The Great Tech Game

1. Technology is reshaping the global economic landscape and power dynamics

Technology is shaping our destinies: as individuals, as families, as nations, as societies, as a world and, increasingly, as humans.

Technological revolution. The world is undergoing a profound transformation driven by rapid technological advancements. This digital revolution is comparable in scale and impact to the agricultural and industrial revolutions of the past. It is fundamentally altering how economies function, how nations compete, and how power is distributed globally.

Shifting paradigms. Traditional measures of economic strength, such as manufacturing output or natural resource wealth, are being supplanted by technological prowess. Countries that excel in areas like artificial intelligence, 5G networks, and data analytics are gaining significant advantages in productivity, innovation, and strategic influence.

Global recalibration. As technology reshapes industries and creates new ones, it is forcing a recalibration of global economic hierarchies. Established powers must adapt to maintain their position, while emerging nations see opportunities to leapfrog ahead through strategic investments in digital infrastructure and innovation ecosystems.

2. The digital economy is becoming the primary driver of national wealth and competitiveness

Technology is the new wealth of nations.

Economic transformation. The digital economy, encompassing e-commerce, digital services, and technology sectors, is growing at a far faster rate than traditional economic segments. It is increasingly becoming the primary engine of economic growth, job creation, and value generation for nations.

Key components:

• Digital infrastructure (hardware, software, networks)
• E-commerce and digital trade
• Digital and cloud services
• Data as a valuable resource

Measurement challenges. Accurately quantifying the digital economy remains difficult due to rapidly evolving technologies and business models. However, estimates suggest it already accounts for a significant and growing portion of global GDP, with some countries seeing their digital sectors contribute over 10% to their economies.

3. A new set of winners and losers are emerging in the global tech race

Nations, especially those that have lagged behind in productivity because they did not industrialize as fast as others in the last few centuries, have a unique opportunity now to leverage the new technologies to increase their productivity to global best-in-class levels.

Technological leapfrogging. The digital era offers opportunities for developing nations to bypass traditional stages of industrialization and rapidly advance their economies through strategic investments in technology. Countries like China and India have made significant strides in areas such as mobile payments and digital services.

Diverging fortunes. However, there is also a risk of a widening "digital divide" between tech leaders and laggards. Nations that fail to build robust digital economies risk falling further behind in economic development and global influence.

Strategies for success:

• Investing in digital infrastructure and skills
• Fostering innovation ecosystems
• Attracting tech talent and investment
• Developing niche expertise in emerging technologies

4. Geopolitics is increasingly intertwined with technological dominance

The Great Tech Game—this global contest for technological, economic and geopolitical dominance—is starting to shape the world order.

Tech-driven geopolitics. Control over critical technologies, data flows, and digital infrastructure is becoming a key determinant of geopolitical power. Nations are increasingly viewing technological leadership as essential for national security and global influence.

Flashpoints:

• 5G network deployments
• Semiconductor supply chains
• Control of rare earth minerals
• AI and quantum computing development
• Digital trade and data governance

US-China rivalry. The competition between the United States and China for technological supremacy is reshaping global alignments and forcing other nations to choose sides in what some call a "new Cold War" centered on technology.

5. Cyberspace has become a critical domain for espionage and warfare

The Golden Age of Espionage.

Evolving battlefield. Cyberspace has emerged as a new frontier for conflict, complementing traditional domains of land, sea, air, and space. Nations are rapidly developing offensive and defensive cyber capabilities.

Key aspects:

• State-sponsored hacking and cybercrime
• Critical infrastructure vulnerabilities
• Information warfare and disinformation campaigns
• Cyber espionage targeting intellectual property and state secrets

Blurred lines. The nature of cyberwarfare often blurs the distinctions between state and non-state actors, as well as between peacetime and wartime activities. This creates new challenges for international law and norms governing conflict.

6. New alliances and partnerships are forming based on technological capabilities

Countries that are important from a technology perspective—either as large digital markets or as technologically advanced nations or having critical resources for technology supply chains—are also assuming greater importance as potential allies and partners.

Tech-centric alliances. Traditional geopolitical alliances are being reshaped by technological considerations. Countries are forming new partnerships based on shared interests in digital development, cybersecurity, and technological standards-setting.

Examples:

• The Quad (US, Japan, India, Australia) focusing on tech cooperation
• China's Digital Silk Road initiative
• US-led "Clean Network" program for 5G

Strategic realignments. Some countries are reassessing longstanding relationships and seeking new partners that can provide technological advantages or access to critical tech markets.

7. The tug of war between states and Big Tech is redefining governance

Big Tech is mounting the biggest challenge in history to states and governments, on multiple levels.

Power struggle. The immense wealth, influence, and technological capabilities of major tech companies are challenging traditional notions of state sovereignty and governance. Issues like data privacy, content moderation, and digital taxation are at the forefront of this conflict.

Competing visions:

• Big Tech: Emphasis on global digital commons, free flow of information
• Nation-states: Asserting digital sovereignty, protecting national interests

Regulatory battles. Governments worldwide are grappling with how to effectively regulate Big Tech while fostering innovation. The outcomes of these regulatory efforts will have profound implications for the future of the digital economy and the balance of power between states and tech giants.

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Last updated: November 21, 2024