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1. Why Does the Global Spyware Industry Continue to Thrive? Trends, Explanations, and Responses

Author:
Steven Feldstein and Brian (Chun Hey) Kot
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The global spyware and digital forensics industry continues to grow despite public backlash following an array of surveillance scandals, many linked to NSO Group’s Pegasus program. This paper explores the resilience of the commercial spyware market and offers ideas about how to limit the spread of invasive cyber surveillance tools. It highlights several factors driving the industry, including elevated demand for intrusion technology from government clients and private customers, as well as inconsistent political will from democratic governments to crack down on these technologies.
Topic:
Science and Technology, Cybersecurity, Democracy, Surveillance, Industry, Forensic Science, and Autocracy
Political Geography:
Global Focus

2. Government Internet Shutdowns Are Changing. How Should Citizens and Democracies Respond?

Author:
Steven Feldstein
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Governments worldwide continue to deploy internet shutdowns and network disruptions to quell mass protests, forestall election losses, reinforce military coups, or cut off conflict areas from the outside world. Data from the past few years show that incidences of global shutdowns have remained steadily high: 196 documented incidents in 2018, 213 incidents in 2019, and 155 in 2020. The first five months of 2021 recorded fifty shutdown incidents.1 Government-instigated internet shutdowns largely took place in relation to five event types: mass demonstrations, military operations and coups, elections, communal violence and religious holidays, and school exams. As Clément Voule, the United Nations special rapporteur on the rights to freedom of peaceful assembly and of association, pointedly observes: “Shutdowns are lasting longer, becoming harder to detect and targeting particular social media and messaging applications and specific localities and communities.”2 Events in Russia have put a finer point on internet shutdown trends. On March 4, 2022, Roskomnadzor, the Russian internet regulator, announced that it would block Facebook and Twitter and would ban new uploads to TikTok.3 On March 14, it added Instagram to the banned list.4 Russian authorities have also restricted access to a slew of news websites, including the BBC, Deutsche Welle, Radio Free Europe/Radio Liberty, and Voice of America. Roskomnadzor claimed these measures were enacted in response to new limits imposed by platforms on Russian propaganda outlets—accusing Facebook of “discrimination.”5 The Kremlin’s crackdown is an ominous signal about where the shutdown struggle is headed in authoritarian countries. Despite these bleak trends, there is a growing international consensus—at least among liberal democracies—that protecting internet access is integrally linked to freedoms of expression and association and forms a crucial part of the global democracy and human rights agenda. This paper picks up on this emerging norm and probes several key questions: What can citizens do to evade authoritarian controls and regain internet access? How can democratic governments support these efforts and push back against governments that shut down and block the internet? The short answer is that there is a multitude of responses available to democracies and civil society organizations to push back against internet blackouts and network disruptions. Democracies can exert meaningful pressure against repressive governments to ease internet blocks, and citizens are able to exercise creative options to circumvent internet controls. The paper walks through different tools available to citizens to evade internet controls. It examines where internet shutdown trends are headed and incentives for particular regimes to adopt new modes of censorship. It then presents a multifaceted strategy for democracies, civil society organizations, and technology developers and companies to counter internet shutdowns.
Topic:
Government, Science and Technology, Democracy, and Internet
Political Geography:
Russia and Global Focus

3. How Huawei’s Localization in North Africa Delivered Mixed Returns

Author:
Tin Hinane El Kadi
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Trade between China and North Africa has increased significantly since the early 2000s, but it has largely reproduced patterns of unequal exchange. Since they were unveiled, the Belt and Road Initiative (BRI) and the Chinese government’s 2016 Arab Policy Paper have signaled the promise of a qualitative shift in China’s engagement with the region. China has committed to increase investments in high-value-added sectors and to boost cooperation in science and technology with countries across North Africa. The digital space is a notable aspect of recent China–North African partnerships. Chinese tech firms are becoming ever more important actors in North Africa through the Digital Silk Road, the digital component of the BRI. North African governments see the Digital Silk Road as an opportunity to help bridge the digital divide and bolster their own national efforts to build digital economies and create high-quality jobs for the millions of unemployed university graduates across the region. In recent years, the region has become home to notable Digital Silk Road projects such as smart cities, satellite navigation centers, data centers, and network infrastructure. Huawei’s localization strategies in Algeria and Egypt show that, far from imposing a one-size-fits-all blueprint on other countries, as Beijing is often depicted as doing in U.S. and European media and policy discussions, Chinese tech players adapt their engagement depending on local development agendas. Flexibility, customization, and services tailored to local demand have been cornerstones of Huawei’s localization strategies in North Africa. Accommodating local development priorities is central to Huawei’s success in globalizing its business ventures. The Chinese firm has responded favorably to Algeria’s and Egypt’s attempts to leverage foreign companies for conducting more value-added activities within their respective economies. Among other things, Huawei opened its first African factory in Algeria, employing Algerians to assemble products for and beyond the Algerian market. It also launched an OpenLab for conducting research and development (R&D) activities in Egypt and established partnerships with several universities in the region to train local students. However, closer scrutiny of Huawei’s localization in both Algeria and Egypt indicates that the company improved its brand image without engaging in meaningful capacity building. For all its success at winning the hearts of government officials across the region, Huawei has engaged in training, manufacturing, and R&D in a way designed to maintain the firm’s technological edge. The Chinese tech giant has managed to localize seemingly developmental activities in North Africa without contributing much to technological upgrading. North African governments should take lessons from China’s playbook of how it became a technological superpower. This means adopting policies that could maximize the benefits of Chinese and non-Chinese investments by ensuring positives spillovers and protecting potential local tech champions. Increasing economic integration across North African countries and moving beyond fragmented bilateral commercial negotiations with China are two steps that may help level the playing field with the Asian giant.
Topic:
Development, Science and Technology, Telecommunications, Huawei, and Digital Space
Political Geography:
China, Asia, Algeria, North Africa, and Egypt

4. U.S.-China Technological “Decoupling”: A Strategy and Policy Framework

Author:
Jon Bateman
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Carnegie Endowment for International Peace
Abstract:
A partial “decoupling”2 of U.S. and Chinese technology ecosystems is well underway. Beijing plays an active role in this process, as do other governments and private actors around the world. But the U.S. government has been a primary driver in recent years with its increased use of technology restrictions: export controls, divestment orders, licensing denials, visa bans, sanctions, tariffs, and the like. There is bipartisan support for at least some bolstering of U.S. tech controls, particularly for so-called strategic technologies, where Chinese advancement or influence could most threaten America’s national security and economic interests. But what exactly are these strategic technologies, and how hard should the U.S. government push to control them? Where is the responsible stopping point—the line beyond which technology restrictions aimed at China do more harm than good to America? These are vexing questions with few, if any, clear answers. Yet the United States cannot afford simply to muddle through technological decoupling, one of the most consequential global trends of the early twenty-first century. The U.S. technology base—foundational to national well-being and power—is thoroughly enmeshed with China in a larger, globe-spanning technological web. Cutting many strands of this web to reweave them into new patterns will be daunting and dangerous. Without a clear strategy, the U.S. government risks doing too little or—more likely—too much to curb technological interdependence with China. In particular, Washington may accidentally set in motion a chaotic, runaway decoupling that it cannot predict or control. Sharper thinking and more informed debates are needed to develop a coherent, durable strategy. Today, disparate U.S. objectives are frequently lumped together into amorphous constructs like “technology competition.” Familiar terms like “supply chain security” often fail to clarify such basic matters as which U.S. interests must be secured and why. Important decisions are siloed within opaque forums (like the Committee on Foreign Investment in the United States [CFIUS]), narrow specialties (like export control law), or individual industries (like semiconductors), concealing the bigger picture. The traditional concerns of “tech policy” and “China policy” receive outsized attention, while second-order implications in other areas (such as climate policy) get short shrift. And as China discourse in the United States becomes more politically charged, arguments for preserving technology ties are increasingly muted or not voiced at all. This report aims to address these gaps and show how American leaders can navigate the vast, perilous, largely unmapped terrain of technological decoupling. First, it gives an overview of U.S. thinking and policy—describing how U.S. views on Chinese technology have evolved in recent years and explaining the many tools that Washington uses to curb U.S.- China technological interdependence. Second, it frames the major strategic choices facing U.S. leaders—summarizing three proposed strategies for technological decoupling and advocating a middle path that preserves and expands America’s options. Third, it translates this strategy into implementable policies and processes—proposing specific objectives for U.S. federal agencies and identifying the technology areas where government controls are (or are not) warranted. The report also highlights many domestic investments and other self-improvement measures that must go hand in hand with restrictive action.
Topic:
National Security, Science and Technology, Intellectual Property/Copyright, Authoritarianism, Economy, Espionage, Military, and Interdependence
Political Geography:
China, Asia, North America, and United States of America

5. Localization and China’s Tech Success in Indonesia

Author:
Gatra Priyandita, Dirk Van Der Kley, and Benjamin Herscovitch
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
On average, Indonesians distrust China and many Chinese firms. Yet Huawei and to a lesser extent ZTE have successfully positioned themselves as trusted cybersecurity providers to the Indonesian government and the Indonesian nation. This has been no easy feat given long-held Indonesian animosity toward China. Many Chinese companies have faced protests over concerns they were taking local jobs. Huawei and ZTE have suffered no such fate. Nor has there been a broad coalition of Indonesian voices against using Chinese technology in critical telecommunications infrastructure. In short, Indonesians care a lot more about Chinese cement plants than they do about Huawei involvement in 5G networks. Gatra Priyandita Gatra Priyandita is an analyst at the International Cyber Policy Centre at the Australian Strategic Policy Institute, where he leads a project researching cyber-enabled intellectual property theft. He is a political scientist by training and specializes in the study of foreign policy and security in Southeast Asia. He holds a PhD in political science from the Australian National University. This is a vastly different conversation to those happening in rich liberal democracies. Huawei and ZTE have been able to achieve success in Indonesia, despite a sense of ambivalence among the Indonesian political and defense establishment about Chinese intentions and growing Western scrutiny over the use of Chinese technology in broadband networks. As other papers in this series have demonstrated, Huawei and ZTE needed to localize their strategies. Like elsewhere in the world, available evidence suggests that part of Huawei’s and ZTE’s value proposition is cheaper prices (compared to those of competitors) for high-quality technology. But that is only part of the story. Huawei has positioned itself as Indonesia’s cybersecurity provider of choice by offering enormous cybersecurity and other related training programs across the country for groups ranging from senior government officials to students in rural Indonesia. Much of this training is technically focused on practical vocational skills with a hope that students one day will become customers. In addition, the company offers an attractive maintenance and upkeep package. Since the mid-2000s, Chinese information and communications technology (ICT) firms have created training centers in partnership with local Indonesian telecoms companies and universities to train the next generation of Indonesian engineers and tech specialists. Government agencies are also increasingly targets of training and capacity-building programs, with Huawei claiming that 7,000 government officials have participated in its training programs. The Indonesian government, corporations, and ordinary citizens alike have welcomed Huawei and ZTE as essential partners in their efforts to build both the infrastructure and human capital necessary to prosper in the twenty-first century’s digital economy. What Huawei and ZTE offer is knowledge transfer, not technology transfer. The technology is still being built in China by Chinese firms. Huawei’s role in training relates instead to capacity building. Indonesians will install, maintain, and use the networks. China will build the hardware. There is also evidence that China has had some rhetorical success in pushing its version of cyberspace governance. Beijing’s preferred cyberspace governance language was inserted into a memorandum of understanding between Indonesia’s National Cyber and Crypto Agency and the Cybersecurity Administration of China. However, it is difficult to see how the memorandum has influenced Indonesia’s cybersecurity governance in practice. One of the concerns often leveled by rich liberal democracies is that reliance on Chinese tech will end up aligning the political interests of countries like Indonesia with those of China. Other key worries are China’s pervasive espionage and the enduring (though as yet unrealized) risk that Chinese companies with a dominant role in an ICT ecosystem could be used by Beijing to apply coercive political pressure. Despite Indonesia’s embrace of Huawei and ZTE, political leaders in Jakarta have not simply disregarded the hard security questions posed by upgrading ICT equipment, especially when foreign suppliers are involved. Indonesian officials simply rate the need for development and cybersecurity-related capacity building higher than the risk of using Chinese ICT hardware in their critical infrastructure systems. If rich liberal democracies are concerned about this trend, then they need to offer workable alternatives that place Indonesia’s enormous digital development needs at the heart of any value proposition. It is unlikely that Indonesia will stop using Chinese hardware in its infrastructure, but alternatives could prevent overreliance.
Topic:
Foreign Policy, Science and Technology, Cybersecurity, Telecommunications, and Localization
Political Geography:
China, Indonesia, and Asia

6. Understanding and Responding to Global Democratic Backsliding

Author:
Thomas Carothers and Benjamin Press
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Over the past two decades, democratic backsliding has become a defining trend in global politics. However, despite the extensive attention paid to the phenomenon, there is surprisingly little consensus about what is driving it. The most common explanations offered by analysts—ranging from the role of Russia and China and disruptive technologies to the rise of populism, the spread of political polarization, and democracies’ failure to deliver—fall short when tested across a wide range of cases. A more persuasive account of backsliding focuses on the central role of leader-driven antidemocratic political projects and the variety of mechanisms and motivations they entail. This paper identifies and analyzes three distinct types of backsliding efforts: grievance-fueled illiberalism, opportunistic authoritarianism, and entrenched-interest revanchism. In cases of grievance-fueled illiberalism, a political figure mobilizes a grievance, claims that the grievance is being perpetuated by the existing political system, and argues that it is necessary to dismantle democratic norms and institutions to redress the underlying wrongs. Opportunistic authoritarians, by contrast, come to power via conventional political appeals but later turn against democracy for the sake of personal political survival. In still other backsliding cases, entrenched interest groups—generally the military—that were displaced by a democratic transition use undemocratic means to reassert their claims to power. Although motivations and methods differ across backsliding efforts, a key commonality among them is their relentless focus on undermining countervailing governmental and nongovernmental institutions that are designed to keep them in check. As international democracy supporters continue to refine their strategies of responding to democratic backsliding, they must better differentiate between facilitating factors and core drivers. Such an approach will point to the need for a stronger focus on the nature of leader-driven antidemocratic projects, identifying ways to create significant disincentives for backsliding leaders, and bolstering crucial countervailing institutions. Moreover, they should deepen their differentiation of strategies to take account of the diverse motivations and methods among the three main patterns of backsliding. Only in this way will they build the needed analytic and practical capacity to meet the formidable challenge that democratic backsliding presents.
Topic:
Science and Technology, Democracy, Populism, and Democratic Backsliding
Political Geography:
Global Focus

7. A CERN Model for Studying the Information Environment

Author:
Alicia Wanless and Jacob N. Shapiro
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
After the Second World War, European science was suffering. Scientists were leaving Europe in pursuit of safety and work opportunities, among other reasons. To stem the exodus and unite the community around a vision of science for peace, in 1949, a transatlantic group of scholars proposed the creation of a world-class physics research facility in Europe.1 The grand vision was for this center to unlock the mysteries of the universe. Their white paper laid the foundation for the European Center for Nuclear Research (CERN), which today supports fundamental research in physics across an international community of more than 10,000 scientists from twenty-three member states and more than seventy other nations.2 Together, researchers at CERN built cutting-edge instruments to observe dozens of subatomic particles for the first time. And along the way they invented the World Wide Web, which was originally conceived as a tool to empower CERN’s distributed teams. Such large-scale collaboration is once again needed to connect scholars, policymakers, and practitioners internationally and to accelerate research, this time to unlock the mysteries of the information environment. Democracies around the world are grappling with how to safeguard democratic values against online abuse, the proliferation of illiberal and xenophobic narratives, malign interference, and a host of other challenges related to a rapidly evolving information environment. What are the conditions within the information environment that can foster democratic societies and encourage active citizen participation? Sadly, the evidence needed to guide policymaking and social action in this domain is sorely lacking. Researchers, governments, and civil society must come together to help. This paper explores how CERN can serve as a model for developing the Institute for Research on the Information Environment (IRIE).3 By connecting disciplines and providing shared engineering resources and capacity-building across the world’s democracies, IRIE will scale up applied research to enable evidence-based policymaking and implementation. Where CERN “exists to understand the mystery of nature for the benefit of humankind,” IRIE will exist to understand the mystery of the information environment for the benefit of democracies and their citizens.4 While the laws of physics change slowly, the conditions within the information environment are little understood and changing rapidly through the addition of new technology. Additionally, studying the information environment will require analysis of personal and at times sensitive data of internet users, increasing the need for international collaboration. As CERN did by inventing new collaboration tools, IRIE will leverage those same technologies to unlock the collective genius of researchers and practitioners from a variety of fields to strengthen democracy, alongside interested citizens who contribute their own data and expertise. While there are obvious differences between the field of physics and those emerging to study the information environment, aspects of CERN’s development can guide the creation of IRIE, an institution that can uniquely address the growing needs of researchers.
Topic:
Science and Technology, Research, Collaboration, Information, and CERN
Political Geography:
Global Focus

8. A High-Tech Alliance: Challenges and Opportunities for U.S.-Japan Science and Technology Collaboration

Author:
James L. Schoff, Douglas E. Rake, and Joshua Levy
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
In both Japan and the United States, there is a growing recognition that national security and alliance security involve more than just military concerns and extend to new technology areas and their economic effects. Looming over the two allies is a wide-ranging question of how to enable greater science and technology (S&T) research collaboration for commercial and defense purposes, involving such fields as artificial intelligence (AI), quantum information science (QIS), cybersecurity, and space utilization. Competing domestic political and economic considerations in each country make this a particularly complex challenge for policymakers, who can be expected to treat the international sharing or sale of assorted technologies differently. Still, there is little doubt that it is in the mutual interest of Japan and the United States to harmonize their approaches and find acceptable ways to enable deeper and broader S&T collaboration—and to do so expeditiously.
Topic:
Science and Technology, Bilateral Relations, Alliance, and Collaboration
Political Geography:
Japan, Asia, North America, and United States of America

9. Understanding the Encryption Debate in India

Author:
Anirudh Burman and Prateek Jha
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Encryption has become a contentious instrument for protecting the security and confidentiality of online communication. Rapid digitalization in the past decade has led to the proliferation of domestic and foreign online communication services that use encryption and, consequently, pose challenges to national security bodies and law enforcement agencies (LEAs). To address these challenges, the Indian government introduced new regulations in February 2021. These regulations require large social media platforms to enable traceability, or the ability to provide information concerning the originator of online communications. Technology companies and privacy activists have opposed such a move on the grounds that traceability would require the breaking of the end-to-end encryption used by many online communication platforms like WhatsApp and therefore would compromise the security of online communications on such platforms. This traceability requirement, however, is only the latest development in a drawn-out, contentious debate over the use of encryption. The contestation between maintaining higher degrees of online security and issuing new rules to grant technological exceptions for security agencies and LEAs is not specific to India. One of the first serious discussions on the issue took place in the United States in the 1990s, when public opposition warded off an early government attempt to sidestep encryption protections with a court order. In the past decade, the use of encryption has only grown more pronounced. The revelations that the United States’ National Security Agency was collecting vast amounts of communications data led to the introduction and increased adoption of end-to-end encryption for online communications. End-to-end encryption is now used widely by online communication platforms like WhatsApp, Signal, and Threema. Its use presents law enforcement and national security agencies with new challenges. Even though these agencies today have greater and easier access to more information than ever before, the absolute confidentiality provided by encrypted online communication platforms makes it harder for these agencies to engage in real-time surveillance to investigate crimes and identity wrongdoers. While some policymakers from India and other countries argue that encryption must only be weakened to solve specific problems, most experts agree that, as of today, there is no technological solution that would weaken encryption for specific law enforcement and national security purposes, while managing to maintain preexisting levels of security and confidentiality for general use. The introduction of any mechanism for specific access would, it is claimed, introduce both known and unknown vulnerabilities into these communications platforms. Such a mechanism would have a systemic effect on all online communication dependent on encryption for ensuring security and confidentiality. In India, these developments create challenges in specific ways. For example, India reports the highest number of child pornography cases worldwide, and encrypted communications makes it difficult to identify culpable parties. Similarly, as India has digitized rapidly, there has been a surfeit of fake and offensive online news that has, in some cases, led to mob lynchings. In addition, terrorist networks have been found to be using encrypted communication channels while planning and carrying out terrorist attacks in India. Over the years, the Indian government’s approach to encryption has responded to these concerns in a variety of ways. Indian financial regulators mandated the use of encryption for banking and financial services as they realized the security of such transactions was best protected through encryption. At the same time, the Indian government prohibited telecom operators from implementing bulk or mass encryption in telecommunication services. Starting in 2015, the government introduced different regulatory proposals requiring that messaging platforms and other communication service providers provide plaintext copies of communications to Indian government agencies on request. These proposals, however, faced significant opposition and were withdrawn. Earlier in 2021, the Indian government’s new rules requiring traceability have been officially notified. The mechanisms through which they will be implemented are not yet clear. It is also unclear if these rules are the last demands the Indian government will make to weaken encryption, or whether further demands will arise in the future. To weigh the relative benefits and drawbacks of the Indian government’s proposal, analysts should consider relevant factors such as (but not limited to) whether such changes will offer law enforcement officials the access they desire, how the security of encrypted communications will be affected, and how citizens’ civil liberties will be impacted, among others.
Topic:
Security, National Security, Science and Technology, Law Enforcement, Digitalization, and Encryption
Political Geography:
South Asia and India

10. How China Learned to Harness Israel’s Media and Booming Tech Scene

Author:
Roie Yellinek
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Israel and China established full diplomatic relations only in 1992, making Israel almost the last Middle Eastern country to do so. Starting in the early 2000s, ties between the two countries began to blossom, mostly because the Chinese government started to view Israel as a global technology hub and began seeking to capitalize on Israel’s innovation capabilities to help meet its own developmental needs and strategic challenges. In addition, as China’s rivalry with Israel’s leading ally, the United States, has heated up, Beijing’s interest in Israel also has gotten stronger. In light of Israel’s status as a major technology hub and a leading U.S. ally, China has sought to deepen its influence in Israel through media engagement and other forms of outreach. As Chinese actors have pursued technological innovation and greater political influence in Israel, they have employed three basic approaches to court favor in and through Israeli media circles: direct messaging to the Israeli public in local Hebrew-language newspapers, the use of Chinese outlets (especially the Hebrew department of China Radio International) targeted at Israeli audiences, and efforts to leverage prominent public figures friendly toward China to amplify favorable messages delivered on these local Israeli and Chinese platforms. China’s messaging strategy in Israel has evolved in three stages. Early on, this strategy mainly included recycled talking points from the Chinese Communist Party that do not always translate well overseas. Between 2015 and 2018, this messaging from Chinese actors started to become more direct and tailored for the Israeli people. Since 2018, Chinese engagement has expanded to include a much wider variety of Israeli media outlets, which has meant even more direct access to ordinary Israelis. This strategy and other elements of China’s diplomatic outreach to Israel seem to be having an impact. According to 2019 polling from the Pew Research Center, Israeli respondents view China more positively than those in any other Western-oriented countries that took part in this survey did. These results are an outgrowth of China’s desire to build influence vis-à-vis Israeli society, especially in terms of Israelis’ views on China. Chinese government officials and other actors see this campaign toward the Israeli people as part of a broader and more important strategic campaign, as Beijing competes with Washington for worldwide influence. Israel has a clear national interest in carefully examining how and why Beijing deploys such strategic messaging and how Chinese actors have leveraged local conditions, language habits, and consumer preferences to advance their objectives. The new Israeli government under Prime Minister Naftali Bennett must act prudently and keep these Chinese messaging activities in mind as it balances and advances Israel’s foreign policy interests, seeking to underscore that it does not see China as an enemy but that cooperation with Beijing needs to be pursued in the right way.
Topic:
Diplomacy, Science and Technology, Bilateral Relations, and Media
Political Geography:
China, Middle East, Israel, and Asia

11. Taiwan’s Opportunities in Emerging Industry Supply Chains

Author:
Evan A. Feigenbaum and Michael R. Nelson
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
To some, the acute supply chain crisis that has followed in the wake of the coronavirus pandemic is a sign of poor planning, lack of resilience and surge capacity, and industry rigidity. Inflation is also having a major impact and will inevitably lead to some supply chain reconfiguration. But structural shifts matter too, including rising costs in mainland China—the world’s manufacturing’s powerhouse—and the overconcentration of freight in just ten companies that control 85 percent of global container capacity. Globalization has bequeathed a system that seemed efficient until it was tested by the multidimensional crises of the last two years. In industry after industry, C-suites are planning for a world of disruption. At a minimum, companies aim to build resilience and redundancy into their supply chains. But there is another factor—political risk—that is complicating planning, especially in technology-intensive industries. Specifically, the emergence of multidimensional strategic competition between Beijing and Washington has interrupted the flow of goods, capital, people, technology, and data. And these geopolitical disruptions look set to become a long-term structural trend. This is a sea change that will invariably bleed into many industries and rejigger supply chains. But amid the disruption, some economies will have fresh opportunities to attract investment, build out new industries, and diversify their growth drivers. Taiwan is one such economy that may stand to benefit from the supply chain rethink. This paper explores some ways that it could do so. But to seize opportunities in this dynamic environment, Taiwan needs policy changes and technology investments to better position its ecosystem of government, business, academia, research institutions, and labor to attract new supply chain opportunities, especially for the Fourth Industrial Revolution and the emerging economy of the twenty-first century. Two prior Carnegie Endowment studies of Taiwan’s economic competitiveness included specific recommendations that could comprise the foundation of an ecosystem that serves the public interest by bolstering Taiwan’s profile and role in more and more global supply chains. Most notably, these were Carnegie’s recommendations to position Taiwan’s economy as a trusted hub, trusted vendor, trusted tester, and trusted conduit for technology-intensive R&D and production. Taiwan’s public interest would benefit if such opportunities became a counterpoint to mainland China’s scale advantages. But Taiwan faces intense competition from other economies in Asia and Europe that also seek to capitalize on supply chain shifts, reaping the harvest from their investments while carving out specialized niches amid rising suspicion of mainland China-origin technology products and services. This study aims to help to refine competitive choices for Taiwan while highlighting unique comparative advantages that would make it an especially attractive place for new global investments. The paper digs deeply into two opportunities for Taiwan. The first involves dynamic changes in one of the high-tech industries that Taipei has made into a strategic priority—the life sciences, including biotechnology and precision medicine. Despite twenty years of concerted effort and some signal successes, especially with drug development and diagnostics, Taiwan has not captured a role or market share analogous to its multidecade build-out in semiconductors. For Taiwan, trust will be the crucial variable and competitive advantage. Taiwan could, for example, leverage its advantages with high-quality medical data to become a locus for clinical trials, while also leveraging other advantages for global supply chains in the drug discovery, advanced diagnostics, and personalized medicine markets. But to do so, it will need to make policy and regulatory changes and make some new strategic investments. The second chapter turns to whether Taiwan’s economy could be positioned as a leader in testing, validating, and deploying software, which would give Taiwan-based firms a larger role in the information technology services business where mainland China, India, and others have a larger profile. Elements of Taiwan’s ecosystem could potentially be positioned to use software engineering to ensure that business software and services produced by local companies and their international partners are more tested and more trusted than competing products on the market.
Topic:
Science and Technology, Geopolitics, Investment, Industry, and Supply Chains
Political Geography:
Taiwan and Asia

12. Overcoming Taiwan’s Energy Trilemma

Author:
Evan A. Feigenbaum and Jen-Yi Hou
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Taiwan needs to look not just to the energy it needs right now but also to the energy it will need ten to twenty years from now if it is to power its future. This paper focuses on two elements of the paradigmatic transformation that are especially relevant to Taiwan’s future: (1) the rise of new energy and storage technologies, and (2) the dynamics of liquefied natural gas pricing. In particular, it looks at several ways in which new investment partnerships between Taiwan and U.S. players could bolster Taiwan’s ambitious effort to build out renewable energy as a source of industrial and residential power.
Topic:
Energy Policy, Markets, Science and Technology, Investment, and Fossil Fuels
Political Geography:
Middle East, Taiwan, and United States of America

13. Assuring Taiwan’s Innovation Future

Author:
Evan A. Feigenbaum
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Innovation has been a source of comparative advantage for Taiwan historically. It has also been an important basis for U.S. firms, investors, and government to support Taiwan’s development while expanding mutually beneficial linkages. Yet, both Taiwan’s innovation advantage and the prospect of jointly developed, technologically disruptive collaborations face challenges. For one, Taiwan’s technology ecosystem has been hollowed out in recent decades as personal computing (PC), component systems, and mobile device manufacturing moved across the Taiwan Strait to mainland China. Meanwhile, Taiwan’s innovation ecosystem has struggled to foster subsequent generations of startups to replace these losses in electronics manufacturing. Despite a freewheeling startup culture, internationalization has been a persistent challenge for Taiwan-based firms. Technological change and political challenges from Beijing present additional risks to Taiwan’s innovation future. In this context, it is essential that Taiwan get back to basics if it is to assure its innovation advantage. One piece of this will involve taking a hard look at the domestic policy environment in Taiwan to ensure a steady pipeline of next-generation engineering talent. Yet Taiwan also needs to address several structural and policy factors that, over the last decade, have eroded its enviable innovation advantage.
Topic:
Science and Technology, Partnerships, Investment, and Innovation
Political Geography:
Taiwan and United States of America

14. Cyberspace and Geopolitics: Assessing Global Cybersecurity Norm Processes at a Crossroads

Author:
Christian Ruhl, Duncan Hollis, Wyatt Hoffman, and Tim Maurer
Publication Date:
02-2020
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
As cyber insecurity has become a growing problem worldwide, states and other stakeholders have sought to increase stability for cyberspace. As a result, a new ecosystem of “cyber norm” processes has emerged in diverse fora and formats. Today, United Nations (UN) groups (for example, the Group of Governmental Experts [GGE] and the Open-Ended Working Group [OEWG]), expert commissions (for example, the Global Commission on the Stability of Cyberspace), industry coalitions (for example, the Tech Accord, the Charter of Trust), and multistakeholder collectives (for example, the Paris Call for Trust and Security in Cyberspace) all purport to identify or operationalize various normative standards of behavior for states and/or other stakeholders in cyberspace. As some of these processes wind down (for example, the Global Commission) and others wind up (for example, the OEWG), cyber norms are at a crossroads where each process’s potential (and problems) looms large.
Topic:
Security, Science and Technology, Cybersecurity, Geopolitics, and Norms
Political Geography:
Global Focus

15. Will India’s Proposed Data Protection Law Protect Privacy and Promote Growth?

Author:
Anirudh Burman
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
How should a legal framework for data protection balance the imperatives of protecting privacy and ensuring innovation and productivity growth? This paper examines the proposed data protection legislation in India from the perspective of whether it maintains this balance. In December 2019, the government introduced the Personal Data Protection Bill, 2019, in parliament, which would create the first cross-sectoral legal framework for data protection in India.1 This paper argues that the bill does not correctly address privacy-related harms in the data economy in India. Instead, the bill proposes a preventive framework that oversupplies government intervention and strengthens the state. This could lead to a significant increase in compliance costs for businesses across the economy and to a troubling dilution of privacy vis-à-vis the state. The paper argues that while the protection of privacy is an important objective, privacy also serves as a means to protecting other ends, such as free speech and sexual autonomy. A framework for protecting personal data has to be designed on a more precise understanding of the role of privacy in society and of the harms that emanate from violations of individual privacy.
Topic:
Science and Technology, Law, Privacy, and Data
Political Geography:
South Asia and India

16. Cyber Mapping the Financial System

Author:
Jan-Philipp Brauchle, Matthias Göbel, Jens Seiler, and Christoph Von Busekist
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Cyber risks present a growing threat for individual agents in the financial system: banks, insurers, central counterparties, and the like. However, cyber events may also have the potential to destabilize the financial system as a whole. While dedicated microprudential regulatory and supervisory regimes are in place or are being developed to manage cyber risks especially at credit institutions, what is lacking is a systemic view of cyber risks that particularly sheds light on concentrations and contagion channels that are material to the financial system.
Topic:
Science and Technology, Finance, Networks, Risk, and Financial Institutions
Political Geography:
Global Focus

17. International Strategy to Better Protect the Financial System Against Cyber Threats

Author:
Tim Maurer and Arthur Nelson
Publication Date:
11-2020
Content Type:
Special Report
Institution:
Carnegie Endowment for International Peace
Abstract:
In February 2016, a few months after Carnegie began its work on this project, a cyber attack shook the finance world. Hackers had targeted SWIFT, the global financial system’s main information network, trying to steal 1 billion U.S. dollars, nearly 0.50 percent of Bangladesh’s GDP, from the Bangladeshi central bank over the course of a weekend. It was a wake-up call revealing that cyber threats targeting the financial sector were no longer limited to low-level theft but could now pose systemic risk. Only a few months earlier, in 2015, the Carnegie Endowment for International Peace had launched an initiative to better protect the global financial system against cyber threats. Our first step was to develop a proposal for the G20 to launch a work stream dedicated to cybersecurity in the financial sector. In March 2017, the G20 Finance Ministers and Central Bank Governors outlined an initial road map to increase the cyber resilience of the international financial system. In the wake of the Bangladesh incident, Carnegie expanded its work, complementing the G20 project with the development of an action-oriented, technically detailed cyber resilience capacity-building tool box for financial institutions. Launched in 2019 in partnership with the IMF, SWIFT, FS-ISAC, Standard Chartered, the Global Cyber Alliance, and the Cyber Readiness Institute, this tool box is now available in seven languages. And we are continuing to track the evolution of the cyber threat landscape and incidents involving financial institutions through a collaboration with BAE Systems. To raise more awareness among senior officials of the growing threat, Carnegie also hosted a series of roundtables at the Munich Security Conference, including a cyber war game, dedicated to cybersecurity and the financial system. We co-hosted a high-level roundtable with the IMF for central bank governors and launched a workshop series at Wilton Park to strengthen the relationships among financial authorities, industry, and law enforcement as well as national security agencies. In July 2019, an international group—convened by Carnegie—of leading experts in governments, central banks, industry, and the technical community decided that there would be value in developing a longer-term international cybersecurity strategy for the financial system. This report is the result of that project and offers a vision for how the international community could better protect the financial system against cyber threats. The recommendations are designed to inform the deliberations among the G20, the G7, relevant standard-setting bodies as well as the Annual Meeting of the World Economic Forum and the Munich Security Conference. Written by Carnegie experts, this document includes feedback obtained through consultations with more than 200 stakeholders in government, the financial regulatory community, industry, and academia. An international advisory group, formed in fall 2019, provided strategic advice throughout the project. In February 2020, following Carnegie’s presentation of this project at the Forum’s annual meeting in Davos the previous month, the World Economic Forum became an official partner.
Topic:
Science and Technology, Cybersecurity, Finance, and Non-Traditional Threats
Political Geography:
Global Focus and United States of America

18. The EU’s Role in the Fight Against Disinformation: Developing Policy Interventions for the 2020s

Author:
James Pamment
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The EU needs a disinformation strategy that is adaptable and built to last. The European Union (EU) needs a well-conceived and forward-looking policy for countering threats in the information space, especially those posed by disinformation, influence operations, and foreign interference. Because of the amorphous and ever-changing nature of the threat, EU officials and their counterparts in EU member states would do well to craft an approach that draws on a variety of effective tools, including strategies for altering adversaries’ behavior, nonregulatory principles and norms to foster a well-functioning digital public sphere, and regulatory interventions when necessary to ensure that digital platforms uphold suitable norms, principles, and best practices.
Topic:
Science and Technology, European Union, Disinformation, Non-Traditional Threats, and Digital Policy
Political Geography:
Europe

19. Cross-Border Data Access for Law Enforcement: What Are India’s Strategic Options?

Author:
Smriti Parsheera and Prateek Jha
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Access to cross-border data is an integral piece of the law enforcement puzzle. India is well placed to lead the discussions on international data agreements subject to undertaking necessary surveillance reforms. Access to cross-border data for the state’s law-and-order-related functions is an integral piece of the law enforcement puzzle. State agencies’ ability to access data for such purposes is, however, shaped not only by domestic laws and practices but also by the laws of other countries and the state’s international commitments. In the case of India, the use of international cooperation mechanisms to balance efficient data access with protections for citizens’ privacy remains a relatively underexplored facet of its digital strategy. With its growing digital market, economic relevance for large global businesses, and strategic relationships with countries like the United States and those in the European Union (EU), India is well placed to not merely participate in but rather to lead the discussions on international data agreements on behalf of the developing world. This paper evaluates India’s present mechanisms for data access by law enforcement authorities and existing arrangements for cross-border data access. It also analyzes the emerging global movement toward direct data access arrangements. Such arrangements authorize agencies in one jurisdiction to make direct data requests to service providers based in another jurisdiction. The Clarifying Lawful Overseas Use of Data (CLOUD) Act in the United States is an example of a legislative instrument that allows the United States to enter into executive agreements of this nature. Similar discussions are also underway in Europe under the European Commission’s e-evidence proposal involving its twenty-seven member countries and among the sixty-five states that are party to the Budapest Convention on Cyber Crimes. To date, India has not taken any concrete steps to evaluate the pros and cons of such arrangements. Neither has it paid serious regard to the critical and interconnected issue of reforming its domestic framework on lawful data access to ensure adherence with the fundamental right to privacy.
Topic:
Science and Technology, Law Enforcement, Borders, and Data
Political Geography:
South Asia and India

20. Reinventing Transatlantic Relations on Climate, Democracy, and Technology

Author:
Erik Brattberg
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
To get the transatlantic relationship back and on track and to ensure that it will remain relevant in the future, the United States and the European Union should prioritize putting forward concrete ideas and taking actionable steps on climate and energy, democracy and human rights, and digital technology issues. While the election of Joe Biden to the U.S. presidency presents an opening to restore the transatlantic relationship after Donald Trump, the real question facing U.S. and European officials is whether they can successfully manage to advance a new transatlantic agenda for the coming decade. Three pivotal areas where cooperation has fallen short in recent years but where there is now significant potential to do more are climate and energy, democracy and human rights, and digital technology issues. Representing the most pressing challenges our societies are facing in the twenty-first century, progress in these three areas could also help rebuild trust and promote cooperation in other policy areas. To get the transatlantic relationship back and on track and to ensure that it will remain relevant in the future, the United States and the European Union should therefore prioritize putting forward concrete ideas and taking actionable steps in each of these areas over the coming four years.
Topic:
Climate Change, Human Rights, Science and Technology, Democracy, and Transatlantic Relations
Political Geography:
Europe and United States of America