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DIGITAL CHESSBOARD

At a time when the global narrative is overwhelmed by the ‘chips shortage’, an overview of the semiconductor industry would be timely.

This article is based on an interaction with Dr Arogyaswami Paulraj of Stanford University, who has worked in the semiconductor industry for 30 years. He is an Advisor to India’s Semiconductor Mission.

Semiconductors enable nearly 80 per cent of global GDP, and this dependence is proliferating. It is no secret that India is trying to make inroads into the global semiconductor industry. This is easier said than done because semiconductor technology is not only challenging, requiring both high skills and huge investments, the industry is extremely competitive and has a high barrier to entry. India has to start from the bottom, as its global market share is currently negligible. The good news is that there is a robust and renewed initiative by the Indian government to build a small domestic capability to begin with.

Semiconductors are the key enabler today. Military, economic, and geopolitical power are built on the foundation of semiconductor chips. Without a domestic capacity to design and manufacture chips, no nation can aspire to great power status. The example of a typical iPhone explains the value chain of semiconductors; the value of the semiconductors in it is around 76 per cent, with other parts taking 12 per cent and labour cost trailing at 3 per cent! Therefore, AI, communications, telecom, the internet, medicine, transportation, and aviation are fundamental and will grow. A country as large as India cannot afford to be left behind in the semiconductor race. The key to the industry is knowledge and experience with a strong PhD background and at least a quarter of a century of experience in the industry. Such experts cannot be grown overnight; the real game is finding the right people.

A GLIMPSE OF THE PAST

ductor industry started in Silicon Valley from a humble beginning, for herein, there is a lesson for India.

William Bradford Shockley wanted to start a business, so he moved to Silicon Valley in 1955. Since the military was interested in the development of chips, he opened his Shockley Labs, recruiting a group of young PhD graduates to develop and produce new semiconductor devices.

While Shockley had received a Nobel Prize in Physics and was an experienced researcher, his management of the group – the Traitorous Eight – was authoritarian and unpopular. This was accentuated by Shockley’s research focus not proving fruitful.

After the demand for Shockley to be replaced was rebuffed, the Eight left Shockley Semiconductor Laboratory in 1957 to form their own company, Fairchild Semiconductor.

Fairchild was not into technology, but somehow, Sherman Mills Fairchild, an American businessman and investor, was ready to invest in them. The newly founded Fairchild Semiconductor soon became a semiconductor industry leader. In 1960, it became an incubator of Silicon Valley and was directly or indirectly involved in creating dozens of corporations,

Source : Investing .com

including Intel and AMD.

However, Robert Noyce and Gordon Moore (part of the Traitorous Eight) were growing restless. Fairchild Semiconductors operated as a subsidiary of Fairchild Camera and Instrument, and they felt the parent company wasn’t reinvesting enough of the proceeds from the highly profitable semiconductor business into the R&D of new semiconductor technologies.

In 1968, Noyce and Moore resigned from Fairchild, incorporated their new venture, Intel, on July 18th and committed to continued innovation, a fundamental component of their company’s culture. Andrew Stephen Grove, a Hungarian-American businessman and engineer, joined Intel on its incorporation, although he was not a founder. He served as the third CEO of Intel Corporation.

Initially, Intel primarily manufactured static memory chips for mainframe computers, but in the early/mid-1970s, Intel introduced one of the earliest digital watches, an electronic calculator, and the world’s first general-purpose microprocessor, the 4-bit 4004. By 1974 Intel had developed the 8-bit 8008 and, quickly after that, in 1975, the 8080 processor, which would become the core of the Altair, the world’s first so-called PC (personal computer), which began the PC revolution.

Soon came the 8086 16-bit microprocessor and a cost-reduced version, the 8088, which IBM chose for its IBM PC, which brought personal computers to the masses. In 1985, Intel produced the 32-bit 80386 microprocessor, which began a long line of increasingly powerful microprocessors, including the 80486, the Pentium, and a plethora of supporting integrated circuits and computers built with them. All under Grove’s leadership. Silicon Valley also started booming because of this. There were other companies around that time, but it really happened after 2004. And today, it rules the world.

UNDERSTANDING THE INDUSTRY

The value-added revenue of the semiconductor industry today is about $600 billion per year, and the market cap is about 3.35 trillion dollars. The industry is divided into three blocks: Fabless, IDM, and Fab/Foundry.

A fabless company designs, develops, and markets semiconductor products but does not manufacture them. This business model allows fabless companies to focus on their core competency of product development while leaving manufacturing to those with the necessary facilities and expertise.

There are many fabless MNC operations in India; Taiwan, the United States, Japan, South Korea, and China are the main players. India has a lot of talent. However, as long as India does not have a headquarter a semiconductor company of its own, it will have no value in the world.

Technology nodes are very critical. The area and the chip’s power are very critical; the more you can pack into its small size, the greater its power.

Today, chips have many billion transistors, and some AI chips out of China now have 1.6 trillion transistors. Taiwan’s TSMC tops the industry pyramid with 5 nm technology, with U.S. and China way behind where 3 nm tech is concerned.

In memory, Samsung is at 7 nm. The key to the industry is knowledge and experience with a strong PhD background and at least a quarter of a century of experience in the industry. Such experts cannot be grown overnight; the real game is finding the right people. China has no inhibition in stealing talent from TMSC, and Samsung, just like Japan did in the 1980s, luring talent from the U.S. Today, China is willing to pay large amounts to attract talent from Taiwan and South Korea.

R&D is the winning hand in the industry; out of $600 billion in revenue, almost 50 per cent would flow back as R&D. When dealing with 5 and 3 nm technology, it requires deep knowledge of the quantum mechanical type of modelling, which is extremely complex.

TSMC took the lead because its innovative leaders, like Morris Chang focused on building talent rather than making quick money, unlike U.S. companies, which are ruled by the stock market.

Intel lost the edge because it was always running toward stock pricing, so R&D investments were flagged. The captive pool of talent in Taiwan is a cause of so much worry in Washington; if Beijing unifies Taiwan peacefully or by force, this talent will fall into its lap like a ripe plum! If the U.S. decides to prevent such an eventuality, matching force by force, the world is staring at a potential nuclear Armageddon.

CHALLENGES AHEAD

The semiconductor industry is a very tough industry to enter, and India must be prepared to face barriers on geopolitical issues. So, it’s not for the faint-hearted. While India has the talent for it, the government must step in because it’s too expensive. Moreover, there are other issues – it needs law, taxation, and so many other incentives to make it happen. A lot more still needs to be done if India wants to compete with neighbouring countries like China. While the political will at all levels is very strong, knowledge about the industry is lacking, especially at bureaucratic levels. India, therefore, needs industry experts to advise the government, even if we have to explore overseas for suitable candidates, as there are none, especially in the fab industry.

MNCs in the India-based fabless industry have no time to spare to advise the government, as the stiff competition keeps them fully engaged in building up their Indian operations.

No country is self-reliant, and even the best of fabless companies deal with many EDA companies. The supply chain at the fab level is about 2,000 companies, many of which are in China. But of course, the most critical instrumentation requirements that China doesn’t have are ASML, Lam Research, Applied Materials, and Token Electronics.

So it’s a global system. India needs to somehow get into this exclusive club and become a participant at some level. The first objective is to build an Indian IP while outsourcing other things.

There are spaces in the high-tech mass consumption industry where India can get a toehold. One is advanced instrumentation, where ASML is the market leader. A typical electronic package that comes in a small box costs nearly $125 million, and there is a waiting list for its purchase as the production rate is only 25. Another field is electro-optics which today is dominated by Zeiss.

Commercial jet engines are another segment that China is trying to break into to join the U.S. and EU. The core issue is developing the talent pool and creating the training system and skill development so that India can manage capital, drive that capital, and use the talent pool to create indigenous IPs.

SEMICONDUCTOR TOP 7 by revenues, Q3 2022

* Qualcomm - excluding QTL revenue * Excluding pure-play foundries like TSMC to avoid double counting of industry revenue * Excluding Apple and Huawei developments for in-house semiconductor chip designs

TURNING ON THE HEAT!

The US-China tech war is centred around the all-powerful chip, with the ultimate objective being future geopolitical dominance.

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Once a strong proponent of China’s transition from a socialist into an all-out market economy, and as a driver of globalisation, in the last decade, the U.S. has dramatically changed its stance. From close business allies, today, both nations face a sharpening trade and tech war that has global implications.

While the tensions originate in a dispute over trade and unfair tariffs, they quickly morphed into a competition over core technologies-5G, artificial intelligence (AI) and quantum computing. And at the foundational level, the cause of the conflict is nothing more than the ubiquitous chip, the pulsating heart of all modern electronics. Clearly, technology has taken over the geopolitics domain raising the stakes for both powers in their rivalry. The ripples have been felt far and wide, with even European allies not being spared.

A LOOMING CONFLICT

In 2015, the Chinese Ministry of Industry and Information Technology released a ‘Made in China (MIC) 2025’ document which aimed at global leadership in three core tech areas-robotics, IT and clean energy, amongst many others. The document spoke about transforming China from a lowend manufacturer (with which the West was comfortable) to a high-end producer of goods (which threatened the West’s tech superiority).

The underlining theme of the vision was China’s burning desire to shed the shackles of western tech dependence and trailblaze its independent path for technological parity, if not superiority, with the U.S. The MIC 2025 sought to achieve the target of domestic core components in hightech manufacturing from 40 per cent in 2020 to 70 per cent by 2025. Some analysts call the MIC 2025 the trigger for the trade and the tech war between the U.S. and China.

The U.S.-China tech war had been simmering since the early 2000s largely over Huawei’s 5 G leadership and its close affinity to the Chinese government, particularly the PLA. A spate of sanctions had targeted Huawei rendering the company unable to compete in the global telecom market. Another telecom giant ZTE faced crippling U.S. sanctions for selling U.S.-originated technology to Iran. The tensions rose even further when the U.S. Trade Representative accused China of stealing U.S. IPRs and illegally transferring cutting-edge technology.

Amidst the noise and confusion of the 2016 U.S. Presidential elections, the MIC 2025 escaped scrutiny till 2018, when President Trump retaliated strongly. The tech war rapidly gathered momentum as President Trump led an all-out offensive to ‘block’ China from gaining tech superiority on the back of U.S.-origin tech innovations. President Trump fired the first shot in 2018 when he imposed a stiff 25 per cent tariff on U.S. $ 34 billion in Chinese exports, largely on high-tech items. Also, the calls for ‘decoupling’ from China became strident with bipartisan support.

Not willing to fight the debilitating tariff war, Beijing focussed on tech self -sufficiency with President Xi Jinping calling for ‘the path of self-reliance amid rising unilateralism and protectionism in the present world.” Without further delay, the Chinese intensified its investments to fast-track its semiconductor industry with policies, tax rebates, subsidies and attracting overseas talent to design chips at the 28 nm node or lower.

In its 14th Five Year Plan (2021-2025), the emphasis was on new digital industries, including AI, Big Data, blockchain, and cloud computing and under vision 2035, resources would be poured into all these domains.

President Joe Biden’s signing of the Chips and Science Act 2022 committed nearly $280 billion to domestic semiconductor research and manufacturing. This was a clear signal to China that the U.S was not going to give away its tech lead easily. The most significant volley was fired in October this year with wide-ranging export controls on technology aimed to cut off China from semiconductor and chip manufacturing equipment and know-how.

Clearly, technology has taken over the geopolitics domain raising the stakes for both powers in their rivalry. The ripples have been felt far and wide, with even European allies not being spared. AMSL, a Dutch company, is the world’s biggest supplier of advanced chipmaking equipment and has the monopoly on the design and manufacture of lithography machines used to print ultra-small complex designs on microchip wafers.

It is now being threatened with sanctions by the U.S. for selling critical components to China. Similar sanctions are dangling over the heads of many Japanese, South Korean and Taiwanese manufacturers of hightech components based on U.S. patents.

A DECLINING POWER?

Unlike the Russians, who mostly rely on hacking, the Chinese are looking at more long-term measures to overcome global U.S. dominance. There is a genuine fear that the U.S. is slowly slipping off from the dominant position in the semiconductor and wider electronic manufacturing sector it once had. Significant gaps have come up in the production chain in the U.S. semiconductor sector. Even though the U.S. remains a leader in the global production of semiconductors and controls a large share of the world electronics market, the total manufacturing capacity of U.S. chip production has fallen, especially in those required for more advanced devices. U.S. companies are relying on production centres based in Taiwan and South Korea more than ever. Reliance on third countries to manufacture critical technology is never a good idea, even in normal times.

The U.S. has no way to monitor the production of a device produced outside its jurisdiction. So, if this device is part of some critical infrastructure important to U.S. economy or security, then the possibilities for mischief is unlimited. Any virus can be uploaded or embedded into these devices to cause massive damage.

Geographical locations are susceptible to geopolitical uncertainty. Both Taiwan and South Korea exist in an extremely volatile neighbourhood with military and geopolitical tensions daily jeopardising critical supply chains. If there is no other option but to outsource production to other countries, then proper precautions must be taken. Security guarantees must be included in the clauses of any contract.

Source : South China Morning Post

THE CHINESE CHALLENGE

The issue at stake is much more than just the production of microchips.

AI will open an entirely new world of automations and is expected to revolutionise warfare in an unprecedented way. Taking out the human factor from decision-making increases military efficiency exponentially. Both the U.S. and China are neck to neck in the field of

AI, with some experts claiming that China has an edge. But without highly advanced microchips, China has scant chances of maintaining its lead.

The PLA has been focussing on three main areas “informatisation”, “intelligentization” and “mechanisation”. The first aspect focuses on information warfare, especially in the cyber arena, where high-quality microchips are required. The second part looks at the development of intelligent and automated weapons systems that can think independently with minimal human interference. And finally, mechanisation is trying to increase the use of technology in all aspects of warfare. If all these goals are achieved within the given time frame (2027), the Chinese military would be in a technologically equivalent position or maybe even better than the U.S. military.

All these three goals have implications for Chinese superiority in AI, quantum computing, hyper-sonics and microelectronics. Each of these areas will have addon effects on the efficiency and efficacy of weapons systems. AI-enabled weapons systems will be able to react much more quickly to any potential threats than comparable human-based systems. The number of human casualties in warfare will also reduce considerably due to increased mechanisation. As a result, the side having the technological advantage will be able to wage warfare in a much more sustained way for a longer period than its enemies. The nature of warfighting is predicted to be transformed.

The Japanese National Institute for Defence Studies has stated that “As AI does not get fatigued, does not forget, and has no emotional fluctuation, it is expected to be able to help commanders make decisions by processing large quantities of data quickly and accurately”.

In the words of U.S. Senator Mike Rounds, “defending against AI-capable adversaries operating at machine speeds without employing AI is an invitation to disaster”. Thus, all expert analysts agree that AI will determine the future technological balance of power between Beijing and Washington DC, and semiconductors will be the key to this.

The most advanced AI systems require semiconductor chips based on 7 nm to 5 nm design rules, which are currently not manufacturable in the United States. One advantage that America has over China is that it still has a robust intellectual property protection rights system compared to China. As a result, there is a more conducive atmosphere for technological innovations in America than in China.

TAIWAN-A TECHNOLOGICAL LYNCHPIN

Taiwan’s important position in the global chip supply chain has put it in the middle of the U.S.-China rivalry, an unenviable position by any count. Semiconductor fabrication at the most advanced level takes place in Taiwan, and they have the requisite facilities and expertise for this purpose. They have invested in the semiconductor sector and prioritised it for a long time and

Thus, for the U.S., Taiwan is a critically important country. Similar production facilities cannot be set up quickly in the United States because Taiwan is ahead by one or two generations. The fact that Taiwan is a stable democracy and a close friend does help matters here. America has very little worries that Taiwan will use these production facilities to arm-twist it in some ways.

But given the existential security challenges that Taiwan continues to face, the situation is not conducive to the United States in the long run. The Chinese are fully aware of the American dependence on Taiwan in the semiconductor sector. If the Chinese somehow get hold of the semiconductor fabrication facilities in Taiwan, it will be a huge disaster for the United States. China might even succeed in coercing Taiwan’s private and public sectors to support it in developing the latest semiconductor technology through economic pressure. Beijing has the demonstrated capability to do this. It has still not utilised this option, though. Any large-scale blockade of Taiwan by China could prevent the export of advanced semiconductors

CONCLUSION

Historically it has been proven that it is nearly impossible to restrict the flow of technological advances within a single geographical area through export restrictions and denying design details. The British tried desperately to keep their industrial revolution (especially about steam-powered textile manufacturing) under wraps but failed when its citizens carried the technology across the Atlantic to the American colonies, which rapidly overtook the British textile industry.

There are fears that just like the economic blockade of Imperial Japan in the 1930s gave impetus to the militarist elements to launch the attack on Pearl Harbour, the technological clampdown on China may trigger a similar response. It may force China’s hand in militarily occupying Taiwan to control its semiconductor industry, a nightmare scenario in itself.

A 2021 U.S. War College Paper titled “Broken Nest: Deterring China from Invading Taiwan,” expounds on a strategy that tries to convince China that an invasion of Taiwan would produce a major economic crisis on the mainland and not the anticipated technological boom by absorbing Taiwan’s robust tech industry. The Paper talks of elaborate plans for a targeted scorched-earth strategy that would render Taiwan unattractive if ever seized by force but positively costly to maintain. This could be done most effectively by threatening to destroy facilities belonging to the Taiwan Semiconductor Manufacturing Company, the most important chipmaker in the world and China’s most important supplier.

While such a self-destructive police may appear attractive to American military strategists, the fact is that the entire global manufacturing will have to pay the price for this short-sighted rivalry between the two superpowers.

GEOPOLITICS OF TECHNOLOGY

The transformation of Big Tech into a significant geopolitical player can no longer be ignored.

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The 1648 Treaty of Westphalia was an inflexion point in human history in that it ushered in the modern world order through the creation of the nation-state system. The new system defined sovereignty ‘within a political space by the institution of citizenship and created concepts of national interests, security and foreign policy.’

Globalisation is transforming this Westphalia paradigm by redefining the notion of state territoriality from a fixed restrictive geography to a transnational space. The global flow of capital, goods, services, technology, communications and even culture has steadily diminished sovereign control over space and time.

Electronic commerce and technological innovations are changing the permeability of national boundaries and leading to “the ascendance of the ‘stateless corporation’, the emergence of the trillion dollar ‘24-hour, integrated global financial marketplace, the sharpening of competition under capital mobility and the ‘law of one price’, the proliferation of foreign direct investment, the increase in intercontinental migration, and the emergence of a ‘global information society, “ as observed by Prof Ian Douglas of the University of Manchester.

The much-publicised attack on the U.S. Congress on January 6th is a recent example of how technology can be manipulated for online radicalisation, the spread of provocative and false narratives and the mustering of ranks for a misplaced cause. Nation states, even the most powerful ones, can ignore the power of Big Tech only at their peril.

Globalisation is transforming this Westphalia paradigm by redefining the notion of state territoriality from a fixed restrictive geography to a transnational space. The global flow of capital, goods, services, technology, communications and even culture has steadily diminished sovereign control over space and time.

THE EMERGENCE OF NON-STATE ENTITIES

It is, therefore, hardly surprising that Big Tech companies are increasingly be compared to nation states, and treated with an equal amount of diffidence. Market caps of giant corporations like Amazon, Alphabet and Microsoft dwarf the GDPs of many countries. As per World Bank’s 2019 figures, only seven countries had a GDP greater than Apples Market Cap ($2.08 trillion).

In the US, the tech stocks combined are greater than the entire EU. Tech giants not only dominate the stock markets, but have an overwhelming presence in e commerce, online communications, and are owners of vast amount of private data. They are increasingly functioning with national governments

(and their militaries) at the highest echelons; visit of Elon Musk to a national capital gets more coverage than even some better-known heads of states of medium sized countries.

Alexis Wichowski, associate professor in Columbia University’s School of International and Public Affairs describes in her book ‘The Information Trade: How Big Tech Conquers Countries” how some tech giants have extended their reach far beyond their core technological areas to assert themselves in spheres that were traditionally the domain of nation-states- defence, diplomacy, public infrastructure and services being offered to citizens. “You’re starting to see that people in government are recognising that technology is not just about the IT structure, and it’s not just about what citizens use – that Big Tech is also a global geopolitical force to be reckoned with,” says Alexis Wichowski.

BIG TECH AS INTERNATIONAL PLAYERS

No nation state, big or small, can afford to ignore the supranational presence of Big Tech in the global geopolitical scene. It is therefore, not surprising that there has been a rush to assign ‘tech diplomats’ to be located at Silicon Valley. The pioneering effort came from Denmark, always a technologically innovative nation, and followed by many other countries.

France has appointed an ‘ambassador for digital affairs’ while tiny by digitally proficient Estonia has an ambassador for cybersecurity. Netherland, another forward looking European

The fear (of data loss) can only be eliminated through diplomacy and a lot of work in convincing people that it is not so. And the way that rapid innovations are happening, there is no way we can control the pace,

Source : Cartoonstock nations has a counsellor for innovation, technology and science.

It would be an error to view these emerging foreign policy initiatives from the prism of traditional diplomacy. It is more of an acknowledgement of the influence they hold in the future of every nation’s well-being, and even in its demise if the corporates chose sides in any conflict or rivalry. Since such interactions between nations and the tech world are free from the forms and restrictions of formal diplomatic conventions, individual diplomats can choose their own innovative negotiation technique.

Diplomacy has always been about putting national representatives in potential areas of conflict, business interest, or where rapid transformational changes are taking place which will have disruptive influences on life and business. Under all these parameters, Silicon Valley fits the qualitative requirements for deserving diplomatic offerings from nation states.

An important asset under the control of Big Tech which nations have an eye on, or are worried about, is data. Today every bit of information is being stored in the Cloud which is not based within the national boundary of states and it is difficult to convince Big Tech to establish local centres. A big country like India may strike a hard bargain and ensure a large per cent of its data is on shored, but smaller countries just don’t have the bargaining power.

So, such countries must allay their fears

which will be like massive. The military is increasing the pace. In such a state, diplomacy becomes the only we can ensure that things do not go out of hand.”

AMBASSADOR ANNE MARIE ENGTOFT LARSEN Technology Ambassador of Denmark.

through dialogue and diplomacy with Big Tech. Says Anne Marie Engtoft Larsen, Denmark’s Tech Ambassador to Silicon Valley, “The fear can only be eliminated through diplomacy and a lot of work in convincing people that it is not so. And the way that rapid innovations are happening, there is no way we can control the pace, which will be like massive. The military is increasing the pace. In such a state, diplomacy becomes the only we can ensure that things do not go out of hand.”

In other words, tech diplomacy is about adjusting diplomacy to the needs of the 21st century, where the geopolitical role of technology is duly recognised. This new face of diplomacy then endeavours to create more prosperous, fair and meaningful lives for all sections of the society in collaboration with technology.

The dangerously escalation rivalry between China and the U.S. has its roots in the sphere of technological primacy. The country that secures a lead on emerging technologies like AI, 5G, VR, IOT etc, will reign supreme in the coming decades. The U.S. and its military allies have set up a partnership of AI in the military and the Biden Administration is working towards consolidating a coalition of emerging technologies as the principal agenda of the partnership. The EU commission is also working towards a global tech collaboration with its principal ally the U.S.

THE WAY AHEAD

The major powers are not only using diplomacy in its intercourse with Big Tech, but also looking at a framework that will rein in the unbridled influence that Big Tech has enjoyed for several years. As per Alexis Wichowski, this effort has been mainly through fines and regulations and restrictive policies. However, these have not always worked and there are currently “no vehicle for most governments to interact with Big Tech on a more positive or collaborative note.”

Not that Big Tech has not been trying to find loopholes in the evolving regulatory regime. The EU GDPR failed to control tech giants but impacted SMEs more, Amazon avoided the UK’s digital tax by passing the burden on its third-party sellers. In fact, it is universally accepted that Big Tax pays just a small fraction of tax it owes.

Tech Diplomacy strives to remove this lacuna as regulations alone cannot fix the conversation without interacting with the industry through multi-stakeholder collaboration.

Through their acumen in geopolitical manoeuvring, Tech Ambassadors with years of experience forging international deals and conventions, can act as the middle ground between nation states and the tech world. While the apprehension of tech companies against greater regulation is understandable, they too now realise that greater regulatory framework can no longer be avoided; hence it is in their interest to be a collaborative partner in its formulation.

A COUNTER VIEW

Critics of Tech Diplomacy are quick to point out that by engaging tech giants through formal diplomatic channels in one way of tacitly accepting a laissez-faire ideology, which can lead to even bigger monopolies. A clear example are the fascist regimes of 1930s which saw a fusion of state and industrial house, on the pretext of combating communism.

Today, the concentration of economic power in the tech companies carries its own dangers; the intermeshing of these big corporations and the government can be dangerous for democracies. Amazon, Google and many other companies are known to be closely working with the government and the military to supply solutions to digital problems as also to provide infrastructural support. Social media companies rarely turn down requests from law enforcement agencies of the state for information stored in their data base, thus turning into state organs.

Assessment

The manner in which technology is being nationalised, and worse weaponised, presents the single biggest challenge to peaceful coexistence for mankind. The new blueprint for global power is no longer being defined by geography or control over landmass, oceans or the airspace, but by control over flow of ideas and innovation by exploiting the connections that technology generates.

As our world dives deeper into the fourth industrial revolution, the relationship between technology and geopolitics is still emerging. AI, quantum computing and blockchain are some facets of cutting-edge tech that are revealing themselves as the frontline of global rivalry. Hence, the need to accelerate the process of formulating global norms and protocols the mitigate the risk that these technologies impinge on geopolitics.

While technology has immense destructive power, all technology is not the principal ingredient of global rivalry. Take green technology for example; if properly harnessed through a global collaborative effort that rises above narrow national and commercial interests, it can serve as fabric for strengthening international cooperation even between rivals. This further strengthens the argument why technology must go hand in hand with diplomacy.

RESHAPING THE CYBER FUTURE

The mad advance of technology is creating asymmetries that will reshape global power dynamics.

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While mankind struggled with the pandemic and its resultant economic fallout and senseless war in Eastern Europe drain precious treasures and lives, technology continues to march relentlessly. While there is much good that technology has to offer humanity, it also possesses the power to cause disruptions for which we are ill-prepared.

Technology poses ever-increasing challenges, whether it is code-breaking, super-fast quantum computing or growing expertise in breaching firewalls to invade the cyber world undetected and unmolested.

The internet has become the lifeblood of modern civilisation, connecting the commercial, social, security and geopolitical domains as never before. So much information surges through the net that it appears likely that human control over its security has gradually slipped away. However, many states spend to secure their critical infrastructures (CI), and it is well-nigh an impossibility to totally secure the cyber world.

In today’s technological age, cyberspace has emerged as another battlefield of boundless threats. Conventional military, economic, or political methods are no longer the primary mechanisms for battle. Cyber warfare is the new terminology used to describe the actions of a hostile state hacking or disabling another state’s critical infrastructure systems. This has military implications, too, as the enemy can tap into an intelligence database to take and gain valuable information.

There is a larger ethical issue as well, which concerns practitioners. “These technologies are appearing at a rapid rate, and they’re converging. We have [a] serious ethical-legal gap – what’s sometimes called the pacing problem – between our ability to put in place policies to attend to the negative consequences,” says Wendell Wallach of Yale University’s Interdisciplinary Centre for Bioethics. “Many times, the technologies are so embedded in our society, by the time we recognise what can go wrong … we don’t have effective ways of addressing it.”

In response, some researchers are already working on a new area of research called post-quantum cryptography, which is dedicated to developing new approaches to encryption that could remain secure in the quantum computing age.

CHALLENGING TIMES AHEAD!

With both public and private entities investing billions into R&D, the speed of technological evolution outpaces our ability to grasp the changes brought forth; an early advantage in cutting-edge technologies could well prove to be the differentiator. Quantum computing makes it possible to establish a sort of ‘superparallel processing’ based on

quantum physics that can rapidly solve problems beyond the scope of what a classical computer can achieve.

Quantum computing fundamentally differs from the computing devices we are familiar with today. Quantum machines operate on particle physics principles and can solve complex statistical problems involving multiple variables. In the future, quantum computing may add significant value to medical research, weather forecasting, cyber security and even military affairs.

By the same thread, it also creates a significant threat to cyber security, potentially requiring a change in how we encrypt our data. Currently, public key encryption is by far the most common form of internet encryption used today. All the sensitive communications and data shared over the internet are based on this. The supporting public key infrastructure (PKI) is part of every web browser to secure traffic across the internet. Many organisations also use this PKI to secure their internal communications, data, and access to connected devices.

Quantum computers are in a position to break this PKI effortlessly with their superior computational power. This has immediate repercussions for security at an international level whereby an adversarial nation-state or cybercriminal gang with access to quantum computing capabilities could access any and all communications and data encrypted using PKI. National security and critical infrastructure are all at threat in this advanced tech world. “If we see … major advances in quantum computing, very quickly, then all of our attempts to encrypt our data may actually collapse,” says Wendell Wallach.

Warfare is also bound to be impacted by this growing science of quantum computers. Quantum sensing has direct applications in military applications through a variety of technologies. Quantum radar can detect targets that conventional radar cannot detect, and quantum navigation uses quantum properties to create a precise positioning system that may eventually replace GPS.

MEETING THE THREAT

In response, some researchers are already working on a new area of research called post-quantum cryptography, which is dedicated to developing new approaches to encryption that could remain secure in the quantum computing age. Quantum-safe solutions have already been deployed, such as Quantum Key Distribution (QKD) and Quantum Random Number Generator (QRNG) and have been proven to be potentially ready for large-scale deployment. Their use depends on standards to support trust and interoperability across large-scale networks such as 5G and IoT.

The International Telecommunication Union (ITU), an agency of the United Nations (UN), is attempting to pool together a group of quantum specialists collaborating to develop standards on the security aspects of quantum technologies.

From a cybersecurity perspective, while quantum computing is a significant threat, it also offers the possibility to of enabling a substantially enhanced level of communication, security and privacy. Quantum machine learning can generate provably random number sequences and identify unseen patterns, which can help with data integrity verification and content authentication.

Artificial Intelligence (AI) adds another element to the mix of cloud computing. Cloud computing can work along with AI to ensure better safety in cyberspace.

Quantum computing enables quantum key distribution (QKD) by sharing cryptographic codes between users, ensuring complete safety, and flagging unwanted intrusions. AI can be leveraged to monitor network security and data centres, alert them to discrepancies, and act on vulnerabilities by understanding their roots. AI can act as a catalyst for ensuring better security with disruptors for quantum computing so that it doesn’t become a cybersecurity threat.

GEOPOLITICAL SHENANIGANS NO MORE!

This new phenomenon has challenged diplomacy because these new technologies are rapidly evolving as we speak asymmetrically. Technology has become a moving target and has global repercussions.

The current diplomatic framework must be overturned to establish collaboration as the cornerstone. This is the complete reversal of how it stands today, wherein nation-states operate by looking to eke out as much as possible for themselves while giving away very little in return. A spirit of international solidarity needs to be built to develop maximal solutions to combat global issues like cyber security.

We have already witnessed the negative impacts of isolationism in cases such as the recent Covid crisis through vaccine nationalism. We need a spirit of cooperation and togetherness to combat crises like these and climate change. A massive re-think will be required for such critical issues based on cooperation and solidarity.

We are now facing a moment of reckoning. Significant technology leadership is moving East, The concern is that China’s size and technologiA shift in power play is possible in this new cyber-dominated world wherein emerging economies and neutral players like the Middle East could play a major role. Power and its dynamics are changing regarding the significance of military assets, emphasis on economic capabilities and technological supremacy. Non-state actors have emerged as very powerful. Technology has diffused the power status quo, thereby necessitating a collaborative effort. The conventional competitive frameworks don’t work anymore.

This warrants that the understanding of science and technology can no longer remain limited to scientists and academia. Leaders and decision-makers must be better educated to make informed decisions on technology-related issues. R&D is no longer a realm of scientists alone, and policymakers need to be educated and kept abreast of the sweeping changes impacting security.

Assessment

As cyber technology evolves from enabling to potentially dangerous, security has emerged as a key concern among nation-states. With all its possibilities, cloud computing has the power to threaten national security and critical infrastructure. As a result, quantum-safe solutions have already become the focus of R&D.

While the widespread use of large-scale fault-tolerant quantum computers is potentially a decade off, near-term quantum computers could still yield tremendous benefits. There are still substantial investments required to solve the core problems around scaling qubit count, error correction and algorithms in quantum computing.

There are strong diplomatic implications, and cyberspace has emerged as a key battlefield among the superpowers. This shift in power play in the new cyber-dominated world has led to the emergence of new nonstate players, and technology has become the key differentiator.

cal weight means that it has the potential to control the global operating system.”

JEREMY FLEMING Director GCHQ , UK