NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, March 24, 2017

By Jim Fruchterman

Five years ago, tech entrepreneur and venture capitalist Marc Andreessen famously wrote, “Software is eating the world.” It’s hard to think of more prophetic words coming out of Silicon Valley, and new players that have software at their core continue to reinvent entire industries. Uber disrupting the taxi industry and Airbnb the hospitality industry are just two examples.

Unfortunately, the software revolution has not benefited all members of society equally. The reason for this is simple: The vast majority of software is developed to maximize profit, not to deliver social good. The Silicon Valley business model is laser-focused on products projected to be hugely profitable in big markets. Certain commercial products, such as the mobile phone, have a wider positive social impact on the majority of humanity, but financial constraints limit the best intentions of many for-profit entrepreneurs. As a result, Silicon Valley has failed to fill the massive unmet needs of the social sector on issues ranging from poverty and education to human rights and the environment.

Silicon Valley is well aware of the gap between delivering profits to shareholders and providing social good to the world. It’s that awareness that led to robust corporate social responsibility (CSR) programs, steep nonprofit discounts on otherwise expensive software, Salesforce’s 1/1/1 model and many software billionaires committing their fortunes to social efforts through the Giving Pledge. These efforts have been a boon to the social sector.