hackers, con artists and other criminal actors.
With increased government scrutiny, there’s a
danger that legitimate players get harmed by
regulatory overreach.
CURRENCY SPECULATION
With so much attention on Bitcoin and other
currencies, a collapse in the cryptocurrency
market could have a chilling effect on blockchain
innovation.
SECURITIES VS. COMMODITIES
How the SEC and CFTC resolve questions of
how to and whether to regulate tradable
tokens as securities, commodities or a
hybrid could determine whether investment
and innovation stays in the U.S. or is pushed
to unregulated markets overseas.
TAX EVASION
The IRS treats cryptocurrency as property
and has been cracking down on those who
don’t pay taxes on their trades/purchases.
More clarity from the IRS and a potential
exemption for low-dollar holdings is needed.
Regulatory Flashpoints

31. 31
ENFORCEMENT & OVERSIGHT
Regulators such as the SEC, CFTC and IRS have ramped
up enforcement, oversight and investigations into the
blockchain tech and cryptocurrency space over the last
six months, a trend that is sure to continue.
SAFT CRACKDOWN
Startups are experimenting with raising money from VCs
through the presale of new cryptocurrency tokens, known
as a Simple Agreement for Future Tokens (SAFT). The
SEC has publicly questioned whether these agreements
are compliant with investor protection laws.
STATE LEGISLATION
States are also deciding how best to employ blockchain technology and
regulatie digital currencies.
FEDERAL LEGISLATION
Congress is exploring ways to address blockchain and cryptocurrencies
including by preventing the illicit use of cryptocurrencies, creating
regulatory certainty and opening up new opportunities for blockchain.
REGULATORY RULYINGS
The Securities and Exchange Commission and U.S. Commodity Futures
Trading Commission will determine the final rules for coins and tokens.
Milestones
2018 2019 & Beyond

32. 32
Augmented Reality
Will augmented reality go mainstream or remain a
niche technology?
The AR industry kicked into high gear in
2017 with the launch of several platforms
for developers to build apps quickly
without extensive coding skills.
Long-term, questions about data
collection, privacy and security will be of
top concern.
BUSINESS CONFLICT – MEDIUM
Tensions simmer between intellectual
property rights and technology standards.
SOCIAL ANGST – LOW
Concerns about how AR-enabled
products collect data.
POLICY CHALLENGES – LOW
Policymakers will be on the lookout for early
case studies on how AR is being used to
collect consumer data.

33. 33
HEADSETS
AR applications could
help the market for smart
glasses and headsets
finally take off.
FACIAL
RECOGNITION
Facial-recognition on
smartphones has
exploded - 900 million
AR-enabled devices are
expected by 2019.
RETAIL
ADOPTION
Retail stores are exploring
how to leverage AR to
enhance the in-store
shopping experience.
WORKFORCE
TRAINING
A wide range of industries
- from auto repair shops to
hospitals - are leveraging
AR for workforce training.
Growth Trends

34. 34
DATA PRIVACY
AR has the potential to track and store personally identifiable
data. Companies need to develop transparent policies for data
collection and be forthcoming with policymakers about how they
collect and use data.
EFFECTS ON CHILDREN
AR has significant potential for education and skills development,
but researchers know very little about how AR affects early
childhood development. AR product developers must respond by
developing safeguards for children.
SAFETY
AR developers must establish consumer safety best practices and
forge partnerships with cybersecurity groups to ensure there are
industry-wide security standards.
Regulatory Flashpoints

35. 35
2018 2019 & Beyond
PUBLIC PERMITS GUIDELINES
Local governments in cities such as
Milwaukee are considering legal cases
about whether AR publishers need to get
permits if their apps spur users to meet
in public areas. Think: regulating
Pokémon Go! out of cemeteries.
PRIVACY REGULATIONS
California has 25 different pieces of
privacy legislation and other states are
following close behind.
INTELLECTUAL PROPERTY DEBATES
While privacy and safety are front in
center in the short-term, long-term issues
include how real-world IP rights apply to
virtual environments.
WORKPLACE POLICIES
HR Departments are updating policies
and determining how and to what
extent employees can use AR
products in the office
BANS AT PRIVATE BUSINESSES
When Google Glass launched, it was
banned in many private
businesses. With a wave of new AR-
enabled products hitting the
market, business owners may consider
new limitations on AR wearables.
Milestones

36. A PATH
FORWARD
36

37. 37
Innovation Policy Lifecycle
EXCITEMENT
Innovation captivates
the imagination and a
company can do no
wrong
INDIFFERENCE
Becomes part of daily life,
but may start to
accumulate consumer
concerns
SCRUTINY
Singled out for
policy scrutiny
REGULATION
Business practices in
crosshairs of regulators,
Congress and/or states

38. 38
Disruption Policy Lifecycle
DISRUPTION
Interest in disruptive
solutions by consumers
and media
REACTION
Legacy industry
pushback
SCRUTINY
Regulators
prompted by legacy
firms and 3rd
parties to scrutinize
RETALIATION
New rules proposed to
hamstring business
model and litigation
launched by legacy
competitors

39. 39
Move Fast/Break Things is Dead
In the past, efforts to sidestep,
ignore and push the bounds of
law were wildly successful in
getting tech companies off the
ground. Over time, many in
Silicon Valley adopted the
strategy for their own disruptive
technologies with some success.
The recent scooter debacle in San
Francisco is evidence that this
model for disruption is no longer
viable, particularly in highly
regulated industries.

40. 40
A Better Approach
1. MAP YOUR DISRUPTION
Get a broader understanding of the regulatory, business and
social landscape and potential pitfalls upfront.
2. GIVE A DAMN
Tech leaders don’t need all the answers, but they must
demonstrate sincere interest and a thoughtful approach to
the potential for abuse, criminal activity, and other negative
consequences of their products and/or platforms.
3. CRAFT YOUR STORY
Build your narrative in a way that demonstrates why your
company is helping create jobs and economic opportunities.
4. ENGAGE EARLY, ENGAGE OFTEN
The value of proactive engagement and sharing of your story
with government, media, investors, partners and other key
audiences cannot be overstated.
5. MAKE FRIENDS AND ALLIES
Start with trade association and think tanks.