Google’s chief economist talks tech backlash, fake news and taxation
Should technology companies be charging and paying tax on advertising on their platforms? Find out what Google's chief economist Hal Varian says
TORONTO – Everywhere Google’s chief economist Hal Varian goes, people want to ask him what Google is working on.
He usually tells them “everything you can think of plus a lot more” because the tech giant has its hands in everything from internet searches to advertising, news and even autonomous vehicles.
As Google prepares to mark its 20th anniversary in Canada, Varian sat down with The Canadian Press on Wednesday to talk about the company, its role in the country and some of the technology sector’s most pressing challenges – fake news, automation, backlash against human dependence on devices and a growing debate around taxation.
What do you see as Google’s role in Canada?
Google is a huge facilitator. Canada is a country where exports are very important, particularly exports to the U.S. and so you want to make sure that your products are recognized there and the great thing about using Google for advertising is it can be so targeted. I once talked to a mathematician who built the best program in the world for a certain type of optimization. He said, “it’s a wonderful product, but there are only 100 users in the world. How do I find them?” So you type in mixed interger quadratic programming into Google and you get these nice academic papers and there’s an ad for his software. That’s specialized. The only medium you can effectively advertise on is a search medium.
Google put out a report with Deloitte this morning looking at its economic impact in Canada. Among other things, it said that Google search ads from Canadian businesses supported between $10.4 and $18.5 billion in economic activity or 112,000 to 200,000 full-time jobs. What was your big takeaway from the report?
One of the remarkable things for Canada in that report is that 35 per cent of all clicks are coming from outside of Canada. That means you are really reaching a global market and I haven’t seen that in the other reports (from other countries).
What other differences did you see between Canada and other markets?
There are probably more searches for hockey per capita than in say Hawaii.
Do you think Google should be threatened by some of the other social media players who are carving out a big advertising business themselves?
I think we are still king, but uneasy lies the head that wears the crown. We can’t be complacent about that. We keep looking at developments and we are expanding into lots of other technology areas, like autonomous vehicles, artificial intelligence and cloud computing.
Lately in Canada there has been a lot of discussion around whether technology companies should be charging and paying tax on advertising on their platforms. How do you feel about that?
I think that is up to Canada. If they draft a law that says advertising companies need to pay tax, of course we will pay. But right now, as I understand the situation, it is pretty ambiguous whether or not this tax is happening.
So it’s best left up to the government then?
Well, of course, to tax anything the government has to pass a bill or amend a bill that describes what is being taxed and how the data will be collected and how it will be remitted. You can’t just say send me a cheque.
Do you find one of the biggest challenges Google is facing is fake news?
Not so much on the ad side of things, (but) fake news on content that is trying to draw attention to itself for one reason or another. (When it comes to) people that advertise stuff that is bogus, we do a pretty good job of weeding out a lot of that stuff.
If you want to find spurious news about Hollywood gossip, you can go to the supermarket or you can go to YouTube. There’s a lot of that stuff around, but we try to control it so far as we can.
On Google News, we have a pretty carefully curated process to get people to legitimate news. It doesn’t always work. Things slip through, but by and large, it’s a pretty trustworthy sources, we think.
What is the biggest challenge facing the tech sector?
On the policy side of things, we hear the word techlash, like backlash against technology. People are saying the world is facing all these problems with fake news and hostile powers and exploitation of this and that. That is of course much more difficult to deal with because it is vague and amorphous.
Technology is changing quickly and things are happening and so there is a certain amount of anxiety, but I do believe that will be overcome as people learn the value of tech.
What should be done to help humanity overcome techlash?
You have to recognize there are changes going on. Those changes are primarily going help people live better, more productive, more useful and more stimulating lives, but you also have to build some controls over those things. It is the same with automobiles, with telephones, with steam engines.
What role do you think Google should have in the techlash?
The very first thing is understanding it and once we think we have an understanding of it, we think about policies that might be helpful in dealing with issues that could arise.
You have been working on a paper that recently touched on this and labour. Can you talk a bit about the major takeaways?
We’re going to see a significant decline in the labour force in the next 20 or 30 years basically because the baby boomers are retiring and what that means is you’ve got to produce more output to provide consumption opportunities for all those people. With the labour force declining, we are in good shape compared to countries like Japan, China, Korea, Taiwan, Germany, Italy, Spain, where they’re seeing quite significant declines. Without technology, without some increase in productivity, we’re in big trouble.
With those labour declines and Google looking into automation, will robots take over the world?
Robots are going to augment human labour for the most part. That is true with all of the technological advances, despite the anxiety that goes along with them. Augmenting labour gives you more jobs and less work, which is what most people are seeking.
This interview has been edited and condensed for clarity.