Skip to the content

Are we heading for a technology Cold War?
personCat Symonds eventJun 26, 2019

Are we heading for a technology Cold War?

With the US and China locked in an escalating trade war and the fallout already being felt on the stock market, should we be bracing ourselves for a new kind of cold war driven by technology and finance?

After months of growing tension, Trump declared last month that Huawei Technologies, the Chinese telecommunications giant, posed a national security threat and the US administration subsequently imposed sweeping tariffs on China for its alleged unfair trade practices. Huawei, amongst other Chinese companies, has been put on a US trade blacklist and the tension is rising.

The year-long struggle between the two superpowers has already had an impact on trade, investments and global politics, and if trade battles escalate into a technology “cold war” it could have a global effect on supply chains and trade networks. How things will progress is anybody’s guess.

Huawei: What happened?

Huawei has been the focus of intense scrutiny this year. Several countries, including the US, raised security concerns with the Chinese telecoms giant and Trump’s administration blacklisted Huawei from trading with US companies last month. The trade blacklist, which extends far beyond Huawei, prevented US suppliers from selling equipment to boycotted companies and banned the technology and services of any international entity deemed a national security risk.

This could mean that Huawei devices will no longer have access to Google apps such as Maps, YouTube, Play Store and Google Assistant. It won’t affect smartphone users in China, where Google services are restricted, but it could be a game-changer for markets in Europe and the Middle East where Android is one of the leading operating systems. It could potentially result in technological divisions between the two giant economies on a grand scale.

Although the US embargo on Huawei has been suspended until August to allow time to prepare for the ban, things are looking rocky to say the least.

Source: Huawei

What exactly is a technology Cold War?

China and the US have a long and complicated history and there are many factors that have influenced the current state of affairs, not least China’s increasing stance as a global economic power. But there are other factors at play here, too. We are living through a technological revolution, a data-driven economy fuelled by artificial intelligence and global markets, and global rivalry between large economies is predictably inevitable.

The technology revolution generated by big data, artificial intelligence and machine learning has a big hand to play. Aside from creating the perfect landscape for strategic trade and rivalry, it has raised questions about security and the free-flow of data across borders. And it has fuelled economic rivalries.

The term “Technology Cold War” has been coined from parallels between the US-Soviet Cold War and the current trade dispute between Washington and Beijing. The ban on Chinese access to US companies, the adoption of the US Foreign Investment Risk Review Modernization Act (FIRRMA) and the US export ban of sensitive technology can all be construed as a way to control and limit China’s ability to use technology to gain technological and political supremacy.

Much like the Soviet-US Cold War, the new tech cold war is fuelled by the control of information, geopolitical paranoia and military and ideological domains. China and the US are global superpowers with intrinsically incompatible approaches to domestic governance as well as mutual lingering suspicions.

What’s behind it all?

Much of the new world order can be traced back to the dawn of the internet and subsequent technological revolution. The United States and China are two nations based on vastly contrasting ideologies, and they now inhabit the same digital ecosystem. Borders are just a click away. For the first time in history we are existing in a global economy with shared business and military networks, and this comes with its own set of challenges. How do you regulate the free-flow of data across international borders when every country has its own set of laws and regulations?

Another big factor is rivalry. Both nations are fighting for the top spot in the global technology race and there is a great degree of mutual suspicion. The US’s massive Belt and Road Initiative, the Made in China 2025 plans, and the growing prevalence of companies such as Huawei have all contributed to these fears. It’s a clash of political ideologies, market restrictions and intellectual property rights.

Ultimately, it’s a power-struggle between two very different world views.

Source: Adobe Stock

Is a technology Cold War inevitable?

During the Cold War of the 20th Century, half the world ran on the technologies, machinery, and political ideologies of the Soviet Union, and the other half adopted those of the United States and its allies. Is our technology headed the same way? Will one half of the world be dominated by Amazon, Google and Tesla and the other by Baidu, Alibaba and WeChat? Will the fight for technological dominance result in the redefinition of global supply chains and networks?

Most companies and investors are predicting a struggle but not a crisis, although fears that other Chinese tech firms will be blacklisted have already caused shares to tumble. If we stand any chance of maintaining financial stability as the technological revolution continues to unfold then there have to be some serious policy changes on a global level. The free flow of data across borders needs to be regulated, whilst maintaining open channels for commercial services. Regulations need to focus on the fair and secure international sharing of data and all countries must have a mutual stake in ensuring the integrity of data.

If we don’t act now then the ripple effects that we are already feeling have the power to grow and change the world as we know it.

About the author
Cat Symonds
See full profile

Cat Symonds is a freelance writer and translator based in sunny Barcelona. Founder of The Content CAT (http://www.thecontentcat.com), she provides copywriting and translation services (Spanish, French and Catalan to English), with particular focus on corporate blogs and websites, articles of interest and ghost writing.

Latest from Cat Symonds

To enable comments sign up for a Disqus account and enter your Disqus shortname in the Articulate node settings.

Recommended articles

Smarter, safer drilling: innovation in the oil and gas industry

Home is where the AI is

New perspectives required to create AI fit for humanity

How software can keep the water flowing

AI makes a positive mark in image recognition and automation

Latest articles

Why automation could lead to mass unemployment and how a Universal Basic Income might be the only solution

CERN’s asset management supercollider

5 Tips on How to Innovate

Process Model Innovation: A vital part of Modern Dual Innovation

Change activism for the really agile enterprise

Outro

Science and technology are the principal drivers of human progress. The creation of technology is hindered by many problems including cost, access to expertise, counter productive attitudes to risk, and lack of iterative multi-disciplinary collaboration. We believe that the failure of technology to properly empower organisations is due to a misunderstanding of the nature of the software creation process, and a mismatch between that process and the organisational structures that often surround it.