Technology race a potential threat to global stability

Meredith Booth



The world is on “thin ice” in 2018 with the risk of a “global tech cold war” just one of the pressure points, global political analyst Willis Sparks warns.

Investors should “expect the unexpected” in a world constantly changing and posing risks he says.

The US-based global macro director of Eurasia Group, the world’s largest political risk consultancy, says investors should take the view that unexpected events are always in play at the crossroads between politics and business.

“If you think back to 10 years ago…who would have predicted the worst financial crisis in 80 years, global recession, sovereign debt,” Sparks says. We’ve had unrest with the Arab Spring, Brexit and now Trump.”

He describes the world as being on “thin ice in 2018” with many of the potential threats to global stability related to cyberspace and the shifting balances of power.

“Cyberspace is ripe for all kinds of different surprises,” he says. “I do think that we’re on thin ice in 2018, with so many areas in which we could have a crisis that the world is not equipped to handle.”

Last month, Eurasia Group released a list of what it sees as the top 10 geopolitical risks for 2018.

Third on that list – behind a major upset in China or a significant “geopolitical accident” such as the 9/11 attacks – Eurasia Group cited the risk of a “global tech cold war”.

This is seen as an emerging risk as economic powerhouses, such as the United States and China, compete to develop new information technologies and master artificial intelligence and supercomputing. The race is on for dominance in export markets like Africa, India, Brazil and Europe.

Eurasia Group’s research notes that governments will have to decide whom to trust and whose products and standards to embrace.

Sparks says automation and artificial intelligence, while not an immediate threat, are a longer-term problem, citing World Trade Organization forecasts indicating these technologies put 47 per cent of current US jobs at risk, and are looming even larger in India and China, where the WTO says 69 and 77 per cent of jobs, respectively, are at risk.

“We’re watching these countries and the ways in which governments prepare for the day when it’s even harder to create jobs,” Sparks says. “The key is to determine which countries will be stable five years from now. It’s a much bigger challenge for India because two-thirds of their population is under 35, compared with China’s ageing population.”

Sparks spoke to Investment Magazine ahead of addressing the upcoming Australian Institute of Superannuation Trustees Conference of Major Superannuation Funds (CMSF) 2018, to be held in Brisbane on March 14-16. For more information or to register, visit the event website