The Future Is Contested, Says INTEL Community
What’s New: The US Intelligence Community (IC) has issued the 7th edition of its Global Trends report, warning of a more “contested world.”
Why This Matters: The IC believes the future will “repeatedly test the resilience and adaptability of communities, states, and the international system, often exceeding the capacity of existing systems and models.”
Published every four years, the Global Trends report assesses the trends and dynamics that are believed will shape the geopolitical environment over the next two decades.
This report has three general sections: structural forces, emerging dynamics, and future scenarios.
Within the structural forces section, the authors examine the implications of advancing technologies — this is where I will focus this discussion. Here are the report’s bottomlines on tech:
“During the next two decades, the pace and impact of technological developments are likely to increase, transforming and improving human experiences and capabilities and offering the potential to tackle challenges such as aging, climate change, and low productivity growth, while creating new tensions and disruptions within and between societies, industries, and states.
The next decades will see increasing global competition for the core elements of technology supremacy, such as talent, knowledge, and markets, potentially resulting in new technological leaders or hegemonies.
The race for technological dominance is inextricably intertwined with evolving geopolitics and the broader US-China rivalry, but at the same time, technological advantage will be augmented by companies that have a long-term focus, resources, and global reach.
Spin off technologies and applications will be available for rapid adoption, enabling developing countries to take advantage of the latest core advances, develop global applications in niche areas, and contribute to global supply chains.”
The report’s commentary on “complicating government-corporate relationships” caught my eye:
“Public-private partnerships for investment, research, and development have been critical for attaining many technological breakthroughs and advantages, but core corporate and national interests do not naturally align. Large technology companies increasingly have resources, reach, and influence that rivals and even surpasses some states. National interests in maintaining technological control and advantage as well as protecting national security can be at odds with corporate interests in expanding global market share and increasing profits.”
This statement on “existential risks” is also interesting:
“Technology plays a role in both generating these existential risks and in mitigating them. Anthropomorphic risks include runaway AI, engineered pandemics, nanotechnology weapons, or nuclear war. Such low-probability, high-impact events are difficult to forecast and expensive to prepare for but identifying potential risks and developing mitigation strategies in advance can provide some resilience to exogenous shocks.”
What I’m Thinking:
Yep, I think they got it right. The structural forces, trends, and technologies that are identified are likely to decisively shape the next twenty years.
But I’m not sure this report means anything. Not to be too harsh, but there’s no meaningful advancement of this conversation within the report — it’s largely a “gist” of what is already a commonly accepted understanding of the world.
And that’s the problem. I’ve long said that our “business model” of intelligence is being disrupted — and this report is another example of this reality. To see this, you have to understand that the report was written by the Strategic Futures Group within the National Intelligence Council. These are experts drawn from around the intelligence community who are explicitly insulated from the demands of “current” intelligence so that they can do deep thinking research on the most strategic issues. There’s no one else. These are IC’s “wise men and women.” But instead of tracing out the secondary and tertiary implications of the dynamics they observe, they simply identify them and move on. This isn’t because the authors are dumb. It’s because they are ignorant. Ignorant of what’s actually happening in technology, why this is happening, and what is needed to realize the promises of emerging tech and to mitigate the most significant challenges. The authors will say, “That’s not the purpose of this report. We’re just drawing broad outlines of the future.” Well, if that’s the case, then I’m even more skeptical of the utility of papers like these.
We’re not keeping up. For at least two decades, political leaders and policymakers have decried the government’s inability to attract and retain technically proficient talent. And there has been no significant improvement along these lines during this same timeframe. Even worse, it is a compounding problem because — as technologies advance more rapidly (and they are) — the gap between the bleeding edge and our government’s ability to predict, understand, and prepare for these advancements keeps getting wider. One of the implications of all of this is that we get reports like these, reports that are intended to prepare policymakers and the public for the future but that really only describe the present with very little actual insight into the future. Maybe I’m just grumpy and I’m being too hard on the authors. (I’m writing this while the kid behind me on the plane keeps kicking my seat.) Or, maybe, if the stakes are as significant as the report suggests, we need to up our game.
China’s Digital Yuan Is Here
What’s New: The People’s Bank of China (PBOC) is issuing a digital yuan, the world’s first major central bank to create an electronic national currency.
Why This Matters: Digitized currency will greatly expand Beijing’s ability to track and to influence economic activities within its borders and, if adopted internationally, the currency could challenge American dominance of the global financial system.
Over the last several years, China’s digital payment industry has grown to more than $27 trillion (~16% of the country’s gross domestic product), with more than 90% of that market flowing through two companies: Tencent Holding’s WeChat Pay and Ant Financial’s Alipay.1
Each company has more than 900 million users and a significant portion of these transactions are mobile-to-mobile, meaning they never touch the state-run banking system. This, then, required the government to rely on private companies for access to this data.
Now, transactions using the digital yuan will flow across networks managed by the Chinese government and, importantly, will not be anonymized as is often the case with crypto currencies like Bitcoin and Litecoin.
“China has indicated the digital yuan will circulate alongside bills and coins for some time,” according to The Wall Street Journal. “Bankers and other analysts say Beijing aims to digitize all of its money eventually.”
What I’m Thinking:
This is just step one. At this point, it is unclear if other Chinese digital payment providers will have to adopt this digital currency or if the government simply intends to compete against them by making the nation’s official currency easier to spend. But, in light of Beijing’s insatiable appetite for control and for data — and after watching the Chinese Communist Party squash Ant Financial over the last several months — forced adoption of the central bank’s digital currency seems likely. It will also extend the country’s ability to “manage” its economy, as observed in the article above, “The money itself is programmable. Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jump start.”
A good way to evade US sanctions: The US dollar is critical for banks conducting international business and Washington has long insisted on being able to track transnational movements of currency to enforce financial sanctions. This is especially relevant for the more than 250 Chinese individuals that have been sanctioned over atrocities in Hong Kong and against ethnic minorities like Uighurs. The digital yuan, however, could allow sanctioned individuals to secretly exchanging money because they would occur outside of the SWIFT system that is used by commercial banks for International transfers and monitored by the US. A PBOC official hinted at this type of motivation last month when he said the new digital currency is intended to reassert China’s “monetary sovereignty.”
Moscow Throttles Twitter
What’s New: New research demonstrates Russia is slowing Twitter traffic to a crawl, rather than blocking the company outright.
Why This Matters: Governments around the world are looking for ways to harass and coerce tech platforms that are suspected of fomenting or enabling anti-government sentiment.
The throttling began on March 10, according to internet measurement firm Kentik.
Russia implemented the throttling effort by targeting the “t.co” domain used by Twitter to host content shared on the site, according to Wired.
But, this is leading to wide-scale problems for other sites like Microsoft.com and reddit.com as well.
The Russian regulatory agency, Roskomnadzor, said it slowed access to Twitter because the platform allegedly did not remove content associated with pornography, suicide, and drugs.
Twitter traffic is slowed by “middle boxes” that are installed by Russian ISPs. These middle boxes inspect data flowing between endusers and the platform and appear to extract information like the “server name identification” or SNI for short.
“Contrary to blocking, where access to the content is blocked, throttling aims to degrade the quality of service, making it nearly impossible for users to distinguish imposed/intentional throttling from nuanced reasons such as high server load or a network congestion,” researchers with Censored Planet, a censorship measurement platform that collects data in more than 200 countries, wrote in a report. “With the prevalence of ‘dual-use’ technologies such as deep packet inspection devices (DPIs), throttling is straightforward for authorities to implement yet hard for users to attribute or circumvent.”
What I’m Thinking: There are countermeasures, such as Encrypted ClientHello (ECH), that force censors to block traffic at the IP-level — something most governments are slow to do because it risks blocking essential services as well. Even so, Moscow’s throttling demonstrates that government leaders are on the lookout for new ways to assert themselves over digital platforms, but also that they prefer to do so without outright banning these companies. For now.
That’s it for this Monday Brief. Thanks for reading, and if you think someone else would like this newsletter, please share it with your friends and followers.
Have a great week!
Lulu Yilun Chen and Zheping Huang, “Alipay, Tencent Beware: China’s Digital Yuan Is Closing In,” Bloomberg, October 24, 2019, https://www.bloomberg.com/news/articles/2019-10-24/alipay-tencent-beware-china-s-digital-yuan-is-closing-in (accessed November 16, 2019).