President Obama’s sit-down with Silicon Valley in Washington before the holidays fittingly highlights a trend that dominated the headlines in 2013 and will only continue to grow in 2014.
While the plight of Edward Snowden and his revelations’ impacts on staunch US allies around the globe ruled the headlines, along with the visiting technology CEO’s concerns about privacy, an emerging sub-current with greater implications for the global economy laid right below the surface for government leaders.
With global e-commerce now topping $1 trillion a year, these companies like countries need to come together on how to broaden access to the digital marketplace for their businesses, even as they compete with each other. Of all the issues for the world’s nations, how to work together to expand internet freedom—access to the web, and being able to surf it freely—will define the future of the global economy.
The recent Bali agreement offers a much needed international trade win along with the Obama administration’s focus on both a Trans-Pacific and Trans-Atlantic free trade that will only further the conversation globally next year. However with the US government shutdown and President Obama’s cancelation of his much-anticipated Asia trip—which included a stop at the Asia Pacific Economic Cooperation Summit—fears continue to predominate about America’s global economic leadership role.
As the world’s largest economies continue to gather in Washington, for annual meetings at the International Monetary Fund and the World Bank, rotating G-8 and G-20 summits offer glimpses of the future.
One player figures to have an outsized role in shaping the outcome of these future meetings and summits: the private sector. As the first-world business community seeks growth opportunities in emerging powers—from Brazil to Turkey to Indonesia—the idea that diplomacy and dollars are linked is increasingly obvious.
But, while every president and finance minister knows that thriving markets and global security go hand in hand, most nations’ diplomacy and institutions are rapidly becoming outdated. Just as Apple constantly re-invents the iPhone and Google tinkers with Gmail, the world’s leading economic powers need to similarly revamp their approach to international commerce.
The term “economic diplomacy” probably conjures images of stodgy suits deliberating over free trade agreements, while “internet commerce” evokes images of hoodie-wearing Silicon valley-type millennials. Today, the two characters are necessarily becoming intertwined—and in some cases, harder to tell apart.
In a more interconnected world, all countries desire to be more influential both abroad and virtually. But in order to do that, leaders can’t just do government-to-government talks. They have to bring their businesses into the negotiating room, and not just for photo opportunities.
Today, successful foreign policymaking requires fostering collaborative, multi-national partnerships between businesses and government, especially in cyberspace. It means opening opportunities for start-ups in Palo Alto to bring their products to entrepreneurs in Africa. It means training the next generation of engineers in Asia for web-based work at Microsoft.
The key to updating the outdated app of diplomacy, so to speak, isn’t more technology or sophisticated internet governance agreements between countries. Rather, it’s tapping into the next generation of tech-savvy entrepreneurs wherever they may be.
International economic and internet governance
Whether it is seen as an organizing tool, a ticket to jobs or a nuisance to the government, the internet is at the center of an array of activity that has shaken the world to its core.
Look, for instance, at Egypt, where the government often boasted about its high rate of internet penetration—then shut it down when protests surged in 2011. Or Brazil, where protestors have staged massive demonstrations over a lack of quality government services. And Turkey—home of the famous Gezi Park protests—which once enjoyed one of the fastest growth rates in the world, and now finds its currency at an all-time low against the dollar. Leaders in all three countries railed against the internet, with the Turkish prime minister going so far as to call social media the “worse menace to society.”
Indeed, protests focused on economic inequality and issues of fairness—fueled by social media—have driven economic debates in almost all of the emerging powers. (Yes, even in leading nations like the U.S. and Britain—remember “Occupy Wall Street”?)
These nations have two choices. They can follow the Arab regimes’ blueprint for stability, which involves responding to protests with hasty constitutional changes, firing some controversial political figures and handouts of cash. But as we’ve seen in the so-called “Arab Spring,” that does not bring long-term stability.
Or they could take a tougher, but longer-term view. They could engage with the core problems facing their societies, like chronic unemployment and corruption, by expanding opportunities for the average citizen. The internet is the place to start. Rather than find ways to clamp down on the web, they should expand access.
While this might sound obvious, the key for the international community is to expand internet access collectively—meaning getting other nations on board, and laying down ground rules of freedom for the web.
Agreeing on the web
At almost all international soirees, internet freedom is often mentioned, but beyond rhetoric, there is little to show for the greatest driver of economic innovation in the 21st century.
Unlike established pillars of international order such as trade and finance, the internet lacks well-defined global rules and practices. Because both established and emerging powers are so dependent on the internet for commerce, it’s a sensible issue to find worldwide agreement on.
As the internet grew in popularity, the U.S. and Europe created a foundation for transparency and freedom of access. While the rash of stories about the National Security Agency hacking your e-mail might lead you to believe otherwise, the U.S. has unparalleled internet freedom. You can click, buy, watch, read and learn almost anything you want, unrestricted by the government.
However, most Internet users now live outside the United States and Europe—a trend that will only accelerate—and emerging powers across the globe are pushing for a stronger voice in constructing a pillar of international order around the Internet.
With a significant number of countries imposing restrictions on the flow of online content and a growing push for a more restricted model of internet governance, the future of the internet—and with it, global commerce as we have come to enjoy it—increasingly hangs in the balance.
It begs a key question: will emerging powers maintain the U.S. and Europe’s policy of an open-door internet?
The answer is that it will depend, to a large extent, on the choices of rising democracies such as Brazil, India, Indonesia and Turkey.
Herein lies America’s opportunity for leadership—as well as a one-of-a-kind economic opportunity for businesses of every size. If the world adopts a more open, transparent internet policy, it’ll be a boon for global commerce.
But the people who need to make that argument on the global stage are not a few feet from the Oval Office. They’re in office buildings, coffee shops, or just about anywhere an internet signal can reach.
For the private sector, investing in an open internet isn’t just charity—it’s an opportunity. In the midst of turmoil and political instability throughout the Middle East, small internet startups and virtual businesses have provided jobs as traditional employment has fallen. The demographic realities of Africa and the Middle East necessitate educating and investing in creative ways that can combine the low-tech (like face-to-face training from local experts) and high-tech (like web-based learning) for future solutions.
By taking on a mentality that everyone stands to gain by collaborating and assigning a senior level government official to coordinate, innovative partnerships could lay a foundation for a freer, more prosperous web. These partnerships would leverage resources by blending public grants with private investments, effectively making the sum greater than the individual parts.
Public-private training programs pioneered by American technology companies such as Cisco, Intel, or Microsoft to name but a few, will give the next generation of engineers, designers and business professionals a lift. What’s more, these programs aren’t only philanthropic—you can bet that these companies are also looking for talented future employees.
The idea is simple: through empowering their private sectors to go global, both established and emerging powers can benefit. Co-creating solutions with civil society and the private sector—not dictating solutions from up high—is the wave of the future given new dynamics.
As we enter 2014, instead of talking about the threat that emerging powers pose to multinational governance structures, established economies like America, the European Union, Korea and Japan would be wise to ask a key question: how can we get our businesses to harness the power of the internet to build bridges for our collective future?
Dr. Joshua W. Walker is a Fellow at the Truman National Security Project and previously served as a Senior Adviser to the U.S. Department of State. He is a contributor to War on the Rocks.