Should consumers put their trust in innovation?

“Fail better!”

It is a refrain that has become synonymous with innovation. Elon Musk – founder of SpaceX and Tesla, and a central figure in the birth of PayPal – is just one preacher of Silicon Valley’s central doctrine: "If things are not failing, you are not innovating enough," as he once put it. The concept of embracing failure in pursuit of “iterative innovation” runs through America’s most admired and highly-capitalized technology companies. Apple, Google and Facebook regularly release unfinished products and fix them as they go, banking on media and consumer tolerance to drive advancements and mine for software bugs.

Beyond software, however, tolerance for failure remains low and could be inhibiting the pursuit of the next breakthrough. The controversy over Uber’s driverless trial in Pittsburgh this week is a case in point. Of course, should failure occur, the price will be considerably higher than having to release a patch or restart a frozen phone. The tests happening in Pittsburgh illustrate that we are charting new waters in the relationship between brands and consumers. As the pace of innovation outstrips the pace of legislation, consumers will increasingly be asked to put their trust in brands, rather than governments. In effect, it is the beginning of a new social contract.

Nobody will be hoping the Pittsburgh experiment succeeds more than Uber CEO Travis Kalanick. But if something does go wrong, he need look no further than the recent SpaceX Falcon 9 rocket explosion for an indication of how the public will react. Bloomberg Businessweek called it a “Terrible, Horrible $779 Million Day,” while The New York Times led with “SpaceX Blast Puts Big Goals into Question.” One of the harshest responses came from Mark Zuckerberg, who posted on his Facebook page: “I'm deeply disappointed to hear that SpaceX's launch failure destroyed our satellite.”

The reaction demonstrated that, although we crave exponential progress in many industries, our tolerance for real-world failure remains low. That combination may be akin to wanting to have our cake and eat it too. Moreover, our propensity to remain risk-averse poses a completely different risk – it slows progress.

Skeptics of Uber’s driverless experiment will point to May of this year, when a Tesla Model S operating on Autopilot mode failed to distinguish a white tractor trailer against the Florida sky, and collided with it, ending in a devastating casualty. But rather than recalling the vehicle, Tesla leaned into iterative innovation, and Musk made an immediate commitment to developing software upgrades to improve Autopilot. The approach was in complete contradiction to the norms of established automakers who, as The New York Times reported, “take a more conservative view of new technology and tend to have their own engineers refine and test it until it works as intended.”

The “conservative view” may be safe, but it is also slow. On the other hand, iterative innovation carries risk, but also enormous promise for rapid progress in the physical world - from urban planning, to road safety, to space exploration. For it to continue, consumers will have to put their trust in brands that have a bold vision for the future, and accept that risk and failure may be part of the price of executing that vision. On their part, brands must earn consumer trust by doing everything in their power to ensure new innovations are safely tested and executed responsibly and transparently. Just because brands are innovating ahead of legislation doesn’t mean they should be excused from the ethical obligation of regulating themselves.

It's time for brands and consumers to forge a new social contract, wherein we share the responsibility of innovation and recognize the opportunity costs of being conservative. In the case of driverless cars, for example, the cost of avoiding risk may be higher than risk itself. In 2015, there were 38,000 road deaths in the USA, an 8% increase compared to the previous year.

This may have been in Pittsburgh Mayor Bill Peduto’s mind, when he agreed to let Uber trial self-driving cars in his city. As he said, “I’m 51 years old. I have never seen my city grow. If we tried to stop time and did not want to be a leader in an industry that will forever change transportation over the next decade, we would be losing this opportunity to another city.”

That calculation – between risk and reward, innovation and stagnation – is one that all of us now have to make. The real question is: what will be the price be if we do not rewrite the social contract between brands and consumers, and embrace the power of innovation?

Oz Woloshyn is a strategist at Redscout. Redscout's head of strategy Ivan Kayser contributed to this piece.

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