The Geopolitics Of Technology In 2019: (Innovation) Winter Is Coming

The Geopolitics Of Technology In 2019: (Innovation) Winter Is Coming

Last year, two big stories dominated the increasingly important intersection of politics and technology: a cold-war-like confrontation between the US and China over the future of advanced technologies like artificial intelligence, and a broad backlash against the growing power of digital technology firms.


In both cases, governments responded by erecting new barriers to the flow of information and technology across borders. In 2019, that may create a set of more fundamental and lasting problems (see Eurasia Group's Top Risk #6), as governments risk stifling innovation by responding disproportionately.

Here's how it could happen:

National security: For China hawks in the Trump administration and Congress, keeping advanced US technology out of Chinese hands – and Chinese technology out of sensitive US telecommunications networks and other critical infrastructure – is an urgent priority. That's already led to tighter oversight of Chinese investments in US tech firms and a big drop in the flow of Chinese money into Silicon Valley. The next step for the administration is to finalize new export controls that will make it harder for US companies working on sensitive technologies to ship them to China or partner with Chinese firms.

These new strictures have bipartisan support, so they'll remain in place regardless of any eventual trade deal between the US and China. Beijing, for its part, is more determined than ever to break its reliance on the West for the basic technologies it will need to prosper in the future. This is a technology divorce, and it's going to crimp the flow of money, ideas, and talent between the two countries.

The "Techlash" comes home: Silicon Valley was left reeling in 2018 by a series of massive data breaches and growing outrage over the use (and abuse) of internet users' personal information. This year, regulators around the world will take powerful tech giants to task. Europe is likely to bring the first big enforcement cases under its tough new data protection laws, with the potential for massive fines against companies that fail to adequately protect users' personal information.

Even the US, which has long taken a hands-off approach to digital privacy, is finally getting serious about regulation. With Democrats back in charge of the House, Congress looks increasingly likely to take up some kind of national privacy reform this year. As digital privacy regimes and other forms of tech regulation multiply around the world, it's going to become harder to operate as a global tech company. That's a problem in a sector whose business models rely on leveraging the scale of vast troves of data.

Wait a minute, skeptics might say: Strategic competition between the US and the Soviet Union during the Cold War put a man on the moon and led to massive advances in nuclear technology. True, but imagine how much more both sides would have benefitted if they'd worked together.

Building on its previous commitment, Walmart is investing an additional $350 billion in products made, grown and assembled in America - supporting more than 750,000 new jobs by 2030. This pledge will aim to avoid more than 100M metric tons of CO2 emissions, advance the growth of U.S. based suppliers, and provide opportunities for more than 9,000 entrepreneurs to become Walmart suppliers and sellers through Walmart's annual Open Call.

China's GDP grew a lower-than-expected 4.9 percent year-on-year in the third quarter of 2021, a whopping three percentage points less than in the previous period. It's a big deal for the world's second-largest economy, the only major one that expanded throughout the pandemic — and now at risk of missing its growth target of 6 percent for the entire year.

Normally, such a drastic slowdown would have put the ruling Communist Party in a tizzy. But this time, Xi Jinping knows this is the price he must pay for his big plans to curb rising inequality and boost the middle class at the expense of the CCP's traditional economic mantra: high growth above all else.

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Ian Bremmer's Quick Take:

Read Ian Bremmer's wide-ranging essay in Foreign Affairs that puts in perspective both the challenge, and the opportunity, that comes from the unprecedented power of Big Tech.

Hi, everybody. Ian Bremmer here on the road, something we haven't done very much recently, but will increasingly as we try to move through COVID. And I want to talk to you about a new article that I just put out in Foreign Affairs that I'm calling "The Technopolar Moment." Not unipolar, not bipolar, not multipolar, technopolar. What the hell does technopolar mean?

It means that increasingly big technology companies are themselves geopolitical actors. So to understand the future of the world, you can't just look at the United States, Europe and China. You need to look at the big tech companies, too.

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China gets away with a lot these days in Hong Kong, Xinjiang, and elsewhere. That's because over the past decade, its economy has experienced explosive growth, making it an indispensable trading partner for almost every country in the world. At the same time, China has been expanding its share of the global economy, and is now set to overtake the US as the world's biggest economic powerhouse in the near term. We take a look at China's annual growth rate and share of the global economy based on GDP over the past decade.

The European Union is, for better or worse, the most ambitious experiment in human history in institutionalized multinational cooperation. Its success depends on the willingness of its members to abide by its rules.

In recent years, the populist-nationalist governments of former Communist bloc members Hungary and Poland have flouted some of those rules in order to boost their own popularity with citizens suspicious of the EU's liberal values on issues like immigration and minority rights. In response, the EU has scolded these "illiberal" governments and threatened forceful action – so far without much effect.

The fight between EU institutions and Poland and Hungary has escalated.

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Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:

What is the legacy of Colin Powell?

Former Secretary of State Colin Powell tragically died of complications of COVID-19. He was the first Black Chairman of the Joint Chiefs of Staff, the first Black National Security Advisor and the first Black Secretary of State. And he leaves a legacy of a long career, dedicated almost entirely to public service.

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Can this guy defeat Viktor Orban? Hungary's opposition movement of odd bedfellows has finally settled on the person they think has the best chance of defeating PM Viktor Orbán at the ballot box: Péter Márki-Zay, a politically conservative small-town mayor from southeastern Hungary, who beat out left-leaning European Parliament member Klara Dobrev in a weekend poll. Márki-Zay has a lot going for him: as a devout Catholic and father of seven it will be hard for the ultraconservative Orbán to paint him as a progressive threat, even as Márki-Zay reaches out to reassure left-leaning groups that he will protect LGBTQ rights. What's more, Márki-Zay has little political baggage: until recently he was a marketing executive. But can the relatively inexperienced Márki-Zay keep the various opposition factions happy? The stakes couldn't be higher: since taking power more than a decade ago, Orbán has deliberately made Hungary into an "illiberal" state, cracking down on the press, undermining the rule of law, and clashing with the EU. Bonus: if Márki-Zay stays in the news, you get to say "Hódmezővásárhely" the name of the city he currently runs.

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5,600: Myanmar's military junta will release from prison 5,600 people who were jailed for protesting against last February's coup. The gesture, the biggest act of amnesty since the junta took power, comes just days after the Association of Southeast Asian Nations, which rarely interferes in members' internal affairs, said it would exclude the head of Myanmar's military from an upcoming regional meeting.

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Colin Powell's legacy

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