World View: Who can you trust online?

December 15, 2000

The US and Japan need to boost public confidence in e-business if it is to thrive, writes Dorothy Zinberg

What constitutes trust in everyday life? One of the no-answer topics on which one can pontificate endlessly, trust - or more precisely trustworthiness - is emerging as an issue in an increasingly e-commerce-driven environment.

How can safeguards be put in place for conducting business online when traditional clues of setting, handshakes and eye contact, have disappeared into the faceless vacuum of the internet? Will technology-driven globalisation force the revision of culturally diverse behaviour and values into a universal mould?

Americans and Japanese, as the two largest users of the internet, see their commercial futures deeply tied to the successful adoption of electronic commerce. Almost 100 opinion leaders met at the Japan Society in New York this autumn, to discuss "Japanese Culture and Business Globalisation in IT" under the aegis of the Centre for Global Communications at the International University of Japan, the Japan Society and the Japan Foundation.

It became apparent that the Japanese were less trusting of conducting business online than the Americans. This came as a surprise because so much of social science literature about Japan following the second world war depicted a society where belief in its institutions was deeply embedded in the culture. The Japanese people trusted businesses that provided its male citizens with lifetime employment.

During the same postwar period, a number of psychoanalysts began to incorporate cultural differences into their theories. Erik Erikson wrote that the capacity to trust is the first psychological task a growing infant has to complete. This capacity, he wrote, evolves out of the mutuality of a nurturing parent and social institutions that have to provide individuals with "continuing collective reassurances". Different cultures provide different clues. Culturally homogeneous Japan, with its well-ordered hierarchies and a strong father figure emperor, evolved into a society marked by deference.

Consequently, trust in authority has been a significant hallmark and, until recently, dictated Japanese attitudes and behaviour. The changes have come about from simultaneous disruptions to a way of life: the growing internationalisation of commerce and Japan's reluctant admission that it had to join forces in a global economy; the increasing international outlook of its foreign-educated professionals and Japan's recognition that to be a dominant player in the region, it had to educate foreign students in Japanese universities. The tipping point came with the collapse of a booming economy, which is beginning to return from the doldrums.

Americans could not be more different, although until the 1950s they too trusted the government and their employers. In both countries the move away from "trusting" or "having confidence in" has been gradual but persistent. Now the internet has been seen to use private information for commercial ends. With little assurance that security will prevail, the distrust has grown. In addition, prized global outreach sows social confusion by revealing that cultural cues, that are deeply ingrained during childhood, are no longer the only ones extant.

So it was not surprising to learn from Alan Westin, director of the Japan-United States Privacy and Data Protection Program, that distrust of e-commerce is rampant in the US and Japan. Where 65 per cent of Americans believe businesses are acting properly in their collection and protection of personal data, only one third of Japanese believe so and the majority of them are reluctant to use their credit cards online. Only one third of Japanese believe that existing laws and organisational practices in Japan "provide a reasonable level of consumer privacy today", while 59 per cent of Americans are satisfied.

On the larger issue of privacy and data protection, Americans are far more distrustful, but the numbers for both countries are very high. Ninety-four per cent of Americans are "concerned about the potential misuse of their personal information", compared with 77 per cent of Japanese. Some 81 per cent of Americans worry about threats to their privacy on the internet, while just 61 per cent of the Japanese do.

Americans are at work drafting federal legislation, state laws, and consumer protection for privacy. Japan has recognised the problem. A few corporate websites have put up adequate privacy notices and 150 Japanese companies have put up privacy seals. But only 12 per cent of the population claim that with privacy initiatives they would trust e-business, although more than 60 per cent of US users would. In neither country is consumer trust sufficient for e-business to progress unimpeded. In neither case are the numbers high enough to promise a thriving online economy.

The first step is to develop solid protective mechanisms so trust can be established. Every time we read that someone touched the wrong key and, as in the case of Kaiser Permanente, the health- care system mistakenly delivered 850 messages containing clients' confidential medical information to 17 people, distrust about business online is heightened.

For the Japanese, the challenge is even greater. They begin with a distrustful public in a culture where technology is forcing enormous changes in values. We are a long way from creating a universal mould of values, but the need to create a trustworthy online environment is already at the head of global e-commerce challenges because, despite the impediments, countries everywhere are striving to be part of what promises to be a major route to economic vitality, namely, the internet.

Dorothy S. Zinberg teaches at the Kennedy School of Government, Harvard University.

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