Technology Rents and the New Great Game

Abstract

The global economic and political order is being reshaped by a perfect storm of frictions. Chief among them is the deterioration of relations between the great economic powers of the day, the United States, China and the European Union. This paper argues that only technological developments establish a sufficiently valuable bone of contention to explain the scale, the timing and the contours of the conflict. The issues run deep and are pervasive, reflecting the transition to a data-driven economy built on the nexus of artificial intelligence, machine learning, and big data. The contest to command these new technology heights explains the new Great Game that is unfolding, featuring the deployment of the full range of strategic trade and investment policies, geo-economic tools, and geopolitical maneuvering. The necessary response is to reform the multilateral trade and investment framework to constrain the strategic behavior induced by the emerging data-driven economy and to channel the rivalry into constructive technological competition – for all parties, including the small, open economies that find themselves caught in the crossfire.

Keywords: trade wars, data-driven economy, big data, artificial intelligence, machine learning, strategic trade policy, geo-economics, geopolitics

JEL Classification: F13, F15, F51, F55, K21, K24