Reputation economy, where we are all silently judged

So if someone asked you for the three words that would sum up your reputation, what would you say? How would people describe your judgment, your knowledge, your behaviors, in different situations? Journalist Patrick J O Brien explores why the answer to this question has become profoundly important in an age where reputation will be your most valuable asset

Your reputation defines how people see you and what they will do for you.  It determines whether your bank will lend you money to buy a house or car;  whether your landlord will accept you as a tenant;  which employers will hire you and how much they will pay you. It can even affect your marriage prospects.  

And in the present Reputation Economy, it’s getting more powerful than ever.  Because today, thanks to rapid advances in digital technology, anyone access huge troves of information about you your buying habits, your finances, your professional and personal networks, and even your physical whereabouts  at any time.  In a world where technology allows companies and individuals alike to not only gather all this data but also aggregate it and analyze it  with frightening speed, accuracy, and sophistication, our digital reputations are fast becoming our most valuable currency.   

Today everything depends on the social score, and everyone is desperate to move up in the rankings. But the omnipresent rating game has one big catch: ranking up is incredibly hard, while ranking down is rapid and easy, like a free-fall.Welcome to the reputation economy, where the individual social graph  the social data set about each person determines one’s value in society, access to services, and employability. In this economy, reputation becomes currency.

On the web or via mobile, we can now share almost anything.  The reputation economy is based on the simplistic, but effective star ratings system. Anyone who’s ever rated their Uber driver or Airbnb host has actively participated. But what happens when algorithms, rather than humans, determine an individual’s reputation score based on multiple data sources and mathematical formulas, promising more accuracy and more flexibility via machine learning to effective star ratings system. promising more accuracy and more flexibility via machine learning?

Over 60% of companies in Malta currently use social media to screen employees. And many AI-enabled startups are competing in the HR assessment market, using AI to crawl potential candidates’ social media accounts to filter out bad fits. What unifies all current platforms is a reliance on our ability to get enough information about the person we are exchanging with to feel comfortable setting the terms on an individual basis. In other words, they are economies of reputation.

Much of the growing interest in these platforms springs from the conflicts we’re seeing in traditional markets. Lack of access to capital, slow market growth, poor employment rates all of these are driving people to find ways to leverage value from other areas of their lives.

Back In 2012, Facebook applied for a patent that would use an algorithm to assess the credit ratings of friends, as a factor in one’s eligibility to get a mortgage. And China is aiming to implement a national social score for every citizen by 2020, based on crime records, their social media, what they buy, and even the scores of their friends.  

Being able to accurately or even reasonably accurately measure reputation has immense value. It makes it far easier to find suppliers or business partners and this lowering of transaction cost can create a far more fluid and efficient economy. If you are investing in or supporting small businesses especially in developing countries . It means your resources can go far further. We will increasingly have reputation scores attached to content, to publishers and to journalists, making it easier to find trustworthy information and it might even make dating a little easier. The reputation economy will increasingly drive business and society. Your reputation will precede you wherever you go.

There are only a few windows in history where the opportunity exists to reinvent part of how our socioeconomic system works. We're living through one of those moments. I believe that we are at the start of a collaborative revolution that will be as significant as the Industrial Revolution. In the 20th century, the invention of traditional credit transformed our consumer system, and in many ways controlled who had access to what. In the 21st century, new trust networks, and the reputation capital they generate, will reinvent the way we think about wealth, markets, power and personal identity, in ways we can't yet even imagine  

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