Thursday, January 28, 2021

The fragmentation of everything | MIT Technology Review

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The rise of technonationalism. Divergent regulatory regimes. The dissemination of “enclosed gardens”. A polarization like we have never seen before. The confluence of several trends is on the way to completely fragmenting our real and digital worlds. For businesses, this raises a host of new risks, from cybersecurity threats to reputational risk – which, in turn, will require new responses and approaches.

The technical-economic cold war

A “technological cold war” is already underway – a permanent state of conflict, often invisible, at the intersection of technology and geopolitics.

The competition to dominate the next generation of technological infrastructure – such as electric vehicles, 5G networks and quantum computing – is growing increasingly fierce. It’s a high-stakes competition, and countries that set the rules for these technologies could gain a significant economic advantage, just as the United States for decades profited from the pioneer of the personal computer and the Internet.

At the same time, populist and nationalist leaders have gained momentum in much of the world. These leaders have protectionist and interventionist instincts and a willingness to bypass established norms. It’s a combination that has resulted in the deployment of unconventional tools to favor domestic businesses – not just tariffs and trade wars, but also business bans and new forms of cyberattacks such as armed disinformation.

All of this leads to the partition of the real world (e.g. trade, labor mobility and investment) and the digital world (e.g. technology platforms and standards). In this fragmented future, companies once accustomed to operating on the global stage will find themselves rather limited to operating within the spheres of influence of their home countries. (For more, see “Techonomic Cold War” in EY’s Megatrends 2020 report and MIT Technology Review “Technonationalism“problem).

Regulators aren’t the only ones fragmenting the digital world. To a large extent, tech companies do it themselves.

Divergent social contracts

Technology platforms are the basic infrastructure of today, increasingly inseparable from the economies and societies in which they exist. These platforms increasingly allow citizens to be informed, to engage in a political debate, to network professionally, etc.

But while tech companies may seek to create transparent and integrated global platforms, they actually offer their offerings in very different companies. The social contract of the United States is fundamentally different from that of China, Saudi Arabia or even the European Union (EU). Thus, governments and regulators of different markets have undertaken to overhaul technological platforms in the image of their social contracts. One of the first examples was China, which developed its own platforms that align better with its social contract than offers developed in the United States.

Meanwhile, the EU has become more and more active and visible in the regulation of technology. The most prominent recent example, the General Data Protection Regulation (GDPR), is a precursor of things to come. GDPR deals with privacy and data protection, but much bigger regulatory issues loom, from the explainability of algorithms to the security of autonomous vehicles (for more, see the Bridging AI Gaps report). Trust of EY). As these technologies age and become more important in the lives of citizens, expect governments in different regions to become more active in their regulation. Over time, increasingly complex regulatory issues and divergent ideologies will either create separate platforms or platforms that seemingly have the same name but offer fundamentally different user experiences in different geographies.

Enclosed gardens

Regulators aren’t the only ones fragmenting the digital world. To a large extent, tech companies do it themselves. Walled gardens – closed, self-contained technology platforms or ecosystems – have endured because they are good for the bottom line. They allow businesses to extract more value from customers and their data while providing a more organized user experience. In recent months, there has been an increasing fragmentation of “over-the-top” media streaming services, with individual studios and networks developing their own subscriber platforms. Instead of streaming platforms that hosted content from a wide variety of creators, the platforms will offer exclusive access to their own content, thereby fragmenting the streaming media experience.

Hyperpolarization

It’s no secret that political polarization has increased at an alarming rate and that social media platforms – without being the only ones responsible – have fueled the trend. Filter bubbles on social media platforms have allowed the spread of disinformation, leaving platforms with the delicate and unenviable task of controlling the truth.

As worrying as it sounds, everything we’ve seen so far may be nothing compared to what lies ahead. As social media platforms become more active in stemming the flow of disinformation, its providers are beginning to seek new homes that are safe from the police. In the weeks following the recent US presidential election, a growing number of Trump voters began to leave major social media platforms for alternatives like Speak and Telegram. As the next presidential election rolls around, it’s no exaggeration to predict that we might see today’s social media filter bubbles replaced with entirely separate social media platforms aimed at conservatives and politicians. liberals.

At this point, we will have moved from an era of polarization to an era of hyperpolarization. For anyone worried that social media platforms are doing too little to tackle disinformation, imagine how much worse things will be with platforms that don’t even try.

Risks and challenges

The technical-economic cold war requires a new approach to cybersecurity. “Organizations need to guard against not only malware and phishing attacks, but also armed disinformation,” said Kris Lovejoy, global leader in cybersecurity consulting at EY. “We have seen disinformation used to attack elections, but there is no reason that it cannot be used to target businesses. Today, most businesses lack the guarantees and protections they will need in the next frontier of cybersecurity. “

A second challenge is the lack of transparency. Trade thrives on transparency, but instruments such as company bans are opaque and seemingly arbitrary. To the extent that these instruments undermine transparency, they create uncertainty for businesses.

Regional fragmentation of platforms by regulation and divergent social contracts increases the complexity of regulatory compliance and the risk of regulatory non-compliance. Beyond simple compliance, businesses face significant brand and reputation risk if consumers perceive platforms to be misaligned with societal values.

A hyperpolarized future will create some of the biggest challenges of all. Losing the last tenuous bridges between our divergent echo chambers would threaten everything from social stability to the future of democracy and the very existence of a shared reality.

This content was produced by EY. It was not written by the editorial staff of MIT Technology Review.

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