The Rise of Technocolonialism

 

 

 

"In 1853, on the orders of President Millard Fillmore, US Navy Commodore Matthew Perry sailed four warships to persuade Japan to end its 200-year isolation policy. Arriving in what is now Tokyo Bay, Mr. Perry presented the Tokugawa Shogunate with an ultimatum: start trading with the US or you will face the consequences.

 

 

 

The arrival of these "black ships" (so named because of the dark smoke billowing from their coal-fired steam engines) was of great importance. Faced with such an impressive display of technological prowess and industrial power, the Shogunate reluctantly agreed to Mr. Perry's demands and in 1854 the Treaty of Kanagawa was signed.

 

 

 

While technology can be a threat, it is also critical to all critical infrastructure like schools and hospitals. Over the past century, the independent individual has become highly connected to a range of technologies, including interconnected systems such as energy grids, the Internet, mobile phones, and now artificial intelligence (AI) chatbots.

 

 

 

As Mr. Perry's expedition showed, technology also underpins a nation's military sovereignty. The technologically dominant United States has become the world's leading military power, with more than 750 bases in 80 countries, three times the number of bases in all other countries combined.

 

 

 

However, this image of state sovereignty is rapidly changing. Although the US's financial independence remains intact, the country's economic sovereignty is increasingly challenged by a rising China. According to purchasing power parity, China overtook the United States in 2014. became the world's largest economy. Its production volume reaches approximately the combined production of the United States and the European Union.

 

 

 

Both these superpowers are currently competing to control the design, development and production of key technologies such as semiconductors, AI, synthetic biology, quantum computing and blockchain. In 2023 China leads the US in more than 80% of these areas. As the technology competition between the US and China grows, countries around the world will be forced to choose sides and adopt different technologies, standards, values,  ​​and supply chains from their chosen allies. In this way, we can enter a new era of technological colonialism, which can undermine the stability of the world.

 

 

 

Interestingly, neither the US nor China has been able to become a dominant country in the semiconductor industry, as the Taiwan Semiconductor Manufacturing Company and Samsung of South Korea are the only manufacturers capable of producing semiconductors smaller than five nanometers.

 

 

 

Unlike the old colonialism, technocolonialism is not the seizure of territory, but the control of the technologies that underpin the global economy and our daily lives. To this end, the US and China are increasingly reclaiming the most innovative and sophisticated segments of global supply chains that have been outsourced to other countries, creating strategic hubs.

 

 

 

Europe also wants to establish itself in this rapidly developing sector. The EU has not only welcomed the Dutch company ASML, which produces the extreme ultraviolet lithography systems necessary for the production of advanced chips, but is also seeking to attract talent working in AI research. It also hosts more science, technology, engineering and math students and computer scientists and creates more startups than the US.

 

 

 

When offshoring activities cannot be recovered, cycles of technological sovereignty act as another, more subtle form of coercion. They create deep-rooted asymmetric dependencies that effectively push countries into techno-economic slavery.

 

 

 

A good example is the United Kingdom. In 2020 The US has forced the UK to remove Chinese technology company Huawei from its 5G network by threatening to cut off access to US intelligence and chip design software. Similarly, the Netherlands was pressured to stop supplying China with ASML equipment in early January. 

 

 

In response, China has tightened supplies of critical materials by restricting exports of gallium and germanium, key raw materials for microchips and solar cells.

 

 

 

Soon, all countries may face their own "black ship". Those without critical technology protections risk becoming technological colonies catering to the needs of their technological masters, producing simple electronics, processing rare metals, labeling datasets, or providing cloud services, from physical mining to data mining. Countries that do not adhere to either the US or China will become technological poor and backwaters.

 

 

 

As geopolitical tensions rise, emerging technologies such as quantum computing, AI, blockchain, and synthetic biology promise to push the boundaries of human discovery. Now the most important question is whether these technological innovations will be controlled by a select few and whether they will become instruments of enslavement or perhaps be democratized to promote the common good. Rather than ushering in an era of destructive techno-colonialism, new technologies could help revitalize our rules-based international order and improve collective governance.

 

 

 

Technocolonialism is the latest form of the eternal struggle for global dominance. Will we become the architects of our own doom, or will we fight for a brighter future? Either way, the answer is in our hands.

 

 

 

The author of the commentary is Hermann Hauser, one of the founders of Amadeus Capital Partners, a member of the European Innovation Council."