By Hermann Hauser & Hazem Danny Nakib
In 1853, under orders from President Millard Fillmore, US Navy Commodore Matthew Perry led four warships on a mission to persuade Japan to end its 200-year-old isolationist policy. When he arrived at what is now Tokyo Bay, Perry delivered an ultimatum to the Tokugawa shogunate: open up to trade with the United States or face the consequences.
The arrival of these “black ships” (so named for the dark smoke emitted by their coal-fueled steam engines) was a pivotal moment. Confronted with this impressive display of technological prowess – which exemplified the industrial power that had already enabled the British Empire to dominate much of the world – the shogunate reluctantly agreed to Perry’s demands, leading to the signing of the Treaty of Kanagawa in 1854. One year later, the shogunate received its first steam-engine-powered warship from the Dutch as a token of appreciation.
While technology can pose a threat, it also powers critical infrastructure like schools and hospitals. Over the past century, in particular, the sovereign individual has become inextricably linked to a vast array of technologies, including interconnected systems like energy grids, the internet, mobile phones, and now artificial-intelligence chatbots.
As the Perry expedition showed, technology is also the backbone of state military sovereignty. Thanks to its technological dominance, the US has become the world’s leading military power, with more than 750 bases in 80 countries – three times as many as all other countries combined.
But this picture of state sovereignty is rapidly changing. While America’s financial sovereignty, underpinned by the dollar’s status as a global reserve currency, remains intact, its economic sovereignty is increasingly challenged by a rising China. In purchasing-power-parity terms, China surpassed the US to become the world’s largest economy in 2014. With manufacturing output roughly equal to the US and the European Union combined, China is the top trading partner of more than 120 countries.
Both superpowers are currently competing to control the design, development, and production of critical technologies such as semiconductors, AI, synthetic biology, quantum computing, and blockchain. A 2023 study commissioned by the US State Department, which tracks research contributions across 64 emerging technologies, showed that China is leading the US in more than 80% of these areas, with the US a close second.
As the US-China rivalry escalates in the technological arena, countries around the world will be forced to pick a side and adopt their chosen ally’s distinct technologies, standards, values, and supply chains. This could usher in a new era of technological colonialism, undermining global stability.
Curiously, however, neither the US nor China have been able to dominate the semiconductor industry, since Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung in South Korea are the only manufacturers capable of producing semiconductors smaller than five nanometers. To change this, both superpowers are constructing what we call “technology sovereignty circles” – spheres of influence that other countries must join to access these critical technologies.
Unlike the colonialism of old, techno-colonialism is not about seizing territory but about controlling the technologies that underpin the world economy and our daily lives. To achieve this, the US and China are increasingly onshoring the most innovative and complex segments of global supply chains, thereby creating strategic chokepoints.
China, for example, has gained control of supply chains for critical raw materials, enabling it to become the world’s leading producer of electric vehicles. Meanwhile, the US leads in chip-design software thanks to companies like Cadence Design Systems and Synopsys.
Europe, too, is keen to establish itself as a key player in this rapidly evolving sector. Beyond hosting the Dutch company ASML, which produces extreme ultraviolet lithography systems crucial for advanced-chip manufacturing, the European Union is a net importer of AI research talent. It is also home to more STEM students and computer scientists and creates more startups than the US.
When onshoring proves impossible, technology sovereignty circles act as another, subtler form of coercion. By cultivating deeply entrenched asymmetric dependencies, they effectively push countries into techno-economic servitude.
The United Kingdom is a prime example. In 2020, the US forced the UK to exclude Chinese technology firm Huawei from its 5G network, threatening to cut off access to America’s intelligence apparatus and chip-design software. Similarly, the Netherlands was pressured to stop supplying China with ASML machinery in early January. In response, China has tightened its grip on critical materials by restricting exports of gallium and germanium, key inputs for microchips and solar panels.
Every country could soon face its own black-ship moment. Those without the protection provided by ownership of critical technologies risk becoming techno-colonies, serving the needs of their technological sovereigns by manufacturing simple electronics, refining rare metals, labeling data sets, or hosting cloud services – from physical mines to data mines. Countries that fail to align with either the US or China will find themselves relegated to the status of impoverished technological backwaters.
Amid heightened geopolitical tensions, emerging technologies such as quantum computing, AI, blockchain, and synthetic biology promise to push the boundaries of human discovery. As we explain in our forthcoming book, The Team of 8 Billion, the key question is whether these technological innovations will be controlled by a select few as instruments of subjugation or democratized to foster shared prosperity.
Instead of ushering in an era of destructive techno-colonialism, these new technologies could help revitalize our rules-based international order and upgrade collective governance.
But to achieve this, we must replace today’s black ships with something humanity has yet to invent: a framework for planetary cooperation based on a unified substrate of human interests. Such a framework must reflect our growing interconnectedness and technological dependencies, as well as the ever-global challenges we face, from war and nuclear proliferation to pandemics and climate change.
Techno-colonialism represents the latest iteration of the age-old struggle for global dominance. Will we become the architects of our own doom, or the champions of a brighter future? For better or worse, the answer is in our hands.
Hermann Hauser, Co-Founder of Amadeus Capital Partners, is a member of the European Innovation Council. Hazem Danny Nakib is a member of the British Standards Institution’s Digital Strategic Advisory Group and an honorary senior researcher at University College London.
Copyright: Project Syndicate, 2024.
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