Geopolitical

The Geopolitics of Technology

Big Data, Artificial Intelligence and 5G in a Multipolar World

Author: Erik Brown, Research Analyst, Global Risk Institute


Introduction

 

In his celebrated address to Rice University in September 1962, President John F. Kennedy looked toward the “opening vistas of space” and pledged that the United States would land on the Moon within 10 years. The project would serve to concentrate the nation’s energies and its talents in service of a collective human endeavour. [1] The space program had a pacific objective at its core, [2] as an undertaking to ensure the cosmos would not be “governed by a hostile flag of conquest but by a banner of freedom and peace.” [3] Yet Kennedy also alluded to the political implications at stake, declaring that “no nation which expects to be the leader of other nations can expect to stay behind in this race for space.” [4] To some extent, the “moonshot” would become yet another theatre in the larger Cold War with the Soviet Union. A scientific effort would assume strategic dimensions.

On the 50th anniversary of the Apollo 11 mission, technology feeds geopolitical competition once more. Schumpeterian advancements in fields like data analytics, artificial intelligence and telecommunications attract global attention and drive investment. This “Fourth Industrial Revolution” also pits emerging and incumbent powers against each other. A growing hub of innovation, China is primed for rivalry with the United States, and to a lesser extent, the European Union and other high-value added economies. The Communist Party (CCP) has prioritized advanced technological development with its “Made in China 2025” policy, aiming to reduce dependence on foreign imports, ascend the economic value chain and overcome the Middle-Income Trap. However, the U.S argues that the 2025 strategy builds upon illegal and discriminatory trade practices like forced technology transfer, cyber espionage, and the theft of intellectual property, and other countries share similar concerns. [5] The Trump Administration now frames China as a revisionist power seeking “to shape a world antithetical to U.S. values and interests,” [6] while the European Commission labels it “an economic competitor in the pursuit of technological leadership” and “a systematic rival promoting alternative models of governance.” [7] In contrast, many among the Chinese elite perceive the hard line taken on trade in Washington as an attempt to contain China’s rise rather than a sincere effort to create a more balanced economic relationship. [8]

In the race to innovate, the geopolitical determinants of big data, AI and 5G are critical to the financial services industry. These technologies can help institutions responsibly leverage client data to improve product development and customer relations, refine human capital procurement, investment strategies and loan assessment, bolster cybersecurity and fraud detection and develop new mobile services and capabilities. However, public policy, macroeconomic interest and national security priorities could ultimately restrict their commercial applications. To check global rivals, states could impose new sovereign controls over the internet that balkanize cyberspace in line with physical borders. Governments fearful of losing their technological advantage could also enforce new restrictions on trade, market access, intellectual property and capital flows that fragment supply chains and stifle growth. These actions can manifest downstream to affect business lines in complex and ambiguous ways and test the efficacy of risk management systems. A financial services provider must first understand the political dimensions of emerging technologies before it can assess the associated enterprise risks, test its resiliency and design appropriate governance strategies.


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Endnotes

[1] John F. Kennedy, Address At Rice University On The Nation’s Space Effort, John F. Kennedy Presidential Library and Museum, Video, 18:27, September 12, 1962, https://www.jfklibrary.org/learn/about-jfk/historic-speeches/address-at-rice-university-on-the-nations-space-effort.

[2] Douglas Brinkley, moderated by Fredrik Logevall, American Moonshot: John F. Kennedy And The Great Space Race, YouTube Video, 1:29:29, April 4, 2019, https://www.youtube.com/watch?v=_Dbwx_SMzbM.

[3] Kennedy, Address At Rice University On The Nation’s Space Effort.

[4] Ibid.

[5] James McBride and Andrew Chatzky, “Is ‘Made In China 2025’ A Threat To Global Trade?” Council on Foreign Relations (CFR), last modified May 13, 2019, accessed May 14, 2019, https://www.cfr.org/backgrounder/made-china-2025-threat-global-trade.

[6] “National Security Strategy Of The United States Of America,” The White House (December 2017): 25, https://www.whitehouse.gov/wp-content/uploads/2017/12/NSS-Final-12-18-2017-0905-2.pdf.

[7] “EU-China – A Strategic Outlook,” European Commission (March 12, 2019): 1, https://ec.europa.eu/commission/sites/beta-political/files/communication-eu-china-a-strategic-outlook.pdf.

[8] As argued by Zhang Baohui, Lingnan University: Bloomberg News, “In New Trump Tariffs, China Sees Master Plan To Thwart Its Rise,” Bloomberg, last modified September 18, 2018, https://www.bloomberg.com/news/articles/2018-09-18/in-new-trump-tariffs-china-sees-master-plan-to-thwart-its-rise.