Cyber Scene #62 - From Cyber Week Back to the Future
Cyber Scene #62 -
From Cyber Week Back to the Future
This Cyber Scene will look at what some prescient futurists see in the coming years—regular human years and not cyber "years" which accelerate progressively. Then we will explore what is going on now with respect to the impact of cyber on lives worldwide and on countries, First World and Third.
The first perspective for your consideration is Foreign Affairs' (Nov/Dec/2021) "The Technopolar Movement: How Digital Powers Will Reshape the Global Order." The strategist, political scientist Ian Bremmer, comes with a strong history of political risk analysis, TED talks, Stanford University, and its Hoover Institution, and is the founder and president of the Eurasia group as well as the author of 10 books on geopolitical issues. This particular article posits that a sea change in global affairs is in process, and the tech world, not that of domestic political clout, is rising. He asserts:
"States have been the primary actors in global affairs for nearly 400 years. That is starting to change, as a handful of large technology companies rival them for geopolitical influence. The aftermath of the January 6 riot serves as the latest proof that Amazon, Apple, Facebook, Google, and Twitter are no longer merely large companies; they have taken control of aspects of society, the economy and national security that were long the exclusive preserve of the state."
He goes on to say that the US is not alone: China, as well, has Alibaba, ByteDance and Tencent as nonstate tech actors who are reshaping their country but with Chinese characteristics. European companies are in a totally different, distant, class behind. Big Tech companies are not instruments, or as he puts it, "foot soldiers" of the state. In the January 6 example, the tech world acted on its own initiative, not at the behest of the state. Bremmer suggests that a new category of classifying geopolitical leaders is needed. He stakes out three geopolitical postures and worldviews: globalism, nationalism, and techno-utopianism. They are not dependent on physical space, but rather digital space, which is far more powerful and agile. They are also well funded. He concludes this very pithy analysis with a call to understand better the geopolitical power of the digital tech world.
This strength and agility are also highlighted by the Economist (6 Nov) in "Reinvention as a service." The article highlights the relative ease with which Big Tech evolves in the digital world. The CEO of Qualcomm is cited as saying that "We are a different company now. We are no longer focused just on mobile. And we have the numbers to back it up." Other historic big tech companies such as Cisco, Dell, Hewlett Packard, and IBM are moving into cloud computing and artificial intelligence.
A new, vice reinvented, entity on the (Wall) street is discussed by former Treasury Deputy Secretary under the Trump administration Justin Muzinich in Foreign Affairs (Nov/Dec 2021) "America's Crypto Conundrum: Protecting Security Without Crushing Innovation." Digital currency, he notes, often derives from a belief that government should have less control over money. But again, the dual-edged sword appears: "Digit currencies are driving tremendous innovation that has the potential to make whole economic sectors more efficient. But they also pose various national security and financial threats and could even diminish US influence abroad." He observes that the upside is that digital currency allows the private market to call the shots, whereas the downside is that some view cryptocurrencies as nefarious tools for illicit finance.
The issue of authority over digital currency is huge: there is no gold or guarantee backing Bitcoins. In fact, with offshore activity beyond the reach of the US, the G-7, the G-20 and other institutions (e.g., the US Federal Reserve or the European Central Bank), the wizard behind the curtain is unknown. However, despite the increased risks, it is faster and cheaper than financial alternatives. He concludes that it is important that some control, "…not only by software developers but also by elected representatives who are accountable to the American people" be created.
Digital financial transmission in non-Bitcoin wrappers is rampant. From your online holiday shopping of Black Friday deals to ever-increasing variations on PayPal financial transfers, the world of digital finance is in revolutionary mode, even on Wall Street, at the US Federal Reserve, and in the Third World. The Economist (6 Nov), in "Turf Wars: Africa's fintech firms vie for domination," observes that "The payments frenzy is going global, and Africa is catching the bug." Several of Africa's financial tech firms surpassed billion-dollar valuations. On the subject of billions, most of the next 2 billion human beings are expected to be Africans—by 2025 there will be 1.5bn Africans--so the clientele will expand. The investors in Africa's fintech unicorns are international. Among some of the newest successes are Soft Bank (Japan), Chipper Cash (Jeff Bezos), OPay, Wave, and Flutterwave. The agility of digital fintechs is called out: "Africa is an obvious choice for fintech investors. They are betting that young African talent can innovate its way out of the region's most pressing financial problems faster than legacy firms can." The relatively new African Continental Free Trade Area now includes 38 of the 54 countries on the continent. Moreover, the Pan-African Payment and Settlement System was launched in September 2021 which supports these systems. Returns on investment are already strong; some investors believe Africa resembles China in the 1970s. Digital currency is expanding on "turf" that is enormous and otherwise often inaccessible, which harkens back to earlier discussion in this Cyber Scene of the role of the digital world's attributes regarding agility rather than physical ground.
Returning to Black Friday, CBS reports (17 Nov, online and on video) that cyberattack concerns are increasing across the timespan from Thanksgiving to the New Year. With the pandemic and many security staff being out of the office, "…businesses say they're worried about the possibility they'll face cyber intrusions this holiday season, a time when many of their cybersecurity operations rely on skeleton staff."
Relatedly, and as if in a parallel universe with the Covid pandemic, the title "digital pandemic" is applied to 2021 in the Economist's magnum opus (8 Nov) "The World Ahead 2022: The digital pandemic of ransomware attacks will continue." Economist Defence editor Shashank Joshi predicts: "Until firms get the basics right, the digital pandemic will rage on." Joshi points out that ransoms paid in cryptocurrency and held anonymously, are hard to unmask. Although the US has recovered a surprising amount of ransom payments in Bitcoin, this is exceptional and in no way usual. The editor goes on to underscore that free-flowing ransom Bitcoin by a lone wolf classified as cyber-crime is different from cyber-war, but the distinctions are still blurry. Moreover, even seeking newly created ransom insurance is, well, no insurance. The industry, valued at $7bn in 2020, is expected to reach $20bn in premiums by 2025. At least two of the three parties seem to be making a profit.
Another weakness in a digital big tech world, relayed by the Wall Streel Journal's "Chinese Tech Giants, Under Pressure From Regulation, Now Face Economic Drag," is China's macroeconomic slowdown, particularly impacting Tencent, Meituan, Baidu and Alibaba. Some of this may be attributed to new Chinese government policies that increase control over several cyber areas. This of course harkens back to the relationship between the freer-wheeling Big Tech companies and the State. As of Yang's report of 26 November, Chinese Big Techs are taking a hit which may be related to their having had their agile wings clipped.
Reminding the readership that while volcanic cyber events occur worldwide, US officials inside the beltway in Washington, D.C. are hard at work. Work continues as the White House connects with passage and implementation of trillions of projected infrastructure and other bills.
Capitol Hill itself is also working hard. The National Defense Authorization Act for FY2022 (NDAA 2022), having passed the House, may be approved by the Senate by the time you read this. The Hill's Jordain Carney (16 Nov) in "Democrats mull cutting into Thanksgiving break amid pile up…" captured the urgency to pass this mega bill as soon as possible, as Senator Schumer (D-NY) tried unsuccessfully to have the Senate work through the Thanksgiving holiday to wrap up and ideally vote on NDAA 2022. The Senate usually breaks on the Thursday the week before Thanksgiving and has worked through much of Thanksgiving week this year. As it stands, they reconvened on 29 Nov. and may have closed in on the vote by this publication. It was previously passed by the House, and usually receives strong bipartisan support. But fiscal year 2022 began on 1 October 2021. Some years the NDAA delays have caused serious problems for multiyear funding projects and impeded government work when continuing resolution funding dried up. Cyber is a central component of NDAA 2022 with dozens of bills under the NDAA 2022 umbrella.