🔮 The Exponential Age’s Maidan moment

For years we didn’t skip a beat in publishing Exponential View every Sunday. This week is different.

We pause the regular Sunday schedule to address the Russian invasion of Ukraine. We are not journalists or reporters, but we do take it upon ourselves to provide a frame to help you make sense of the events, and where they may take us. We are watching the post-Cold War era get dismantled. It is a staggering milestone with deep, deep ramifications.

I (Azeem) specialised in Cold War international relations at University. You can find my thesis on the Cuban Missile Crisis somewhere on the internet. I have kept my knowledge warm, last year investing in the 2021 Military Balance, a journal I bought annually in the late 80s and early 90s. In honesty, the complexity of new wars, as we’ve seen across Asia and the Middle East since 1994 baffled my frame. This current conflict speaks to histories I’ve studied informally for more than 30 years.  

Before I go any further, our thoughts are with those affected by this war.

The events unfolding in Ukraine, the unprovoked invasion by Russian forces, is going to be a multi-front war. It will encompass the bloody, visceral, traditional horror of battle, but with added dimensions unique to the Exponential Age. It is a war that will alter the geopolitical landscape.

I write about the future nature of war in my book, calling it a “new world disorder”:

During the Exponential Age, the attack surface expands and the weapons that can be used against it increase in number. It is not simply that our medieval king's moat is drained of water; it is that the arrival of trebuchet and then cannons have rendered the thick walls meaningless, and the development of aircraft has neutralised the height of the ramparts. No-one today would think of using a castle to defend from a modern assault. This, in short, is what the technologies of the Exponential Age are doing to the modern state, not to mention modern businesses.

All of this leads to a classic exponential gap. The speed of technological change has created new potentials for our adversaries. But the channels we might use to attenuate conflict, or the resources we can draw on to reduce the severity of attacks, have not kept up.

I discussed it at length with General Sir Richard Barrons in one of my all-time favourite podcast episodes. (In the podcast, from 2019, we also talk about Russia’s ambitions in Ukraine.)

It is the first Exponential Age war involving a great power. If you need evidence, consider this: traffic patterns on Google Maps gave analysts hours of notice that the invasion was underway. But that is just a detail.

Here are some thoughts on the ramifications of the conflict.

The Exponential Age battlespace

The battlespace of the Exponential Age expands into the domains of information and cyberspace. While unlikely to secure military advantages, cyberattacks can harm a state’s ability to function: banks go down, ATMs stop working, the lights flicker. Information sharing and influence operations on social media (and other media) can divide a populace.

While we have seen some low-level cyberattacks (like DDOS attacks on Ukrainian government websites) and the deployment of one nasty wiper worm, we haven’t seen any serious cyberattacks. Nor have we seen much evidence of Western powers using their offensive cyber capability to impact Russian functionalities.

On information operations, my sense is that Russia has not really succeeded in Ukraine or indeed in much of the West. Rather, the constant stream of TikTok and remarkable communications from the Ukrainians (who seem to be good at memeing and Substack), has forced Russia to close down their own information space. Given the widespread reaction to the Russian aggression, it isn’t clear that there is much Moscow can do to shift the narrative.

We are still seeing cyber activity on both sides. Belarussian hackers have started to attack the Ukrainian military - the “independent” hacker group, Conti, has come out all guns blazing for the Russian dictator. (Conti were behind a ransomware attack on the Irish health system last year.) Anonymous has sided with Ukraine, stating “We want the Russian people to understand that we know it's hard for them to speak out against their dictator for fear of reprisals. We, as a collective, want only peace in the world. We want a future for all of humanity”.

The problem with cyberspace conflicts is that they are messy. Computer systems are networked, viruses hop from one machine to another, and cascading failures can emerge. Worse, the rules of engagement and escalation are rather unclear. The Russian military is not renowned in recent years for adhering to accepted norms of war, but in the case of cyberspace the norms for escalation are unwritten. Severe cyberattacks may be a trigger for even more severe physical attacks. Since 2019, NATO has acknowledged that a serious cyberattack could allow a member state to trigger Article V.

Juche for all

The North Korean leadership understands the importance of self-reliance, even if they can’t deliver it. The Germans (and many other states in Europe) do not, as they’re relying heavily on Russian gas.

It is a strange ideology built on a deep assumption of a rules-based order driven by economic imperative as a bulwark against conflict. Germany, in particular, compounded this posture with their deeply anti-scientific decision to shut down their nuclear power plants. As a consequence, Germany has found itself rather vulnerable dependent on the flow of natural gas from Gazprom: a Putiniste boot on Berlin’s throat. (Although at the time of writing, gas was flooding healthily into the EU, via Ukraine… profits are good.)

Since 2011, Germany could have invested heavily in renewables, kept its nuclear power stations open, commissioned a range of new ones, including new generation small modular reactors, invested in a more resilient, interconnected gas supply infrastructure and diversified its supply of that bad stuff. Yet, Germany didn’t do any of those things. Rather it made them incredibly and absurdly vulnerable.

There are of course other aspects to the Ukraine story than gas supplies. It is the world’s sixth-biggest exporter of wheat. And more than 90% of the neon for lasers used in making chips is sourced from Ukraine. Many other critical inputs for high-tech industries originate from Russia or Ukraine.

The 40-year wave of price-driven globalisation has delivered an incredibly fragile web of supply chains, ready to fall over at the slightest provocation.

The consequence will be to redouble the importance of building resilience into supply chains. Many technologies of the Exponential Age enable this. Solar is particularly powerful as it lends itself to rooftop, commercial, utility and grid-scale build-outs. Wind power can also be a part of the mix. Small modular reactors (SMRs) coming down the pipe should also be appealing. SMRs might soon be as cheap as coal plants to build, small enough to easily plug into grids and, with passive safety systems, are incredibly safe.

Countries have already learned the painful cost of the semiconductor industry being centralised. Widespread moves to create regional manufacturing capabilities are well underway.

Resilience will need to spread to food systems as well. Urban vertical farms, like 80 Acres (disclosure: I am an investor), as well as precision fermentation, could, in time, deliver more localised and modular food production systems.

Russia too may learn this lesson. While the regime has spent years insulating its internet, making it separable from the global network of networks, it is still utterly dependent on Western high tech. American sanctions may have jammed up the most advanced parts of its economy.

New Keynesianism for the generals and the Greens

The imperative for greater resilience points to the importance of rapid investment in technologies that, frankly, are not dependent on fossil fuels or extended supply chains. These will, increasingly, be investments in sustainable, zero-carbon Exponential Age infrastructure. If supported by governments, via subsidy, incentives or direct acquisition, it could add up to a green Keynesian boost to our economies.

It will also be increasingly clear to all governments that we are in the more febrile space that Richard Barrons and I discussed back in 2018: “we should stop clinging to ways of thinking rooted in the post-Cold War era and start thinking about collective security […] with many more frictions.”

That is apparent. And so European nations must realise their level of military capability is woeful. Not a single NATO nation, apart from the US, can readily field an army division.

Germany’s defence spending has dropped by more than half since Helmut Kohl’s chancellery.

The UK spends 2.1% of its GDP on defence, compared to 5.5% at the height of the Reagan-Brezhnev cold war. Russia spends 4.3% and has spent more than a decade dramatically upgrading its military. That money has been spent on training and organisation and high-level weapons such as the S-400 BUK air defence systems, hypersonic missiles and next-generation tanks.

The US, meanwhile, has run a merry dance with a series of failed or questionable weapons programmes: the Littoral Combat Ship has literally run aground. The F-35 programme is so expensive, the US Air Force is reducing its numbers. American military procurement is stuck with slow-moving Cold-War-era processes, congressional pork and a long-standing love of the lumbering and big. These old school, massive weapons programmes won’t be the way forward in keeping up with streamlined tech advancements across the global stage.

On the other hand, disinformation and cyberspace require huge investments in tools of monitoring, awareness, offence and defence. But when influence ops and cyber attacks have run their course, war is feral and marked by “the blood and shit spray.” Kinetic weapons, heavy iron, projectiles, explosives, swarms are needed to complement the weightless tools of cyber and disinfo.

Investment in defence will surely increase, and sensible governments will be looking at what new technologies will afford them. This may mean better tools to understand an increasingly complex battlespace. Or it may involve thinking about the asymmetric capabilities of cheap low-cost drones, taking a lesson from Turkey’s increasingly strong “low-cost” drone industry.

Such investments could trigger explorations in advanced technologies: new materials, new sensors, processing and computing architectures. In time, this might deliver the swords-to-ploughshares benefits (think nuclear fission or the GPS system) as well as exceptionally strong technical talent (look at Israeli’s successful high-tech industry.)

Venture capitalists (and founders) may start to focus slightly more on solving deeper, hard problems with science, rather than the quick fixes of ever-increasing convenience for the well-heeled urbanite. (Of course, I say this as investors pour $700m into Gorillas, an app that exists to help people who regularly mismanage their weekly food shop.)

An accelerator and a phase change

This crisis will be an accelerator of change. It will drive investments in advanced technologies, which in turn will drive investments in the decarbonisation of industry. The clear importance of resilient systems (as well as collective design) will align these investments to the changes needed for the Exponential Age (see Chapter 9 of my book).

Out of the other end will come a new geopolitical order. Sides will be taken because we will be unable to rely (as strongly) on the web of economic relationships to keep the peace. Thirty years ago, Zbigniew Brzezinski cautioned on what might be needed in the aftermath of the Cold War:

[The] essence is to make certain that the disintegration of the Soviet Union becomes the peaceful and enduring end of the Russian empire, and that the collapse of communism truly means the end of the utopian phase in modern political history. But these grand goals will come to pass only if the West again demonstrates strategic staying power, focused on clearheaded geopolitical—and not just on narrow socioeconomic or vaguely idealistic—aims.

His warning was prescient. Perhaps the starry-eyed, lackadaisical rhythm of the past thirty years has come back to bite us. But perhaps we will be able to look at these horrible, painful moments as part of the adjustment process to a new, more sustainable norm.


Other commentary you might find interesting::

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Today’s edition is supported by our knowledge partner, McKinsey & Company.

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