In an era when living publicly is becoming the default, people are coming up with creative ways to carve out private spaces—a phenomenon we’ve termed “Going Private in Public,” one of our 10 Trends for 2013. Rather than rejecting today’s ubiquitous social media and sharing tools outright, people are reaping the benefits of maintaining a vibrant digital identity while gradually defining and managing a new notion of privacy. In researching this idea, we interviewed Don Tapscott, a leading authority on innovation, media and the economic and social impact of technology. Tapscott advises business and government leaders worldwide and has authored or co-authored 14 books, most recently Macrowikinomics: New Solutions for a Connected Planet. In an email exchange, he shared his take on how attitudes toward privacy are changing, the cost of privacy loss among the youngest generation and the responsibility of brands in today’s online privacy debate.

In a world that values living publicly by default, where does privacy fit in for individuals?

I don’t think most people would agree that living publicly is a good idea. To be sure, we’re all sharing more information than we have in the past. In fact, a growing number of people argue that the notion of having a private life in which we carefully restrict what information we share with others may not be a good idea. The proponents of this view are some smart and influential players of the digital revolution.

I think they are wrong, and each of us needs our own personal privacy strategy. This is also an opportunity for private and public sector leadership. Corporations, governments and civic society must help the public understand the extraordinary volumes of data being generated and how this will increase exponentially in the near future. In the course of a day, we currently generate the same amount of data as had been captured since the beginning of history up to the year 2003.

Most people don’t value living publicly—they value the social networks that are increasingly important to day-to-day life. In testimony before a congressional committee, Justin Brookman from the Center for Democracy & Technology outlined the dilemma that citizens confront when they want to participate fully in society yet not live under constant surveillance. He likens the decision to opt out of being part of the data collection as analogous to opting out of electricity 30 years ago. If a person disconnected from the services that collect personal and sensitive data, it would be tantamount to disconnecting from society.

Brookman cites many examples of the downside, such as the record kept of stories read on a newspaper’s website compared to the anonymity of buying and reading a paper from a newsstand. Or going out for a drive, talking to friends, writing letters or watching TV. When these activities move into the networked world, they become vulnerable to surveillance. People do not have to lead an open life. They have a right to privacy, unlike institutions. Institutions have an opportunity and responsibility to be as open as possible.

If you had to redefine the idea of “privacy” for the 21st century, how would you do so?

For sure our attitudes about privacy are changing. I find myself sharing all kinds of information—largely because the benefits to me outweigh the costs. When we reveal personal information, we can help society too. Every time a gay person comes out or someone with depression opens up about their condition, they break down stigma and prejudice. Fully 20 percent of all patients with the fatal disease ALS share intimate information about their treatments and conditions on the network PatientsLikeMe.com. And tens of thousands of others with rare diseases who use the site to share information say it has helped them better manage their illness.

But this doesn’t mean that privacy is an outmoded idea. Rather, it’s worth defending. Even though the human condition requires connection, we also need to feel confident that we can be alone and unwatched when we want to be. Let me paraphrase privacy advocate Ann Cavoukian, with whom I wrote a book on privacy. She notes that humans are social animals but that we also need moments of solitude, intimacy, quiet, reserve and private reflection. The human condition requires that both these interests continue to coexist.

Today a person must develop and implement his or her own personal privacy strategy. When you share, consider the benefits. But realize that withholding most information about you is in your interest: There are many “bad actors” who would misuse it. Privacy is important to the formation and maintenance of human relationships, reputation, trust and even “the self” and its presentation in everyday life. Society lacks the laws and norms to protect you from companies being invasive or manipulative. And don’t assume governments are benevolent: We may be harmed in absentia by unknown public and private bureaucracies having access to our personal data—perhaps the targets of injurious decisions and discrimination, and we will never really know what or why.

By all means, be as open as you want, but realize that with openness can come vulnerabilities, especially for your children. And as the expression goes, “Discretion is the better part of valor,” meaning that it makes sense to be careful in the face of unintended consequences and risks.

It’s been said that the youngest generation doesn’t care about privacy, and they’re ready to fully embrace transparent living. Would you agree?

I think young people have so far borne the heaviest costs of privacy loss. They are the canaries in the coal mine. Young people are being denied that dream job because they didn’t understand that they needed to be careful about what one posts on Facebook. Ninety percent of all employers access young people’s social media pages when they are considering an application. Seventy percent reject people based on what they find. In some cases employers demand that job applicants provide social media IDs and passwords as a precondition to hiring.

But I’m hopeful that young people are developing a keener understanding of the Internet and the good and the bad that it can do. They are digital natives, whereas someone of my generation is a digital immigrant. I know a number of young people who have stopped using Facebook because it is too intrusive and leaves them vulnerable, and this doesn’t surprise me.

How has the death of the anonymous Web affected privacy?

We all recall the 1993 New Yorker cartoon featuring two dogs sitting in front of a computer, with one saying to the other, “On the Internet, nobody knows you’re a dog.” People were assured of anonymity if that is what they desired. A teenager questioning his sexual orientation could visit gay-friendly sites that would offer helpful information and answer questions without him having to reveal his identity.

This is no longer guaranteed to be the case. High-profile companies such as Google and Facebook closely monitor almost everything a person says or does so they can serve up online ads that closely correspond to that person’s interests. There are dozens of low-profile companies that do the same. This is highly corrosive to the sense of privacy. And as we have already seen, some of these companies simply can’t be trusted. They claim not to gather identifying information, and then it turns out they are.

There are ways to surf the Net without revealing who you are. A number of sites will let you surf by routing your activities through their computers so that your address is not revealed. Or you can use the computer at the local library. It’s unfortunate that one has to resort to such actions. We are the poorer for having lost the anonymous Web.

Forgetting is a natural and healthy human phenomenon that has essentially been built out of the Internet and social networking. What are the potential downfalls of relying on a medium that publicly documents our missteps?

Privacy is nothing if not the right to be left alone, to experiment and to make mistakes, to forget and to start anew, to act according to conscience and to be free from the oppressive scrutiny and opinions of others. Our ability to record nearly everything and to make that record available to others is unprecedented and defies parallels. What will it be like to grow up in a world that does not forget? Will comments posted online at age 14 discourage people from seeking public office or speaking out years later, out of fear? Mitt Romney tried to deny that while in school he bullied a gay student and forcibly cut his hair. Today there would be a video of the event on YouTube, and there would be photos and discussions of the event on Facebook.

The danger here is not just Big Brother (governments) or little brother (corporate profiling of each of us). Privacy is a fundamental precondition to human relationships. True intimacy involves the symmetrical sharing of very personal information. We share secrets with close friends, loved ones and with those we might come to love. What happens when we begin sharing our secrets with everyone? I believe it degrades the value of truly personal information in building intimate relationships. Part of being intimate is the revealing of secrets and being with that person who knows things that others do not.

Ultimate control of privacy has been taken out of the hands of the individual. How does this affect the way we interact with social media and each other?

I’m not sure I agree with your assumption. We have not lost ultimate control, though that is the direction in which we are headed. But the issue is key. Students and employees have been punished for saying things in what they thought was a private discussion, only to have it revealed on Facebook by someone who cut and pasted the exchange. It is folly for someone to have a confidential discussion on Facebook if that conversation could harm them if it came to light. It is the wrong venue. Social media cannot be trusted for private communications.

What are the long-term implications of living in a culture where people are constantly under surveillance?

The most appropriate metaphor for the growing loss of privacy today is found in Franz Kafka‘s The Trial, where the central character awaits trial and judgment from an inscrutable bureaucracy for a crime that he is not told about, using evidence that is never revealed to him, in a process that is equally random and inscrutable. In a likewise manner, we too will be judged and sentenced in our absentia by unknown public and private bureaucracies having access to our personal data. We will be the targets of social engineering, decisions and discrimination, and we will never really know what or why.

If history is any guide, advances in privacy have tended to arise in the wake of widespread privacy abuses—for example, the negative effects of mass printing presses, the emergence of the fascist state, the abuses of credit reporting companies in the 1960s. Something similar may be happening today with data breaches and identity theft “in the cloud,” as more and more people come to understand the pain and consequences of personal data misuse.

What are some examples you’ve seen of people “hacking” or “gaming” the system to take back some sense of privacy while maintaining a vibrant identity on social media?

There are many. Some young people use pseudonyms on Facebook so that only their friends know who they are. They can post photos and comment on their friends with some confidence that a future employer would not be able to do a simple search on their name and come up with inappropriate information.

Should technologists be held accountable for building a culture of privacy on the Web? What responsibility do we owe each other when it comes to sharing information about other people online?

We owe each other a great deal of responsibility when it comes to what we discuss online. Once something is put on the Internet, it can never be taken back. There has never been such a powerful tool to harm someone’s reputation. And just because you are comfortable with leading an “out loud” life, it doesn’t mean you can assume others do as well.

So if by “technologists” you mean the entrepreneurs that run the big social media and search companies, they have strong material interests to do the opposite—to encourage their users to undermine their own privacy and the privacy of others. It is at the foundation of their business model. They have a responsibility to their shareholders to make a profit, and they do this by collecting data on us and using it. And they would like to do this in as unrestricted a manner as possible.

The trouble is that this is the Achilles heel of many of these companies, because there is a certain tipping point where the public becomes fed up with their information being used against them. They will become more cautious. A growing number of people have told me they have abandoned Facebook despite its amazing advantages and benefits. They don’t like what is happening to their personal information.

Companies such as Facebook and others have got a short-term interest in privacy being destroyed, and there is a battle shaping up. There is a relationship of forces right now that favors the owners of these companies. It speaks to the need for people to get together and take action to protect their personal privacy. The stakes are high.

What is the role of brands in all this?

Until recently, most companies were opaque and operated secretly. With the Internet’s arrival, this is no longer possible. People everywhere have at their fingertips the most powerful tool ever for finding out what’s really going on and informing others. Customers can evaluate the worth of products and services at levels not possible before. Employees share formerly secret information about corporate strategy, management and challenges. To collaborate effectively, companies and their business partners have no choice but to share intimate knowledge. Powerful institutional investors are developing X-ray vision. And in a world of instant communications, whistleblowers, inquisitive media and Googling, citizens and communities routinely put firms under the microscope.

For a brand to have value today, it must be seen to be honest. So to me it makes sense for companies to embrace truth and transparency, not just because it’s inevitable but because it’s good for you. I believe open institutions will perform better. They will have higher trust and be able to build better networks. Transparency drops transaction costs in supply chains. It increases loyalty with employees. It helps create good value—because value is evidenced like never before. And if your company is buff, you can “undress for success.” Transparency is a new form of power, which pays off when harnessed.

The upshot is that companies need to protect the privacy of their employees, customers and other stakeholders. If they don’t, they will weaken trust and pay a price in the market.