Intelligent machines create the new hegemony

China and America reap the AI dividend

In the last 15 years, we have witnessed the stunning rise of an exponential technology – machine learning and artificial intelligence. Like Moore’s Law on steroids, smart machines and computer systems have created entirely new global industries, turbo-boosted productivity, and destroyed old, industrial age business sectors.

The Economist, now a purely digital research and analysis house, estimates the ‘new value’ created by this phenomenon at over US$ 19 trillion globally. But a full 70% of this windfall has landed on the United States and China, who have dominated the tech scene, almost to the exclusion of other nations.

Despite the fact that the ‘nation state’ is an almost anachronistic concept in the 2030s, both China and the USA have stubbornly clung to their historically strong ideology of building their own economic empires first, and dispensing largesse to the rest of the world later. It’s in their nature.

Other developing nations have sought to innovate and grow on the coat tails of these two giants, and some have succeeded; but many are dependent on the markets and investments they provide, and are forced further down the value chain, almost like vassal states.

Industrial powers like Germany and France have used regional integration to hang onto some semblance of importance in this new world order, but factory work, such as it is, has drifted to India – the world’s sweatshop, with the biggest pool of workers.

Like two gorillas in the same territory, China and America maintain an uneasy alliance. Each is waiting for the other’s first misstep; in the meantime, the dual hegemony is benefitting both.

Warning: Hazardous thinking at work

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