Fault lines in the technology sector have sparked tensions and polarisation among firms, governments, and organisations. As the Metaverse race becomes a key focal point of the global extended reality (XR) community, firms will need to consider how it will develop amid these renewed tensions.
In this featured interview, XR Today spoke with Abishur Prakash, Co-Founder and Futurist for the Center for Innovating the Future (CIF), an advisory firm based in Toronto, Canada.
He is a world-renowned speaker and author of several books outlining the geopolitics of technology, including Next Geopolitics: Volumes One and Two, Geopolitics of Artificial Intelligence (Go.AI), The Age of Killer Robots, and his latest work, The World Is Vertical: How Technology is Remaking Globalization.
XR Today: Which concerns have executives voiced over the geopolitical challenges of technology?
Abishur Pakash: From personal experience, I’ve spent a lot of time convincing executives to consider these things because geopolitics of technology previously wasn’t a pressing issue, but now it’s the opposite.
Now, many executives come to me because they’re [facing challenges] every day, and it’s really affecting their operations, their structure, and their corporate strategies, which are created not on a quarterly basis, but for three to ten-year plans.
Currently, the entire world is transforming because of geopolitics and technology. [Executives] need to know what’s next to provide assistance and support in dealing with these new challenges.
XR Today: In your book, you discuss key examples of a vertical world. Can you explain that in further detail how this applies to the tech industry in general?
Abishur Prakash: To define the vertical world, if you think back since the end of World War Two—the past 80 years now—the world has moved in a certain direction. It has the specific design of bringing countries together, getting rid of the global economic and social barriers that once existed.
It’s also about integrating economies, and if you think about countries as strings, they have been woven together over decades, and everybody is plugged into the same systems and institutions.
For example, if you take the United Nations, everybody is a part of the UN. If you think about how countries connect their financial systems to one another, every country joins SWIFT. This is what is meant by globalisation, and on the back of this, large multinationals have flourished [through] their ability to access labour markets and consumers, as well as to build these complex supply chains.
What I’m seeing now, however, is that as all of this has taken place over the past 70 odd years, many countries have also become quite angry and felt there has been a negative to this form of globalisation based on three issues: feeling they’re losing sovereignty, that they’ve become unable to compete economically, and that their identity and culture have started to erode.
Despite feeling that way, until recently, there was nothing you could do. If you did not like the current form of globalisation, then you would have been isolated and alone in the world, but with technology, countries are now almost fighting back and establishing their own vertical borders.
Instead of the world being open and accessible, as it has been for decades, now it’s becoming full of these technology-based walls and barriers. So the world is vertical, and this is a new design of globalisation.
Rather than stating countries are walking away from globalisation, or that there’s de-globalisation taking place, what I am saying is that a new form of globalisation is now emerging: vertical globalisation.
The technology sector will most likely be affected because it has operated a certain way for decades. Many ‘big tech’ firms have been able to transcend borders, and for decades, they’ve gone from Boston to Budapest to anywhere, to take their products and services into a market.
If you take Uber, for example, it would open offices wherever it wanted to take its services directly to people, which angered a lot of governments. Now, in this vertical world, two challenges are emerging.
Russia demanded that 13 foreign tech companies –including Google, Facebook, Twitter, and TikTok – set up offices in Russia by the end of the year or face potential restrictions and bans. https://t.co/X78DrjKVKB
— Cristina Maza (@CrisLeeMaza) November 24, 2021
The first is that countries are now forcing large tech companies to rethink everything. For example, Russia informed roughly 22 large technology companies they must create local Russian firms that hire local Russian people and comply with the Russian laws.
So you can see that the ability of these technology companies to transcend borders is ending, but at the same time, there’s a paradox, which I talked about in the book.
Also, they’re creating their own borders and territories and looking at all of the undersea cables being built to connect Asia and Africa with the West, it’s all built by tech firms like Facebook and Google.
This is this paradox that’s taking place, and one of the big challenges is that, because the world is now dividing and splitting, the fates of technology companies are also undecided.
One of the big drivers of this vertical world is US-China competition, and you can see how it’s affecting technology companies because China doesn’t want its technology stars to depend on American finance.
What has happened with Didi? We’re seeing now China is trying to get its technology companies to stop depending on US stock markets and instead, list in Hong Kong or mainland China.
These fault lines are now emerging, the world is fragmenting, and now you’re seeing with SenseTime wanting to list in Hong Kong, the US has threatened sanctions, completely hijacking the IPO.
Technology firms will be and are already being affected due to the geography of their industry, how consumers have operated, and the global economy is essentially being redesigned from the ground up.
XR Today: Several key advocates called on the sector to build decentralised, open-source Metaverses. Why should the industry do so and what are some likely scenarios?
Abishur Prakash: UNESCO recently revealed it had signed an agreement with 193 members to cooperate on AI ethics. Looking closely at it, it’s not an agreement, but more of a pledge to work together in certain areas.
In reality, there are really no global AI ethics, meaning we’re exiting the era of single rules for everybody, and we’re entering an era where there’s no incentive for governments, countries, and even companies of specific origins, to cooperate with one another.
Technology is allowing everybody to have greater independence and autonomy, and the West is expressing right now it only wants to work with like-minded nations. It’s a sign that strategic thinking is changing, and it’s not that we want to work with everybody, but we only with like-minded nations.
If that becomes the new status quo—the world splitting into camps of countries and ‘tribes’—then there cannot be any international standards for the Metaverse, and anybody that tries to devise them will have a tough time winning over countries like China, India, [or any] countries outside of the Western world.
Even more, we saw in September a massive defence alliance between the US, UK, and Australia (AUKUS) that has completely split the Western world, and is centred on technologies like AI, quantum computing, and cybersecurity.
We saw how France reacted and that the Germans didn’t even know about this. The Canadians were not even invited, so if these technological divisions can happen in the West, they can happen anywhere else.
I think what we’re going to see emerge with the Metaverse, as far as standards go, is you’ll have regional rules with governments either supporting their companies or other governments themselves, by trying to take them globally as every country and every region gains its own sphere of influence.
For example, Saudi Arabia has announced that starting in January 2024, any company in the world that wants to do business with the Saudi government, including state-backed companies, must base their regional HQ In Saudi Arabia.
#FII5: 44 multinational companies have announced moving their regional HQs to #Riyadh, Hosam Alqurashi of the Royal Commission for Riyadh City says@RiyadhDevelop @FIIKSA #ImpactOnHumanity https://t.co/XNaptWaQll pic.twitter.com/9CIeTEuyVB
— Arab News (@arabnews) October 27, 2021
Saudi Arabia is a rising power, and it’s now saying it will not do things as they’ve been done in the past, where it worked with other Arab nations. If you’re a foreign business wanting to do business in Saudi Arabia, you have to base your entire regional headquarters in Riyadh.
If that’s the start of the vertical world, then technologies like the Metaverse are going to be utilised to enhance this way of thinking and behaviour. Countries are going to leap on these technologies and platforms as a way to build their footprint and influence in the world.
XR Today: In September, Meta launched an initiative to ethically build the Metaverse. What does it say about the direction that companies such as Meta plan to go?
Abishur Prakash: Firstly, in the vertical world, companies are now picking sides. If you talk to an executive, the companies, especially the big ones, try and stay neutral as much as possible because it’s not in their interest to pick sides, but to eye more access to consumers and revenues.
These days, companies are picking sides. For example, the recent exit from China of LinkedIn and Yahoo, reveals clear indicators companies are accepting that certain markets have become off-limits. You look at TikTok in India, and these global bridges that have connected the world and whole populations are starting to come down, [posing] a very serious challenge.
What Meta is doing is also picking sides by aligning with these countries and organisations. It’s a message that we are building this Metaverse in alignment and in partnership with a certain ideology and cultural approach to these things. It’s a geopolitical signal that large technology companies can drive geopolitics and world affairs as much as sovereign governments are.
Take for example Softbank in Japan. Last year, the founder of SoftBank [Masayoshi Son] announced he wants to build an AI connectivity corridor between Japan, India, and Southeast Asia. As we see these technology-based fault lines emerge, for Japan, its companies are some of the most globalised companies on Earth. I mean, we’ve all grown up with Japanese brands.
Now you have one of the biggest, most iconic Japanese firms voicing it does not want to connect with the entire Indo-Pacific, but only with certain countries, specifically India and countries in Southeast Asia.
This may not have been [overtly] said, but in the background, there’s definitely the concern of China, which is behind these new initiatives.
Tech giants like Meta—whatever initiatives they undertake, such as the ones in the Americas, Africa, and Europe—will definitely have an impact on the vertical world and geopolitics.
Regarding the relationship between the US and China, right now, if you think about how technology is driving that relationship, there’s a lot of talk of a ‘Tech Cold War’, which is a strange expression because this is not a Cold War. The Soviet Union was never an economic threat to the United States and was never on a path to overtake the US economically.
For China, this is not a Cold War in any regard, but if you think about another term for this tech war and what it means, really, it’s about, “Okay, TikTok ran into some trouble in the US,” or “Okay, Huawei’s 5g is currently being pushed out of certain markets.”
The real technologies haven’t even begun to affect it yet. We haven’t really seen how AI or quantum computing will start to affect and drive this tech war, and the same goes for the Metaverse.
In the coming years, the Metaverse will become a theme due to how it could be utilised. For instance, next year, China is preparing to unveil its digital currency, the digital Yuan, and one of the probably most powerful ways it could launch the currency globally is through a Metaverse or some form of it.
You could also consider Apple launching its MR glasses, which is a product that will be used by billions of people. I’m very sure that, just as Apple launches its AR glasses, so will a Chinese company, and how different ecosystems are integrated into the Metaverse is going to have a big role.
For example, take what kind of platforms might you be able to access or not access, depending on whose Metaverse you’re in. If you’re using the Chinese Metaverse, or Chinese AR glasses, you might be incentivized to order from Diddy, not Uber, or to use the Beidou navigation system, not America’s GPS.
So it’s going to have a massive impact, and the fact that it’s not being discussed, or even included in the discussions about technology regarding US-China relations, is a sign that it’s like a Wild West, that these countries will take their own approach to them, and that’s only going to make tensions even worse.
XR Today: Could international standards and implementing a decentralised platform be more advantageous?
Abishur Prakash: That would be the utopian goal, but in reality, we can see, for example, the United Kingdom has created an institution called D-10, which is made up of 10 democracies such as the US, Japan, Australia, India. They want to set the global rules for 5g, not just for the West or its members.
So, if that’s now the reality, and you have organisations like the Shanghai Cooperation Organisation (SCO), the Eurasian Economic Union (EEU) led by Russia, or the European Union (EU) stating they don’t want to depend on the US or China for its technologies, or allies stating recently they want to have European sovereignty. So, you’re going to have these groups, either literally, more subtly, or explicitly, competing around these technologies, which is going to create a really big challenge.
Another aspect to this entire Metaverse is that it’s not just countries and companies who are creating it, but its cities. You have Seoul [South Korea] saying it wants to create its own Metaverse, which may lead to fragmentation within countries as different cities build their own Metaverses, adding a completely new dimension to the vertical world.
XR Today: Do you believe the Metaverse will be successful, and how would a verticalised world affect its construction, namely amid the ongoing semiconductor shortage?
Abishur Prakash: Let’s start by looking at software. I mean, this really goes back to the vertical world. The whole world for years now, including the world that you and I grew up in, have all used the same software. We grew up on Microsoft operating systems, and now we might have transitioned to Mac OS operating systems, but so has the whole world.
Now you’re seeing China has launched its own [HarmonyOS], South Korea wants to create its own iOS, India wants to create its own iOS, etc, and I’m pretty sure in the next year or two, the Europeans will want to create their own. So, in terms of software, having a common platform that the world uses—that’s ending as well and will affect the Metaverse.
As far as shortages go, we need to distinguish between a shortage caused by physical conditions such as labour challenges or resources that are in short supply, where the actual hardware can’t be manufactured, versus a shortage that’s created because the country will not export certain technologies.
Those are policies several countries have adopted when it comes to advanced tech, specifically in defence, but also in consumer technologies and more [emerging] technologies like quantum computing.
A lot of countries are refusing to export these technologies because they don’t want to give away their competitive edge to adversaries, and so absolutely, this will affect the Metaverse because right now, nobody fully understands this or the multitude of applications that could emerge for the Metaverse.
As the Metaverse is rolled out in different countries and more people join it in different ways, then more products and services are going to emerge, and at the same time, if that’s happening and governments use the Metaverse to achieve a geopolitical goal, then these two areas are definitely going to converge.
That could result in countries forcing you to use certain Metaverses, and countries not allowing certain Metaverses to operate within their borders, countries, and others.
Even in my book, I talk not specifically regarding the Metaverse, but rather about a concept known as ‘technological exclusivity’, which is that hardware might be built to only work with specific software that you might have a chip that’s built that doesn’t work with software from a specific country on purpose.
If that happens, and this exclusivity emerges within the technology space, then it’s also going to create challenges for these companies involved in the Metaverse.
XR Today: Did you have anything else that you wanted to add?
Abishur Prakash: When we talk about the Metaverse and how it’s going to affect either the vertical world or geopolitics, the vertical world is a holistic design of the world and geopolitics are part of it, but so is culture, society, the economy, and business.
If we want to talk specifically about geopolitics, especially regarding the Metaverse right now, we always talk about it from the outside in. How will France regulate the Metaverse? That’s an important aspect, but we should also adopt an inside-out approach such as how behaviour within the Metaverse will affect geopolitics. For instance, Barbados announced it wants to create an embassy in the Metaverse.
You’re going to have diplomacy and countries building their relationships within the Metaverse, and this adds a completely different variable to the mix. That’s going to take how we assess global politics and geopolitics into a brand new direction.