Technology and Geopolitics: The Advent of a Third Cold War?

Growing up in the ’80s and 90’s I was able to witness the end of the second cold war, with the fall of the Berlin wall in 1989 and the eventual end to the communist party in 1991.  I remember watching movies like Atomic Cafe, and being chilled by the Cuban missile crisis, arguably the closest the Cold War came to escalating into a full-scale nuclear war.  It was also the time when technology and geopolitics went hand-in-hand.

Yet with all this terror, we also saw amazing advances in space as the superpowers vied to get into space, with the US eventually getting to the moon and the USSR never making it. We also saw amazing developments of technology with incredible leaps in CPUs, operating systems, and ARPANET, or as we know it today, the Internet.

After the Cold War

Since the Cold Wars ended, we have never been back to the moon and the space shuttle has been decommissioned. We relaxed, as the need just wasn’t there any longer to push ourselves unless there was money to be made. Once again, however, we are seeing a resurgence of the geopolitical cat and mouse enabled by technology, with reports of Russian intervention in the 2016 US Presidential election and hacks of Microsoft, and large government corporations.  It wouldn’t be hard to conclude that the world is entering a new phase of cold war politics, as it once again jostles over ideology: Western vs authoritarian regimes, such as Russia and China.

So, how will this play out outside of situation rooms?

The first and perhaps most significant way will likely be quantum computing. We have been trying to crack this for a number of years with firms like Google, Microsoft, IBM, and Amazon leading the charge for the US, and Alibaba and Baidu for the Chinese. The significance here is in large complex tasks such as cracking a 256k encryption, which is used for banking, government agencies, etc. In other words, whoever gets it first would almost have free range through the other’s networks, completely exposing their opponent. Really quite scary when you think about it but once there the other applications to us via space travel calculations and medical research would be incredible. 

The second and more obvious aspect that will come into play will be the acceleration of the next phase of the space race.  With the moon landing having taken place nearly 50 years ago and little appetite to return, we are likely to see the US quickly re-establish the push onto Mars. This time around, however, it will be private enterprises, rather than governments, leading the way, as they have done so well in the US in recent times. 

The Present and the Future

Already we are seeing reusable rockets and cheaper, easier ways to get into space, as Virgin Galactic and Space X have demonstrated. I envisage a scenario much like the old British empire, where companies like the East Indian Company and Hudson Bay Company established new territories on behalf of England, only this time it will be Mars. My bet is we will see a city on Mars named after Musk, which will make sense if we think about it. The fortunes to come with it are also worth the risk for those willing to take it.

The real risk will be in how technological advances impact the geopolitical status quo, and whether we will see a fresh era of arms racing, facilitated by tech giants, and driven by defense contractors. Technology and geopolitics repeating.

From the space perspective, it’s very hard to look past Space X, however, it’s not publically listed and honestly, I just don’t believe that Virgin Galactic will make massive numbers like an airline or anything we see today.  Should Space X ever release an IPO, I will be first in line to buy, as that company will achieve amazing things in the years to come, almost certainly leading the way in space travel. 

In the meantime, options such as Raytheon who develop missile systems for the US defense department and perhaps Boeing, who has an amazing amount of intellectual property, will bounce on the back of their defense capabilities. 

31st January 2021

At the time of writing this article, the following companies had the following price:-

Microsoft – $231.96

Alphabet – $1,827.36

Raytheon – $66.73

Boeing – $194.19

Virgin Galactic – $44.29

IBM – $119.11

Amazon – $3,206.20