The brand new world technological order: two worlds in a single world
Isabel Maria Alvaro
Public order and the internet
The Telefónica Foundation says goodbye to the year with the last face-to-face event of the TELOS2021 forum. The aim of this meeting was to examine the dichotomy of the current international order, mainly in the international technological field. By and large, this order is characterized by the so-called “New Cold War”, which reflects the existing tensions between countries to be leaders in innovation and development of new technologies.
Áurea Moltó, Director of “Política Exterior” magazine, opened the event by highlighting the key role technology plays in the world order. The internet has opened the door to an unexplored and apparently more collaborative avenue. However, we have already seen that this is not the case. The expected cooperation has turned into a rivalry. This is reflected both in the technology race and in the approaches of the countries to digital transformation, which have led to “two worlds in one world”.
Christoph Steck (Director of Public Policy and Internet at Telefónica), Alicia Richart (General Manager for Spain and Portugal at Afiniti), Borja Bergareche Sainz de los Terreros (Communication and Corporate Leadership Partner at Harmon) and Belén Romana (member of several boards of directors international companies) continued the debate.
Belén Romana highlighted the strategic power of telecommunications networks and the Internet since the First World War. From that moment on, the United States implemented a hegemonic model that positioned it at the forefront of innovation. Still, that wasn’t the end of the story. China has noted, “understood and put into practice,” the steps to be followed, she said.
With a more European focus, Borja Bergareche pointed out two central points that characterize the digital revolution in the region: the democratization of technologies and the speed of transformation. First, technological advances have made technology accessible to all and favored the social and economic development of the population. Second, digital platforms are evolving by leaps and bounds, making it difficult to keep up with them on the regulatory front, especially if regulators don’t have a deep digital knowledge. Alicia Richart confirmed this view, emphasizing how technological revolutions have gone from measuring in decades to measuring in weeks. They are also associated with changes affecting the political sphere, such as the emergence of populisms, fueled by the disinformation characteristic of this new digital era.
Christoph Steck, for his part, emphasized the fundamental importance of technology for the development of countries. The new digital age is portrayed as a disruptive phase of accelerated growth in which Moore’s Law is no longer applicable. This opens up a wide range of possibilities while breaking many of the current paradigms. While this poses a challenge to the regulatory response of governments and international organizations, active public-private collaboration can cope with these rapid changes.
Before the first industrial revolution, the west and the east had similar growth rates, both prosperous and advanced. The invention of the steam engine, however, marked the separation between these two regions, which drove the western countries forward and left the eastern regions behind. From then on, European countries and the United States took the lead in development. The fourth industrial – or technological – revolution is now beginning, but it is no longer so clear who is leading it.
❝ The digital world knows no borders.
Unlike previous revolutions, the Fourth Industrial Revolution is fast, changing, and limitless. On the one hand, it is no longer dominated by a single technology as in its predecessors, but by the sum of new technologies such as 5G, artificial intelligence, blockchain, data or crypto currencies. On the other hand, the internet has “hacked” the established order, breaking the link between economy and territory through digital globalization and the transfer of technology across borders that are now liquid.
The limitless possibilities of new technologies and the internet have started a race for innovation in which China and the US are the current two main characters. However, this race has led to increased distrust and rivalry, which has led to “de-globalization tendencies”. This debate raises the question of where Europe stands in this new order.
So far, Europe has tried to maintain good relations with both countries without explicitly referring to either of them. While the United States is a great ally, China is a great trading partner. However, Alicia Richart pointed out that Europe is closer to the United States in terms of values. “There are rights and climate change tensions with China,” she said, making a closer relationship difficult.
On techno-economic issues, Alicia Richart argued that the United States is leading the technological revolution and by far dominating new technologies such as artificial intelligence, blockchain and the Internet of Things. In contrast, Belén Romana pointed out that the United States is dependent on Asia, mainly China, as those countries have control over the production of the semiconductors that are essential for technological development.
Conversely, Christoph Steck declared that Europe was actively working on regulating the digital world and influencing several countries with the so-called “Brussels effect”. In addition, Ericsson and Nokia – European companies – are stepping up against Chinese companies in adopting 5G, while the United States has no leading company in this area. Although Taiwan, South Korea, and China dominate semiconductor production, it is the Netherlands that make the machines that make them. Finally, he found that Europe is leading the generation of microprocessors, making the smallest microprocessors on the market.
During this debate it became clear that the European Union must further consolidate itself as a technology power by weakening its weaknesses and strengthening its strengths. The former include the weakening of European integration, an unattractive fiscal framework for foreign investment, the reliance on semiconductors, difficulties in developing “unicorns” and a lack of expertise in digital and technological issues on the part of national and European regulators. One of Europe’s strengths is not only the important role of Europe’s regulators and its ability to create international standards, but also its extensive experience in reaching international agreements and its willingness to strengthen public-private cooperation in order to become more resilient and sovereign.
Europe must focus on its strengths in order to become a competitive power in the new digital age that can withstand the US and China.