The Geopolitics of Data

Henley & Partners
Dec 5, 2019 · 10 min read
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Abishur Prakash, Geopolitical Futurist, Center for Innovating the
Future, Canada; Author, Next Geopolitics: Volume One and Two and
Go.AI (Geopolitics of Artificial Intelligence)

What would you do if you wanted to travel to Germany but couldn’t buy an airline ticket because you had a low social score? If you haven’t heard of the term “social score” perhaps you should travel to China. In 2018, more than 9 million Chinese individuals were blocked from booking flights because their social scores were too low. Their scores were derived from their online activity, spending habits, and political party loyalty. While this may sound peculiar to some, what is happening in China reflects just one way in which data is now being tapped.

Could Data Prompt Clashes between Japan and Thailand?
Over 700 million people around the world use Line, a Japanese messaging app. In 2019, Line launched a new feature called Line Score, which uses algorithms to give users a score calculated based on the data a user produces (their activity across the different Line services). Depending on their score, a user will be able to access various Line services. For example, Line Pocket Money, which offers app users loans, is in the process of determining how much credit a user can get based on their Line Score. By giving users a score, Line is changing the role of business in the lives of individuals; the firm is transitioning from a private company to a digital government that punishes and rewards people based on their activity data.

How might this affect geopolitics in Asia? In the coming years, Line might look to explore the Thai market, subsequently finding itself in a position of being able to ‘shape’ the lives of locals. To illustrate, if an individual needs a job, a loan, investment options, or insurance they may very well consider Line products. In turn, the app could use Line Score to determine what Thai clients can access, posturing Line inadvertently to govern the lives of people in Thailand thanks to access to vast amounts of data and complex algorithms. Would the Royal Thai Government be comfortable with this, or might it view Line processes and strategy as being a new kind of colonization via data?

In case of the latter, the Royal Thai Government might decide to cut off the supply of data to Line in an effort to sap the app’s potential stronghold, meaning Line would no longer have access to data from Thai banks and/or retailers. This would likely create chaos for Line’s business lines and may force Japan to intervene to protect its technology company. Consider what is happening here: Line’s new business model is essentially a social design that has the very real potential to take away power from the Royal Thai Government and spark tensions between the governments of Thailand and Japan. For the first time, a private company may cause two governments to clash because of data. As for Japan, how might she respond? Perhaps Japan could threaten to shut off all Japanese robots operating in Thailand, bringing the Thai manufacturing sector to a halt, or Japan could direct all of its artificial intelligence (AI) firms to stop hiring Thai engineers and programmers.

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Heads of state of ASEAN nations gathered at the 33rd ASEAN–Republic of Korea Summit held in Singapore in 2018

There is also the role that the Association of Southeast Asian Nations (ASEAN), of which Thailand is a member state, could play, possibly involving the entire region in the inter-state conflict. If ASEAN feels that one of its members is being influenced by the Japanese algorithms, it could threaten trade or diplomatic action against Japan. ASEAN may do this not just to support Thailand but to also send a message to the world that creating problems with ASEAN members may prompt the intervention of the intergovernmental organization.

It is also worth considering the broader ecosystem that may be reliant on Line Score. For example, banks in the Middle East may be providing local clients financing for loans through Line. Or, insurance firms in the USA may be providing health and auto protection through Line. If Line Score is affected in Thailand, the entire ecosystem may be adversely affected. Could this spur other governments to step in? Could Line or Thailand have imagined that a regional issue over data could become so global?

Could Public Policy around Data Fuel New USA Power?
As world powers compete over technologies like AI, data is becoming one of the keys to gaining an advantage. Without data, companies — and countries for that matter — can’t fuel their AI systems. With data, however, AI can advance to new levels, meaning that public policy around data is becoming a new geopolitical flashpoint.

Take the USA and India. In 2018, India proposed a new set of laws that would compel technology companies collecting data in the country to store that data therein (data localization). As technology companies held their breath, the USA government intervened. In 2019, the USA warned India that if data localization laws came into effect, the USA could reduce the number of H-1B visas it grants to people from India. For the first time in history, the data laws of one country are affecting the immigration policy of another country, and caught in the middle are technology companies ‘merely’ wanting to expand their commercial footprint through India’s market. Significantly, the data laws that India is considering today may be nothing compared to what is to come. Niti Aayog, India’s government think tank, has proposed creating an open marketplace where companies share their data. Companies of all sizes, foreign and domestic, would be required to share their data so everyone can benefit, including competitors — meaning USA firms could lose their competitive edge in India.

How might the USA respond to this move? While the country would have to weigh the importance of data with other parts of its relationship with India, such as weapons sales, it may be spurred to take a particular course of action in light of how other countries react to India’s data laws, such as China for example. Weeks before the USA threatened using H-1B visas, the government of China announced that it would comply with India’s data localization ruling.

Instantly, multiple geopolitical shifts are taking place. Firstly, India’s laws are pressuring USA–India ties. Secondly, the laws appear to be bringing India and China closer. These two shifts — pressure on USA–India ties and closer India–China ties — may impact on a third set of relations: USA–China ties. If USA businesses lose access to foreign markets because of public policy while Chinese companies succeed, it could anger the USA government. In turn, the USA may double down on current sources of tension, such as trade, intellectual property, or currency devaluation as a way to strike back at China. In other words, how China and the USA comply with public policy in India could begin to impact on the geopolitics between Beijing and Washington. Thirdly, private companies from the USA and China are being restricted by how their respective governments are reacting to India’s data laws. Will they listen? The USA government may be able to control companies from traditional sectors, such as defense or investment banking, but technology companies, many of whom have government-like power, may ignore or reject the USA rulings or desires. What this means is that for the first time, because of technology, companies could have a different foreign policy than the country they originate from.

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If the USA feels outplayed in India and other markets because of data laws, it might take a different route to enforce its will. Could it introduce the world’s first Data Trade Organization (DTO), tasked with prescribing global rules for data? By forming the first DTO, the USA may be in charge of creating the rules, laws, and protocols that govern data use from San Francisco to Shanghai to Sydney. Just like the World Trade Organization, which gave the USA power over trade, so too could the DTO give the USA significant power over data. What this means is that while India may control where companies store data (i.e. in India), the USA may control how that data can be used. What’s more important — where data is stored or how data is used?

This would be a new strategy through which to reconfigure USA geopolitical power through data. For the first time, nations may ‘feel’ the presence of the USA not through warships or corporations but by complying with data rules set in Washington. Of course, this assumes India and other countries join the USA’s DTO. If not, could they create their own data bloc?

Will Data Begin to Control People?
Until recently, companies and countries collected data for a handful of reasons: some brands collect data to boost sales through hyper-personalized ads, while some governments collect data to identify national security challenges such as terrorism. These uses come with major privacy implications but, for the most part, the way data is collected and used today does not limit what someone can or cannot do. Soon things may be different however.

For example, the UK is experimenting with citizen scores. More than 50 councils throughout the UK have spent a combined GBP 2 million to buy AI that crunches data, divides people into different groups, and allocates them a score. Then, the software makes predictions about ‘future outcomes’. For example, the AI analyzes variables like martial status, socio-economic status, family members, and financial information to divide households into different categories. Then, the AI uses this analysis to predict possibilities such as whether one area will be at higher risk of alcohol addiction. Governments then use these predictions to formulate policy.

This represents a new kind of society that is emerging. For the first time, the data that someone produces — from commenting online to paying bills late — could end up controlling them in ways previously unimagined. The New Zealand government is experimenting with algorithms that look at data and predict whether a new immigrant is likely to commit crime. Based on these predictions, the immigration agency can then decide whether to arrest an immigrant, extend their visa, or even deport them. The ethical implications of this are enormous. Governments are starting to view people through the predictions and assessments that algorithms produce. The human element is disappearing.

This may end up creating a new geopolitical challenge for Wellington. The next generation of immigrants may decide not to move to New Zealand because of the algorithms. And, if these algorithms are biased, it might deter immigrants even more. If fewer people immigrate to New Zealand, new opportunities may unveil for other nations. For example, as people ignore New Zealand, the UAE might reach out to countries and begin to market the UAE as a data-neutral zone. What this means is that the data people produce in the UAE may not be used against them, unlike in New Zealand.

Things become more confusing when considering the ‘other’ kinds of data that are being collected and used. In the USA, a firm called Genomic Prediction is applying machine learning algorithms to huge sets of genomic data. Based on this analysis, the firm hopes to predict the cognitive abilities of embryos. In other words, the firm wants to determine how smart a child will be before the child is born. If such technology is adopted, it will fundamentally change the world. For example, in order to grow its economy, Brazil could implement predicting the intelligence of future generations and assign people jobs before they are born. This means that private companies may be working with governments to decide where people can work before those people have even arrived.

Governments may create economic plans 10 or 20 years in advance based on the predicted intelligence of future populations. This extreme use of data carries enormous ethical and moral consequences. It means that for the first time the world will be judging how valuable somebody is before they even see first light. Are people ready for this?

Why is data now so powerful when until recently it was essentially just a mirror for society? As people produced data, they were also producing a digital picture of themselves. Through this picture, somebody could understand how a person thought, felt, and ultimately, who that person was. This is what has made social media so valuable and is what has made surveillance so scary. Data is now no longer just about people: it is also about geopolitics. Thanks to data, new social designs are emerging, transforming countries from Europe to Asia. At the same time, how governments regulate and control data within their borders is affecting global relationships. All of this means that local and global are being connected in ways that have not existed before.

A photo that someone posts in Taipei, a message that somebody sends in Munich, a video that somebody uploads in Dubai are no longer disconnected from each other. They all are connected and carry major geopolitical consequences. The geopolitics of data then, is not actually about data at all. Rather, it is about people and the choices they are making every single day — all of which is being tracked, collected, and analyzed through complex algorithms. For the first time, people are part of geopolitics in a way they have never been, and that means the next time you see someone taking out their phone, buying a cup of coffee, or making a purchase at a retail store, remember that what they are doing is producing data that may play a small part in shifting global power and changing societies in all four corners of the world.

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USA tech firms including the likes of Amazon, Google, and Microsoft are among the leading employers of H-1B applicants. Seen here are Amazon employees at the firm’s largest campus building in Hyderabad

Henley & Partners

The Global Leader in Residence and Citizenship Planning

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