In an interview with Calcalist, Google’s president of business and operations discussed the company’s role in Israel’s tech ecosystem, navigating regulation and future plans.
By Elihay Vidal, Calcalist
Google’s goal for Israel in the next three years is to play a meaningful role in the “lives” of 6,000 local startups, according to Matthew John Brittin, the company’s president of business and operations, Europe, the Middle East, and Afrika. Brittin spoke to Calcalist earlier this month while on a visit to the company’s Tel Aviv campus. Google, he said, wants to help the next generation of startups grow, scale-up, create jobs, and promote prosperity.
According to Brittin, while 6,000 is an ambitious number, with 1,250 local employees—1,000 of whom are in engineering roles—the company is ready for the task.
In recent years, Google has been investing a lot of resources in an effort to establish its foothold within the Israeli tech sector. Less than a year ago, Google launched its new, 1,800-square-meter Tel Aviv Campus. It features a cafe that serves as a meeting place for entrepreneurs and event spaces where the company hosts meetups and lectures. In this campus, Google operates digital trainings, startup mentorship programs, and accelerators.
There are nearly 7,000 startups active in Israel today. You are already involved in the activity of hundreds of local tech companies, and talking about becoming involved with 6,000 more. Does this mean you aim to take over the local ecosystem?
These are the numbers today, but consider that in the next three years, the number of startups will go up. We recognize this is a great place to be an entrepreneur, and a lot of startups are on the right path. We want to help more entrepreneurs realize their ideas and build businesses centered around these ideas. What we offer is a toolbox that anyone can use. We are not trying to get these 6,000 startups to use nothing but Google tools. On the contrary, we are trying to inspire them and give them the confidence to recognize opportunities.
What does Google have to gain from this?
Like every other company, there’s the bottom line—the numbers. But if you go back to the company’s founding paper, you can see that the ultimate goal was long-term impact. In Israel, too, we are planning for the long haul. The programs we run here help our people connect with the reality of the industry: from the challenges—recruiting talent, securing funding—to the tools they need in order to grow.
What makes Google campus special is the fact that this place connects people and helps them share ideas. In the long run, Google stands to profit from people realizing how useful our tools can be and choosing to use them. But offering our help to startups does not directly connect to them going on to use our tools. Google’s search engine allows millions of businesses to get ahead. So does the android operating system. We create tools and platforms so that people can build on them.
Do you operate the same digital education programs in other countries as well?
We try to create connections between people in each country where we have an operation with a digital skills program called Grow with Google. In Israel, the focus is on startups because that’s where the opportunities are. In Spain, the focus is on young unemployed people, because the unemployment rate is high. We try to build skills that will allow them to go out and work. In Italy, we focus on small businesses, because they are the foundation of the economy, and we train unemployed people to get back into the market.
In the four years these programs have been active in Europe, the Middle East, and Africa, we have trained 10.7 million people in digital skills. That’s a lot. The fact that we reached this level of influence with this program teaches us a few things. First of all, that these skills are sought-after. That people are able to learn and apply these skills to a positive economic effect. Women make up 48% of the participants in these programs—which is above the norm in the technology world. 45% of our participants with whom we are in contact said they were able to find a better job, or grow their businesses, or found a startup. It demonstrates how important it is for commercial companies to be involved in building skills.
Navigating Changing Regulation
Brittin, 50, joined Google in 2007 and is considered one of the company’s most notable speakers on digital education. In recent years, Google has spent hundreds of millions of dollars on lobbying and public relations in an effort to fight off criticism and regulatory restrictions placed on it by governments all over the world. The European Union is conducting several investigations into the company on issues pertaining to antitrust regulation, taxation, and privacy. Brittin himself has represented the company in front of several committees in the European Union and the British Parliament.
Like other tech multinationals, Google is active commercially in many countries, but due to sophisticated international tax coordination, the company was able to bypass a lot of its tax payments. Criticism is running high in many countries, including Israel, and it has caused regulators to write new laws that will help them collect more tax from multinational superpowers. France has recently approved taxing Google and companies like it 3% on their revenues, and the U.K. is trying to enforce a 2% tax. The Israeli Finance Ministry is trying to work out a solution to allow the country to collect tax from Google.
How do you deal with the growing pressure from government to increase taxation?
We pay all the taxes we are required to pay, and we do so willingly. We are aware that governments want to see more money coming in, but the global tax system is not built that way. We have been calling for reform for years because it is in our interest that our local teams will not have to deal with regulation and taxation.
Each country is acting independently, and complicated international laws do not necessarily match the reality on the ground. It is the responsibility of governments to coordinate these laws, and we prefer it is carried out with international agreement under the OECD—otherwise, it will never work. It is up to politicians to find a collaborative solution. We want to focus on technology and on helping businesses grow.
In many countries, Google controls digital advertising in a type of duopoly with Facebook. So much so that critics are calling governments to enforce antitrust regulations.
It is true that when you talk about the phenomenal growth of digital advertising, Google is a part of that. But you have to consider that the ad sector had never seen a stronger competition than it does today. Never were there so many options for people to communicate their message to consumers. Consumers today enjoy more channels than ever before, and Google has a part in that.
You can say that this works in Google’s favor. But take Israel for example: approximately 50% of Israelis who advertise with Google target an international audience. This means that there is a great export mechanism in place. Everything we do in advertising is helping people grow. Yes, we take our share for the technology we provide, but you need to look beyond the headlines and understand how it really works.
A year ago, while speaking at a conference, Google founder Sergey Brin said that the company completely missed out on the blockchain revolution. Last month, Facebook presented its own plan to introduce a cryptocurrency, Libra. What should Google do following this announcement?
I’ve spent a lot of time on sports, (A rower, Brittin represented the U.K. in the 1988 Seoul Summer Olympic Games. A year later, he won a bronze medal at the World Rowing Championships—E.V.) and what it taught me is that it is better to focus on what you are doing instead of what the competition is doing. There are ample opportunities for innovation, and while Google cannot be a part of each and every one, the financial services sector is one area where Google is involved. In Israel, for example, is not yet available. In London, where I live, I no longer carry cash since I use Google Pay wherever I go. So there is a lot of room for innovation and for multiple companies to present their innovations.
The increasing use of smartphones as a tool for data collection is one of the key points in the criticism Google faces on the issue of privacy—how do you communicate this problem to users?
We are not going to tell people what to do and what not to do. We need to let them know what type of information can be collected about them and give them the ability to control this data. As a user, your responsibility is to decide what to do with this information. We need to make it easier for you to understand what information Google has on you and let you decide how this information is used.
There’s your private data collected on Gmail, data collected on photo applications, on YouTube, and that is your own private data and you can place it behind lock and key and let no one use it. At the same time, there is the footprint you leave behind on the digital seashore when you wander online. Here, it is important to help people understand how it all works, in what ways this information is used, and give them control. In the push of a button you can activate or disconnect applications and change the settings of all kinds of services. Each day, 20 million people access the settings of their Google accounts. The E.U. has set the bar very high with the GDPR guidelines. We fully support these guidelines, because they match our own principles, and we see many countries worldwide moving in a similar direction. This is an excellent example of the way Europe is paving the way for the rest of the world.
What are the next trends Google intends to focus on?
It is important to remember that half of the world’s population is still not connected to the internet. So, the greatest challenge in the coming years is still to get people online access for the first time in their lives. I visit Africa and see children learning English from a $30 smartphone in a cabin in Soweto and this first encounter with the internet is still the most important trend. At the same time, everything that happens on a mobile device could be better, with more—and more sophisticated—sensors, but also with better software. Google’s team in Israel has launched several applications that starred in this year’s Google I/O developer conference. Innovations such as automated subtitles featured on the smartphone screen to help those with impaired hearing better understand conversations, or Google lens applications that let users perform a search using their smartphone camera.
I don’t know what the next device that replaces the smartphone will be, but it will obviously be something related to the way people enjoy using voice command. As technology progresses, it becomes better and more efficient and allows people to disconnect from the screen with devices like Alexa and Google Home. But this is the first step in voice interface, and we will continue to see the integration of voice command and screens in the near future. This is a very exciting time in which the pace of innovation is going up, the level of competition is increasing, and the meaning of these two things is that in the next few years more people will have more opportunities.