Yasheng Huang on Contact Tracing and Tech Adoption in America and Asia

Tom Lenard:

Hello and welcome back to the technology policy Institute’s podcast. Two think minimum. It’s Friday, April 24th, 2020 and I’m Tom Leonard, president emeritus and senior fellow at TPI, and I’m joined by Scott Walston, TPI’s president. Today we’re delighted to talk to Yasheng Huang. He is the Epic Foundation professor of international management and faculty director of action learning at the MIT Sloan School of Management. His previous appointments include faculty positions at the University of Michigan and Harvard Business School. Yasheng is currently involved in a number of research projects which sound fascinating in four broad areas. A book project titled the Nature of the Chinese State. Second, creating a complete database on historical technological inventions in China and collaboration with researchers at Tsinghua University. Also a project on food safety in China in systematic risk management approach and research on venture finance, production of scientific knowledge and work of the future in China.

Tom Lenard:

He has published numerous articles in academic journals and the media and 11 books in English and Chinese. Let’s start out by talking a little bit about the corona virus and the experience in China versus the experience in the U S. A day or two ago I was watching one of the morning business shows and I heard Jim Kramer say he was lamenting what he saw as the current, now that China has defeated Covid and the U S has been defeated by Covid. What do you think of that statement? Do you think that is, first of all, do you think that is the current narrative and is it true?

Yasheng Huang:

I don’t agree with that narrative, at least not completely. I don’t think we can say one single country can defeat Covid-19 [inaudible] every country has to defeat Covid-19. China now is beginning to have reinfections. Some of them are imported from Russia, and Singapore has also experienced a surge. Japan has also experienced their surge. The nature of the pandemic is such that this is just not something that a single country can deal with. So I’m not as optimistic about China as this statement implies, but on the other hand we could also argue that they did have an effective response in terms of lockdown, in terms of shutdown, and they did contain the places where things relatively short period of time as compared with what’s going on in Italy and what’s going on in the United States. I think there are lessons there that we can learn from. There are also experiences that are not so encouraging about that system. So we should decompose this issue rather than having just one opinion about China.

Tom Lenard: 
So why don’t you go ahead and kind of decompose it. What are the lessons to be learned?

Yasheng Huang:

I think the lessons, the big lessons, are three. They could be more the big lessons are three. Why is that the Chinese system is terribly bad at uncovering and discovering new problems? And this is not just unique to covid 19. In 2002 2003 SARS crises, they let the problem escalate and then it got out of the country as well to Hong Kong, to Vietnam and then also to Canada. It didn’t reach the level of a pandemic only because of the nature of SARS, which is that it has a very high lethality rate, high mortality rate, transmission rate is relatively low. So the nature of that disease prevented SARS from becoming a global pandemic. But there are really some eerie similarities between covert 19 and SARS in the sense that early detections didn’t work. There was a lack of transparency in the early period and then the problem was allowed to go to the level that became extremely hard to contain and mitigate.

Yasheng Huang:

Right? So that’s the first lesson that we are to recognize. So I will say to those people who praise China, let’s not forget that a system like that let the cat out of the bag. Any appraisal of what it was able to accomplish later on has to be recognized together with that, letting the cat out of the bag reality. Right? The second one is mitigation and containment. And there, you know, once you let the cat out of the bag, the system that turned out to be quite effective and efficient, brutally efficient, in fact, because it is an authoritarian system. And it also has a long history, long culture of compliance and they locked down the city of Wuhan 11 million people and then [another] province 59 million people in a way that it’s hard to imagine doing the same thing in a democracy. As we know, in the U.S., even now the total number of the cases is reaching, you know, 800,000.  We’re still debating about shelter in place policies and there are still protests against the policy.

Yasheng Huang:

You don’t have to worry about that in China. So because of that ability to impose essentially total lockdown, stop the chains of the transmission very, very quickly. So if you look at the flattening of the curve, it happened about three weeks after they locked down Wuhan. And so it was quite effective. And then, at least according to the official number, and we can come back to say whether or not the official number is the right one. The total number of the cases is 82,000 right? As compared with 800,000, and China has four times the population as the United States. The third lesson I would argue is technology can play a very important role. Big data can play a very important role and this is what we wrote in the Harvard Business Review about the use of technology, not just in China but also in Singapore and South Korea, in Taiwan, Hong Kong.

Yasheng Huang:

So there is a very important role of technology. So this isn’t separate from medicine, which is treatment and vaccine. There’s no question that science in the end is going to be our savior. But before we get there, before we get to the vaccine and treatment technology in terms of contacts tracing in terms of collecting information can also play a very important role. But that’s predicated on having certain cultures in place, having certain relationships between government and business in place and I think to replicate those in the United States will be harder. And so I’m not advocating the East Asian model necessarily. All I’m saying is that we should have a serious debate about the issues about privacy vis-a-vis public safety, the issues about the role of the government in an emergency situation. So I would see these three issues, right? So discovering the problem, mitigating the problem and containing the problem through technology. These are the three big lessons.

Scott Wallsten:

It sounds like only number three is really something that we can act on though, right? I mean we’re not going to change the way China operates and so we’re kind of at their mercy in some sense because they aren’t going to be free with information. And so the oppressive system creates the, or makes it more likely that a virus can escape. And a democracy makes it harder to fight the virus and so it seems like three though. The role of technology and data is main tool that we have. Is that what you think?

Yasheng Huang:

Yeah, I agree with that. I definitely think that technology piece is one that we have a huge capability in, so I’m not going to say that we have better capabilities than China because in this episode, Chinese companies have shown that they are extremely capable, but definitely United States is second to none in that area. But even the technology piece is not just about writing codes and software and things like that. It’s actually the technical issues are almost secondary. The primary issues are, you know, to what extent you can protect the privacy of the users of the technology while achieving the same level of effectiveness. Right. I think at this point I can only ask the question. I don’t think we have the answer to that. My own view is that there is a trade-off between the two. The effectiveness vis-a-vis privacy. Whether or not we should sacrifice privacy for the sake of effectiveness is something we need to debate.

Yasheng Huang:

I believe that we ought to debate that issue rather than just saying, Oh, it’s bad for privacy, we don’t do anything about it. I think that’s a bad attitude. On the other hand, not on the other hand, but the related with that is the issue of the role of the government in deploying the technology. One thing we know about covid-19 is it has high transmission rate, which means that you have to do these things quickly, you have to implement mitigation measures, you have to implement contact tracing measures very, very quickly in real time. So that means our adoption of an app of a contact tracing app has to be almost instantaneous and universal for that to be effective. Right. I mean, as we know that no technology that we know of, even the magic iPhone when it came out in 2008, is adopted within three weeks.

Right. So the natural rate of the adoption may not work in a crisis scenario. You know, so I don’t know what the alternative is. All I’m saying is that we cannot depend on the national rate of the adoption.

Scott Wallsten: 

But how did South Korea manage that because that is more or less what they did. Right? 

Yasheng Huang: 

Well, but there’s a background factor, right? The Korean culture, the South Korean culture, is more of a trusting culture of the government. So when the government says that, okay, we recommend this technology, people tend to say, okay, so this is good for us. But people, the first question people ask is not going to be oh the big brother is getting my information and they’re going to arrest me next week. That’s not the first question they ask. The first question they ask is okay, because they recommend it, therefore that in and of itself suggests it is good for me.

Yasheng Huang:

That’s a very different mental model. Right. And that’s not really necessarily a function of the political system. It’s probably a function of just societal trust in the government, which sadly speaking, we don’t have a lot of in this country. And so my coauthors and I are thinking about this issue and we sort of gravitate toward the idea maybe in the next crisis we should delegate that to a public institution in the United States that’s most trusted by the public. Opinion survey shows that the most trusted public institution in the U.S.  is the military. You know? So it may be we trust the military more than we trust the Congress. But Scott, I do want to go back to your initial observation, which is only three is relevant. I also think number one is relevant. We are a democracy. We ought to have this advantage in uncovering and discovering the problem early on.

Yasheng Huang:

What has failed in the United States is not democracy, but leadership. The leadership has failed. The reason why I say it’s not a democracy that has failed, but the leadership has failed is because now we know within the white house, within the administration, there were memos. They were opinions, they were alerts, they were warnings about the potential contagion to the United States. So the democracy actually works in terms of producing those early alerts and warnings, right? Nobody got arrested simply because he or she sounded the alert. Dr Fauci you know, I listened to him and he talks about the dangers very early on, now it’s a failure of the leadership because, because the leader chose not to pay attention to the information. So we cannot quite blame the system. We have to blame the leader and we have a bad leader.

Tom Lenard:

So getting back to the third phase, the contact point, which involves contact tracing. So I mean I was struck by a reading recently about this Kaiser Family Foundation poll of people about whether the, you know, what they were doing in terms of downloading this app and in this country, barely 50% of the population said they would download the app, assuming even if the only use of the app was to alert them that they had come into contact with somebody who was infectious. So it wasn’t even, as far as I understood the question, it wasn’t even a question of sharing their information. There was a question of getting information that might help them protect themselves and their family. And still there was only roughly 50% who said they would download the app. So if you look at the Apple-Google proposal, which calls for voluntary downloading of the app on an opt in basis? Unusual? I don’t know. My intuition is that fewer people would actually download an app than say they would download an app in a survey. But I don’t know. I don’t know if that’s true or not, but how successful would a complete in this country with a kind of a completely voluntary system be voluntary opt in system…for such a system to work, you really have to have pretty widespread adoption, don’t you?

Yasheng Huang:

Absolutely. It has to be nearly universal or universal to have it work. Right? So maybe it doesn’t have to be 100% but 80 or 75% I think they’re two problems that I see. One is that we don’t have this level of trust in the government, which I know in other situations has guarded American society against tyranny, against bas politicians, Watergate and all of that. But we also don’t have a very high level of trust in big tech, right? Google, Facebook, Apple is probably viewed more positively. I don’t know, but Google, Facebook. And somehow you have a combination of two actors that are not highly trusted by the public. So I guess my issue is that when we say 50% people, only 50% people would opt in, we don’t really know whether the 50% the other 50% don’t opt in because of the privacy issues or because they don’t trust these bad actors. I mean these are two issues connected with each other because I may trust you and give you more information because I trust you. So my privacy concern is less so I think these two issues are intimately connected. So the larger issue going forward is how do we restore trust in government and in big tech companies.

Yasheng Huang:

Let me put out another competing value, which is democracy. Okay. There was a remarkable election that happened in South Korea, national election, legislature election. They were able to hold the election when the Covid-19 was still a real risk to the health of the Korean voters. And by the way, the turnout rate during the Covid- 19 in Korea was higher than the turnout rate in 2016 in the United States. So people were willing to line up to vote because they felt safe, right? It gave up some privacy. There’s no question about it, right? So I think we need to have a more sophisticated debate on privacy. That’s why we don’t want to trade privacy for greater power on the part of an authoritarian government. That will be a very bad thing. But are we willing to trade some privacy for safety? Are we willing to trade some privacy for the sake of holding elections?

Scott Wallsten: 

So for a country like the U S which has these problems of rapid technology adoption that you know we can’t do things the way Korea did. We have a leadership that doesn’t seem capable of building a coherent policy or an effective policy. Where does that leave us now? 

Yasheng Huang: 

Well okay, so there are two pieces to your question. I guess there are two answers to your question. We have poor leadership and the technology adoptions are not going to be as quick as in Korea, but we also know that social distancing is beginning to yield  results, right?

Yasheng Huang:

If you look at New York, I live in Massachusetts as we are going through some sort of surge, but in New York they seem to have things under control despite the poor leadership and despite the technology adoption problems. So I think in the end we are going to have the problem under control, but it is just going to take longer. It is going to have a higher cost in terms of number of infections, in terms of number of mortalities that just the brutal  fat because we don’t have a good leadership because I would say leadership failure probably explains maybe 60-70% of the problem. Technology is really a small part of this. The reason why I say this is that technology now, wide-scale adoption, is only important because you allowed the cat out of the bag. Suppose you acted proactively back in January, back in February in terms of having appropriate social distancing, in terms of greater preparation is for hospitals and so you don’t have to do with this surge.

Yasheng Huang:

Then the need for technology, it’s actually less, right? Because if you are able to contain the problem to one or two cities then you and the tool is then you actually don’t need universal adoption of contact tracing technology, so I always say that technology piece only becomes important because you let the hat of the bag. In China, they let the cat out of the bag.  They let 5 million people leave. They let the problem go from a small number of patients to a large number of patients initially in the first three weeks of January.  In the United States because administration didn’t take any meaningful actions other than the travel ban. And even the travel ban was not terribly effective. They didn’t ban European travelers, now we need a technology. So that’s point number one. Point number two is when we decided to reopen whether or not we have nearly universal adoption of technology is going to be really, really important in how well we fare in reopening the society, reopening the businesses and reopening the universities, and the economy.

Yasheng Huang:

In China now they have a lower number of a cases, right? Almost like a single digit or just maybe double digit–new cases, new cases. But because they have this tracking capability. So if you show up for work, it will immediately know whether or not you have an infection because they have this QR code that has three colors of green, yellow, and red, right? If you have a red code, you can’t even leave your apartment. So the country that has this kind of individualized level of information, when you reopen the business, when you reopen the universities, you can actually check whether this student can come into the classroom or whether or not he or she should stay in a dormitory. That’s going to make a critical difference when the policymakers in the United States feel comfortable in reopening the business in reopening the economy because China is going to have it.

Yasheng Huang:

They’re going to have reinfections. As soon as we reopen, we’re going to have reinfections. I have no doubt about that even though I’m not a medical researcher, but from what I read that’s almost a certainty. But how you deal with it…reinfection matters tremendously in terms of how confident you are to reopen the economy to reopen the business. So that’s going to [inaudible] us right by the time we decide to reopen. 

Tom Lenard: 

So that probably is a good note to end on. This has been a fascinating discussion and I would like thank you very much for taking the time to join us. 

Yasheng Huang:

Thank you. Tom, thank you to Scott. I enjoyed our conversation. 

Scott Wallsten: 

Thank you so much.