Technology is creating our future. Technology can be a blessing, but it can also be a threat, as it also is leverage for power — such as water or food — in the hands of national or international rogue communities. This is the truer in a world where technology has made accountability an increasingly elusive objective. As such, Technology has then become a political goal per se.
“Whoever becomes the leader in [Artificial Intelligence] will become the ruler of the world.”
— Vladimir Putin, President of Russia
But current efforts to reduce the global management of technology to a mere rearrangement of the global supply chain are showing a dangerous backfiring, e.g. by harming those businesses whose financial performance was meant to be protected originally, by spurring techno-nationalisms which might even contribute to the rise of competitive industries in non-democratic countries, or even more so by creating a global political turmoil that forces our businesses to leave countries.
“We are locked in a race with countries such as China and Russia to be the first to deploy 5G.”
— Meredith Attwell Baker, President & CEO US Cellular Telecommunications and Internet Association
Other governments are reducing the management of technology to a matter of infrastructure security, failing to see the underlying political clash between democracies and autocracies.
“Avoiding damage to national sovereignty” is an important consideration of European countries’ negotiations with China over technology — Emmanuel Macron, President of France
Because of such a short-term view of technology as a strategic asset, western businesses and countries are losing ground against China.
The conflict between the US and China “should worry the US most of all, because, unlike China, it lacks a long-term strategic framework.”
— Stephen S. Roach, Yale University and former Chairman of Morgan Stanley Asia
In a world where technology has become a major geopolitical power play, I propose a new perspective on its governance, one in which it has become imperative that industry strategists, corporate government affairs departments as well as policymakers understand technology and how it is impacting the international political environment well beyond tactical trading and digital infrastructure activities.
Looking Beyond Mere Trading
The 19th century emphasized the stabilizing nature of economics, and this subsequently marked all of the 20th century. As a result, whoever managed the economy, managed politics. The relationship between economics and politics was clear, up to the point of confirming the discipline of political economy as "the study of production and trade and their relations with law, custom and government"; when applied to the international landscape, it is referred to as international political economy. During that time, the only evolution in this wave of thought was about how should the economy be managed (c.f. "Political power follows economic power", The Economist 2016); should it be the state, or should it be left up to the market? The interrelation between economy and politics was clear, and the international political economy became the cornerstone of policymaking and of international relations.
Today though, it is technology which builds our lives. Amnesty International just asserted that the current debate about the role of social media in managing fake news is inherently a breach of human rights. Russia is running a massive disinformation campaign in African countries. And in response to public outcries, Iran shut off internet access for its citizens. Not to mention the permanent privacy breaches or the persecution of Uighurs.
Technology also takes media by storm. During a recent speech, Marc Zuckerberg called social media the “Fifth Estate”, as a way to give people a voice. Such a comparison triggered a heated debate, both among technologists and lawmakers about the role of social media in free speech and national politics.
The economy is also impacted by technology. This past summer, Yanis Varoufakis proposed that the IMF takes over Libra as a digital token to “reduce global trade imbalances and rebalance financial flows” and “help the IMF fulfil its original purpose” by turning the IMF into “a global sovereign wealth fund” for transnational currency exchanges.
Technology even shifts the international balance of power. David Marcus gave last month a geopolitical twist to the lack of support by western regulators and governments to Facebook’s Libra project. German Chancellor Angela Merkel called for a common stance from European countries regarding the involvement of Chinese vendors in 5G deployments. Not to mention Xi Jinping's Digital Silk Road.
UN secretary-general António Guterres summed it all up in a video interview this week by explaining how technology is the major consideration today in explaining the social and geostrategic divides. International political economy alone, as a field of study that tries to explain the changes in our society and international relations, has become outdated. We need to bring technology in.
Technology has been lowering the barriers of entry in politics, as it has been doing for some time with most legacy industries, wrongly branding such an impact as 'technology disruption'. From the role of hyper connectivity in the development of countries, to the impact and role of social media in our lives and communities, the brutal changes in national and foreign participations in our democracies, the obsolescence of previous concepts about warfare, the role of our own governments, and the need for a more humanised AI, the choices we and our named politicians make about technology reflect our own values, both personal and in political theory. And so, we need a fundamentally different approach to address these differences in values.
A "Gulf of Mutual Incomprehension"
Now, the biggest hurdle to make these changes is the lack of understanding of technology by our policymakers. I took it from Bruce Schneier (Fellow and Lecturer, Harvard Kennedy School) how it was the British scientist CP Snow who already pointed out in 1959 in his book The Two Cultures that there is a breakdown of communication between scientists and humanities (a miscommunication that was later satirised by comedians Flanders and Swann). A sixty years gap has not bridged in the "gulf of mutual incomprehension" between today's technologists and policymakers. As Schneier said, more than the interesting societal observation that it was in 1959, the miscommunication is a full crisis today, as it deprives policymakers of an adequate preparation for managing today's world.
Indeed, policymakers do not understand technology or the importance it should have in their mandates. The US Congressional Office of Technology Assessment closed in 1995, to reopen just recently; 24 years of lack of assessment in technology. So no surprise that US congressmen showed a blatant ignorance during the hearings of the Facebook/Cambridge Analytica scandal. Trump response to China's 5G leadership reflects his understanding of foreign affairs based on trade balance (the same way of thinking that has lead him to repeatedly question since he was elected in 2016 the US military support to South Korea); meanwhile, China country uses its technological leadership to sway the outcome of the incoming Taiwanese elections in its favour or to boost the collaboration with Russia, and it continues to develop its Digital Belt and Road initiative. Trump also recently showed a deep lack of understanding of his own country telecoms market, when he recently asked Tim Cook to help get the US ready for 5G (Apple is not a main actor in deploying 5G). And in Europe, the debate about 5G among policymakers has been merely reduced to a question of infrastructure security, whereas it is gobsmacking to believe that infrastructure breaches can all be remedied, while the debate actually is about trust, democracies versus autocracies.
The Impact on Corporations
Harvard history professor Niall Ferguson made the case that in July 1914, bond markets in London were still acting as if war was not imminent. His point was to show how tough it is for companies to plan on the unthinkable when "business as usual" is the safest professional bet one can make.
Still, country managers 'just' keep up with events taking place in their countries and in their corporation home country, analysing the effect on foreign exchange rates. It's only natural though. People are rewarded and promoted for making things happen, not for expressing doubt and advising caution in the face of slow-burning threats. So, they go for more pragmatic and action-oriented strategies, rather than a reflective and diplomatic approach. But this approach routinely leaves them without the deep understanding required to interpret political developments within and across societies: their customers.
Lobbying is the most generalised way of handling uncertainty in "business as usual". The technology industry is no alien to it, having generated an impressive increase in lobbying. Mark Zuckerberg just recently apparently privately recommended several potential hires to the presidential campaign of Pete Buttigieg’s — the rising Iowa caucus State Democrat star who has proved to be a major competitor of Joe Biden and Elisabeth Warren; two of the people recommended were hired. Not to mention Tim Cook's courting on Trump.
Sometimes lobbying is just not enough to keep "business as usual" though, and the geopolitical weather triggers strategic corporate actions. As it happens, the RISC-V Foundation — a hardware company which directs the development of an open-source instruction set architecture for CPUs, and whose members include Alibaba, Nvidia, Qualcomm, Western Digital, NXP, Google, Huawei, IBM, MediaTek, Nokia and Red Hat —decided this week to incorporate in Switzerland instead of Delaware US, where it used to be based; the notion that the US is no longer the best location for some companies could have far-reaching consequences.
Geopolitical events affect companies' strategies whatever their location, sector or size. How geopolitics affect fortune 500 corporations might seem obvious, but there are many more companies that are now actively linked into the rest of the globe because of the process of globalization (even if some analysts say that globalisation is dying). Geopolitics can teach businesses to pick up on “weak signals” that could point to future problems in a country; Jay Ogilvy once said: "To ignore geopolitical forecasting is like ignoring the weather forecast before setting off on a picnic".
Having become such a fundamental pillar of politics, it is imperative that not just governments but also investors and the boards of directors start considering the relationship between technology and politics.
Summary & Call to Action
Technology is creating our future. Technology can be a blessing, but it can also be a threat, as it also is a leverage for power — such as water or food — in the hands of national or international rogue communities. This is the truer in a world where technology, actually, has made accountability an increasingly elusive objective.
Technology has then become a political goal per se. But current efforts to reduce the global management of technology to a mere rearrangement of the global supply chain are showing a dangerous backfiring, e.g. by harming those businesses whose financial performance was meant to be protected originally, by spurring techno-nationalisms which might even contribute to the rise of competitive industries in non-democratic countries, or even more so by creating a global political turmoil that forces our businesses to leave our country. Other governments are reducing the management of technology to a matter of infrastructure security, failing to see the underlying political clash between democracies and autocracies.
It has then become imperative that industry strategists, corporate government affairs departments and policymakers understand technology. But there has traditionally been a “gulf of mutual incomprehension" between technologists and policymakers. There has even been a certain class proudness in neglecting each other. A rejection that shows no signs of decreasing, with policymakers pushing aside every technology trend into the digital transformation basket. This miscommunication has transformed into a full crisis today, as it deprives policymakers of an adequate preparation for managing today's technology world.
The case for corporate and business strategy and government affairs departments, as well as public policymakers, to think about technology beyond intellectual property, trading or digital transformation — and to surround themselves by politics-minded technologists — is clear. Technology should be an essential component of corporate strategies and country public policies. Political power follows economic power, they say. Political power also now follows technology power.
Author: Carlos Ruiz Gomez, Telecommunications & Emerging Technologies | Madrid, London & Brussels