The Economist - USA (2020-11-21)

The EconomistNovember 21st 2020 BriefingGlobal technopolitics 21

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mostly users, coders and other firms. They

have their own laws, which lay out who can

change code and access data. They have a

position with respect to other platforms

which underpin, compete with or build on

them, just as territories have defined rela-

tionships with their neighbours.

And they have their own governance

systems. Some are “open”. The most fam-

ous is Linux, an operating system created

and maintained through co-operative ef-

forts to which all are, in principle, free to

contribute and from which all are welcome

to benefit. Others are “closed”, as is the con-

vention among many corporate-software

makers, such as Oracle. Some are run like

absolute monarchies, such as Apple under

Steve Jobs, who was the final arbiter over

the smallest details in his tech empire.

Don’t stop me now

Their dominant positions in this world of

platforms give companies like Facebook

and Google powers approaching or sur-

passing those of many countries. Yet coun-

tries can—as their economies become

more digitised—be increasingly under-

stood as platforms, too: national operating

systems of sorts. Natural resources still

count, but digital resources are gaining

ever more relevance: skilled and well-

trained tech workers, access to scads of

data, computing power, internet band-

width, industrial policy and venture capi-

tal. And as with technology platforms, a

country’s competitiveness will, to a large

extent, depend on how it manages and

multiplies these resources.

America is a platform like Microsoft’s

Windows and Android, Google’s mobile

operating system. These mix aspects of

open and closed systems, allowing others

to develop applications for their platform,

but also closely control it. America com-

bines monopolies and a strongish state

with lots of competition. Mainly thanks to

this profitable amalgam, the country has

given rise to most of the world’s leading

tech firms. China is more like Apple and Or-

acle, which combine being closed with lots

of internal competition. The European Un-

ion is best compared to an open-source

project such as Linux, which needs com-

plex rules to work. India, Japan, Britain,

Taiwan and South Korea all run differently

and have technology bases to match.

The rise of cloud computing and ai—

the first a truly global infrastructure, the

second its most important application—

has heightened the tensions between these

platforms. More and more value is created

by using oodles of computing power to ex-

tract aimodels from digital information

generated by people, machines and sen-

sors. The models can then be turned into

all sorts of services. Transport, health care,

teaching, campaigning, warfare—these

parts of society will not become “data-dri-

ven” as fast as many predict, but in time

they will all be transformed. Whoever con-

trols the digital flows involved can divert

much of the rent they generate. Knowledge

is power in the virtual world even more

than in the real one—and it generates pro-

fit. Ian Hogarth, a British tech thinker,

summarised the sudden sense of urgency

when he wrote in a paper in 2018 that “ai

policy will become the single most impor-

tant area of government policy”.

Many rich countries have drawn up am-

bitious industrial-policy plans for ai. Some

have also instituted national data strat-

egies which limit the data that can leave the

country. A few have begun attacking other

countries’ platforms by hacking their com-

puter systems and spreading misinforma-

tion. In short, they are behaving increas-

ingly like the companies producing the

technology reshaping their world. “Every-

body has become much more techno-

nationalist,” says Justin Sherman of the At-

lantic Council, a think-tank.

That the 21st-century internet would be

a splinternet was, perhaps, inevitable. It is

not just that nations act in their own inter-

ests; they also have different preferences

and values, for instance regarding privacy.

High digital borders behind which data get

stuck, however, are not in the interests of

most countries—though they may be in the

interest of some governments. Russia

wants to create a “sovereign internet” that

can be cut from the rest of the online world

at the flip of a switch (while retaining the

capability to mess around in more open

systems). Countries interested in using

flows of data to improve their citizens’ lot,

though, will see few advantages. In a splin-

ternet world choice will be limited, costs

will rise and innovation will slow. And all

the while China, with the biggest silo and

thus the greatest access to data, loses least.

You’re my best friend

It is against this background that a grand

bargain needs to be struck. Its broad out-

line would be for America to get security

guarantees and rule-making bodies in

which its interests can be taken seriously.

In return it would recognise European pri-

vacy and other regulatory concerns as well

as demands that tech titans be properly

taxed. Ideally, such a deal would also in-

clude India and other developing coun-

tries, which want to make sure that they do

not risk becoming mere sources of raw

data, while having to pay for the digital in-

telligence produced.

In terms of security, the parties to the

bargain would ensure each other secure,

diverse supply chains for digital infra-

structure. To get there, the cnasproposes,

in effect, to partially mutualise them:

among other things, members of a tech al-

liance should co-ordinate their efforts to

restructure supply chains and might set up

a semiconductor consortium with facili-

ties around the world. Supporting open

technologies and standards that create a

diverse set of suppliers would help, too. An

example is Openran, a mobile network

that allows carriers to mix and match com-

ponents rather than having to buy from

one vendor. A world with open infrastruc-

ture like this need not, in principle, just de-

pend on a few suppliers, as is the case today

with Huawei, Nokia or Ericsson.

To give in to Europe on other fronts in

return for help in such matters would be

costly to America, which has largely op-

posed attempts to regulate and tax its tech

giants abroad. In terms of statecraft, that is

an attractive part of the arrangement; to be

willing to pay a cost shows that you place

real value on what you are getting.

If an alliance of democracies is to deliv-

er a China-proof technosphere, America

will have to accept that the interdepen-

dence of the tech world on which the whole

idea is based means that it cannot act un-

constrained. Henry Farrell of Johns Hop-

kins University argues that America has so

far simply “weaponised” this interdepen-

dence, using chokepoints where it has le-

That’s private

Data-protectionregulations,worldwide

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Modifications to existing regulations Cumulative