The digital economy and the risks of digital colonization

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

Detailed theses of speech at the Parliamentary hearings in the State Duma by Natalya Kasperskaya, member of the Expert Council on domestic software, head of the Working Group of the Digital Economy Program in the direction of Information Security.

All of us in the last 2-3 years have been literally flooded with the stream of the latest technologies from the pages of the media. We constantly hear the following phrases already familiar to the teeth: “new technological order”, “industry four zero”, “new technologies will change the world”, “attention economy”, “exchange economy”, “elimination of intermediaries”, etc. They are accompanied by articles, reports and news about technological breakthroughs that will "change the world", such as:

• Artificial intelligence (hereinafter - AI)

• Big data

• Blockchain

• Cryptocurrencies

• Unmanned vehicles

• Internet of Things

• Telemedicine

• Messengers

• Virtual reality

• Uberisolation

Etc.

What's wrong with this race for the latest innovations?

Alien quest

The goals of the "progress" are invented and the "quest tips" are laid out by someone else, not us. Two or three years ago, no one knew that blockchain or artificial intelligence is our everything, that this is the only possible future (then, if you remember, everyone prayed for "startups").

And now it is as obvious as the fact that the earth is in the shape of a ball and revolves around the sun. Where did it come from? We, in Russia, certainly did not introduce this into the discourse and did not include it in the plans for the development of the economy. Then who?

"Evangelists of novelties" inspire them with inspiration. A lot of people suddenly appeared in the media space (very often - humanitarians, journalists, bankers), who suddenly turned out to be singers and connoisseurs of new technologies.

People who have never written a single line of code in their lives and who "own the technology" at the call level " Ubera "and writing posts from a smartphone to a fashionable messenger, suddenly became connoisseurs and teach progress to all of us -" retrogrades "and" conservatives ".

And many responsible people, as they say, “fall for” this media pressure.

The hype in the press makes it difficult to soberly assess the benefits of technology. Many people are extremely media addicted. This also applies to deputies, officials, and managers of big business. All newspapers and social networks cannot be mistaken that everything needs to be done on the blockchain for everyone's happiness! And now important meetings are being convened, plans are being drawn up for the regions to introduce the latest trends, etc.

At the same time, the hysteria of the departing train is whipped up: everything is already there, alone we are late.

The feeling is specially created that the main thing is not to be late. Officials and legislators are openly “pressed” to pass laws and introduce the latest technologies as soon as possible. Because supposedly everything was gone differently, there were literally only a few weeks left.

This unnatural haste and media "pumping" blows unnecessary thoughts out of their heads, does not give time to think and soberly assess the need for new things and risks.

The risks of new technology are deliberately hushed up or not discussed. A fairly large layer of already known problems and risks associated with cryptocurrencies, AI, blockchain, the Internet of Things simply does not receive the press, is not discussed on specialized platforms and in the State Duma. Only glittering prospects are discussed.

As a result, there is a massive thoughtless borrowing of someone else's, dangerous and unnecessary. The usual linked list, suitable only for very formal and narrow applications (I mean blockchain), suddenly turns out to be applicable anywhere - notary, medicine, elections, public procurement, land registry, public administration. Artificial intelligence, it turns out, needs to be entrusted as quickly as possible with anything, including areas of high human responsibility: security, transport, medicine and courts.

Opportunities and risks

I have been engaged in information security for a quarter of a century. Now I am the head of the Working Group of the Digital Economy Program in the area of Information Security.

Information security, first of all, studies technological risks, as well as the methods of people who are trying to take advantage of the vulnerabilities and illegal opportunities of new technologies - and, finally, the methods by which these people and these risks can be resisted.

Therefore, I look at the next wave of "new technologies" (already the fourth in my memory since the early 1990s) from the point of view of the associated risks.

Yes, new opportunities are good. But, as in real life, each opportunity always has a corresponding risk:

As you can see, there are enough risks at least to first think about the strategy and the need for a particular technology.

Why you shouldn't jump into the new technology race right away

Someone else's agenda: ends and means are imposed on us. In essence, we are dealing with classic false dilemmas. We should have asked not the question “how to quickly introduce the blockchain into the national economy”, but the question: “what problems and tasks are in our national economy, can they be solved by means of IT and what exactly”, and only then “will it help Is there something about blockchain here?"

And they impose on us, including from the highest tribunes, precisely the first, false task.

We are always in the position of catching up. If we constantly ask ourselves the question “how to quickly introduce another Western technology” (and not the question of what tasks we have and how to solve them), then we will always be in the position of a catch-up, secondary player. And we will always borrow someone else's - because it is already ready.

That is, instead of producers, we will be consumers of other people's technologies. And the point here is not only that we will pay more and more for someone else's - we will become more and more dependent.

Deepening the dependency: the digital economy will develop, but will not belong to us. We are already seeing examples of how our economy, hooked on the technologies of previous digital races - technologies from Microsoft, Oracle, Siemens - is suddenly very dependent and vulnerable in a new era of deteriorating relations with the United States.

As soon as the Americans are ordered, large, beautiful, public Western companies, which we believed like ourselves, stop issuing updates to our corporations, turn off credit cards for our banks, refuse to work in Crimea, etc.

New technologies without proper hygiene will increase remote control and management. It should be understood that all modern Internet services, smartphones, tablets, fitness bracelets, TVs, cars, airplanes, production controls, rolling mills, CNC machines and oil production complexes are constantly connected to the Internet, download updates and are controlled from the outside. If these are American and European technologies, then they are controlled from the USA and Europe.

And after stories with the refusal of foreign manufacturers to support the products they have sold, we can no longer believe that "a public company will never, ever turn off the service, because it cares about customers." A public company will do as the government of its country requires.

The main IT income goes abroad. You need to understand that without exception, all products and services in the field of information technology are switching to the subscription model: even if you bought a car, TV, smartphone, you actually paid only the initial amount for the installation - and then you will continue to pay for a subscription to updates, software, consumables, etc.

And this money practically does not remain in the country (with the exception of relatively small expenses for sales and support services).

A new stage in digital colonization. We are already extremely dependent on Windows, MS Office, Oracle, SAP, Facebook, Google. And if we build a new economy on foreign cryptocurrencies, if our production and transport will be controlled by AI developed by Google or Microsoft, if we give big data about our economy, our nuclear power plants and factories, citizens and government institutions to Western players - we will finally become a Digital Colony of the USA …

Is there a risk of being late?

We have become accustomed to the technology race since the days of the race between the USSR and the USA. Since those times, we remember that in military technology one cannot be late. It was the nuclear race of 1950-1980 that gave modern Russia the nuclear shield that still allows us to be independent.

But what about commercial technology? Do we need to be "on a par" and with whom exactly? Actually, perhaps not everyone knows this, that in the field of IT we are in many ways ahead of many, including the "developed" states of Europe and America.

For example, in the field of broadband Internet access, in the field of payment for services from smartphones, in the field of mobile communications. In the 90s, we skipped quite a few "small" technological structures - for example, faxes, pagers, answering machines, which are still in use in the USA and Europe. And our Internet services (search engines, public mail, Internet media, social networks) are not worse than American ones and much better than European and Asian ones.

This is no accident. In fact, not all technologies that are now "heard" will be spread and become generally accepted in the future.

This is how almost any new technology in the field of IT develops, according to the "hype curve" from the well-known analytical company Gartner:

First, the new technology causes a peak in media hype, hype, and promotion. This is what I said at the beginning. This peak usually takes 2-3 years.

It is at the peak that the wrong decisions are made and a lot of money is spent.

Then comes disappointment in the new product, the bubble bursts, and attention to the new product drops to almost zero. At this moment, most of the companies and investors who believe in the new product go bankrupt.

Then the IT industry rethinks the new product, looking for its pragmatic applications, new companies begin to build real, useful services and products on the new product.

The novelty is reaching a “productivity plateau” no longer in the format of a media bait of fashionable technology, but in the format of a product. And he begins to improve life and make money. Reaching a plateau is the best moment for borrowing or introducing a novelty in companies or government agencies.

Unfortunately, with regard to most of the "latest innovations" that we are talking about now and which are considered the basis of the future Digital Economy, we can say that we are at the very peak of the hype. That is, in a “bubble”. This can be seen with the naked eye.

This means that most of the money invested now in new products will be wasted, most of the founded companies and started projects will go bankrupt, and the players of the second wave will be the winners.

We remember well the dot-com bubble, the mobile content boom, the social media boom, and other classic examples of new products moving along the Gartner Curve. But the industry, investors and even government officials somehow do not learn anything from this experience. And experience says the following:

It is especially impossible to be late anywhere. The average time for new products to reach the productivity plateau is 4-6, sometimes 7-10 years. For example, over the 10 years of the existence of blockchain technology, it has not been possible to create any effective applications of it, except for the initial one (cryptocurrencies).

- Some of the new products will not take off at all (how 3D television and virtual reality, for example, did not take off);

- It is necessary to chase not after "technology", but after the product. "Naked" technology cannot be applied in a company or a state corporation, unless only in order to report to the authorities that management is following fashion trends;

- More often than not, cautious pragmatists win, who introduce technologies from second wave players, already tested and developed - and implement them not because of fashion, but understanding the specific benefits of implementation. The above-mentioned example of how the Russian Federation in mobile communications immediately jumped to the GSM standard, bypassing those freaks who are still in use in the USA and Europe, is appropriate here.

What to do? Do not succumb to the magic of technology

In the face of widespread media panic and even hysteria about the latest technology, it is important to remain sober and calm. You need to remember the following rules:

• Go not for hype, but on the real needs of society, business and the state

• Go not from a fashionable "technology", but from a product, to introduce not "technologies", but means of increasing productivity, transparency of management.

• Do not rush to implement anything at the peak of popularity and fashion, but wait for a "performance plateau" for new products and platforms.

• Remember digital sovereignty as a prerequisite for the introduction of any technology.

Develop your

We have set the task of import substitution in the field of IT. Ideally, it could look like this:

In this ideal case, from dependence in the region of 90%, we could reduce our dependence on technological imports to 10-20% by 2024, which is quite tolerable.

However, due to the fact that in fact there is a constant emergence of new technologies, the real picture of their development will be as follows:

New technologies are replacing old ones, and since due to haste and fashion, mainly Western novelties are introduced, dependence only grows, turning the Russian Federation into a digital colony of the United States.

In fact, the correct scenario for introducing the latest technology should be like this:

If new technologies are predominantly domestic, then by 2024 we will get that very independence by 80-90%.

I am personally a member of the Expert Council for Domestic Software. Over the past 2, 5 years of work, I became convinced that in our country there is a huge number of interesting software products - talented, relevant.

The register of domestic software already contains more than 4,000 thousand domestic software products covering the entire spectrum, the entire technological line, or, as programmers like to say, "the entire stack of technologies": operating systems for servers, computers and smartphones, office applications, graphic editors, systems automatic design, automated process control systems, information security tools, games, search engines, etc.

This means that we can develop certain fashionable new technologies almost entirely on our own:

• Big data: this is a very sensitive area that creates many risks of violation of the rights of citizens to protect their privacy, risks of surveillance by global companies and special services of foreign states; therefore, we only need to use our own products, we have an excellent scientific base; at the same time, it is necessary to legally ensure the limitation of the turnover of large user data and personal data of citizens of the Russian Federation for foreign companies (use and store them only on the territory of the Russian Federation, according to the regulations approved in the Russian Federation).

• Artificial Intelligence: we have a powerful scientific school in the field of AI, many developers and scientists, a large number of small and large companies in this area; we can and should use only our technologies and products, order AI developments to domestic universities and companies.

• Internet of Things, Industrial Internet, RFID tags: we have our own developers, associations in this area, we develop our own protocols and standards; this is an extremely sensitive and dangerous area, so we definitely need to use our regulations, protocols and technologies, stop thoughtless infiltration and diffusion of other people's devices connected to the Internet into the country, we need to check and “sterilize” imported devices and IoT technologies.

• Blockchain: here the Russians have one of the leading positions in the world; we need to seriously study the applicability of this technology in the field of finance and public administration, use only domestic registries based on the ideology of the blockchain, with Russian cryptography, no global registries with external control should be introduced.

• Cryptocurrencies: this is a sphere that seriously threatens the economic sovereignty of the Russian Federation, which has a great criminal potential, so extreme caution is needed here. We cannot allow the circulation of foreign currencies in the Russian Federation with uncontrolled emission, turnover and exchange rate. There are many specialists and solutions for fintech and cryptocurrencies in the Russian Federation, we need to create our own currencies and exchanges, gateways to the external market.

Of course, the development of the Digital Economy and the minimization of risks for citizens, society and the state require serious legislative work.

Legislation and enforcement

There is another important aspect of the development of new technologies in order to prevent or minimize possible risks. These are regulatory and legal restrictions. Here, in my opinion, we need to consider the following:

• Proactive legislation. We need legislation to anticipate problems and risks. Whatever happens, as with the Internet, the spread of which, the risks and impact on the lives of hundreds of millions of people, lawmakers all over the world realized 10-15 years later, thought about it in hindsight.

• "Sandboxes". To launch new technologies, we need a kind of "legislative sandbox", industries or regions where the development of new technologies is allowed without immediate legal responsibility, but under the close supervision of regulators. This is necessary for unmanned vehicles, fintech, and big data analysis.

• Fast response and setup. We need a quick feedback procedure, when problems and risks arising in the field of new technologies lead to rapid changes in legislation, to constant fine-tuning of regulation.

• Support for import substitution and digital sovereignty. Our IT legislation must finally become nationally oriented. We need to cast aside sentimentality and impose direct restrictions on competition for foreigners in the IT field. As a rule, foreign manufacturers are now in a better position than domestic ones. For example, Western Internet giants like Twitter and Facebook do not conduct any official activity here, do not have legal entities or representative offices - and at the same time, they make money from our audience and conduct political propaganda.

• Protection of citizens and privacy. We need a direct ban on pumping big data about our citizens, society, economy and state abroad.