Globalization Retreat and Tech Politicization
| Sachin Kesiraju | Jul 1, 2020 |
Last week, an important underreported release from the European Union Parliament detailed a plan to introduce a government controlled Internet similar to the Chinese firewall. This news along with India’s recent ban on Chinese apps (including Tik Tok) represents a global shift towards the territorialization of cyberspace — the Internet becoming disjoint segments of sovereign spaces or a “Splinternet”. More countries have started to recognize the economic value left on the table from not investing in digital technology at home and seek to replicate the tech boom in the US. In their effort to aggressively fund local early stage companies and increase competition, digital policies inspired by the Chinese firewall mark a retreat from globalization to artificially constrain foreign competition. In addition, social media and online forums are being recognized by governments as weapons for propaganda and more countries are seeking “cybersovereignty” to suppress foreign ideology and impose cultural protectionism.
The dominance of US internet companies has indirectly led to the spread of American politics and culture overseas, influencing the mainstream even in non-Western countries — eg: countries around the world such as Japan & NZ are marching for BLM, Indian youth in rural conservative towns are adopting liberal progressivism such as support for LGBT causes and heck, even a guy I met last Dec from a small town in Lithuania keeps up with the Kardashians. To a foreign regulator, the open internet is a sort of euphemism for an American hegemonic internet. Nations that regard exposure to American culture as incompatible with nationalism and state-sponsored cultural values are thus increasingly seeking refuge from American “cyberimperialism” to assert control over all online influences on the public (Turkey, Singapore). If American politics is any indication, it’s plausible for a foreign government to interpret a “free” and unregulated internet as a potential threat to power. The message to tech companies is now to build backdoor provisions for government censorship or be exiled from the country’s cyberspace.
The politicization of cyberspaces will have far-ranging consequences on the tech industry. For long Silicon Valley has enjoyed the financial benefits of free internet distribution in a pro-globalization world. A startup working out of a garage in Mountain View has been able to access an expanding global market of online consumers, generate more revenue worthy of higher valuations and increase wealth in the national economy (via venture capital returns). As a result, US entrepreneurs blessed with friendly TAM math have been able to raise millions on a globalization dependent narrative. Uber (in contrast to Lyft) took on a globalization strategy of rapidly expanding internationally to justify its much higher valuation similar to Notion which only receives 18% of its web traffic from the US (#2 being China with ~9%). As more countries and territories like the EU choose a protectionist digital policy to contain consumer spend leaving its borders, we will see more tech companies with globalization dependent growth experience a severe correction.
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excited to return to my roots. reply if you wanna beta test something in the next couple weeks.