Emerging and critical technologies: Investment, protection and regulation

Dr Renata Dwan

Good afternoon and I’m delighted to welcome you all to Chatham House this afternoon on this rainy London day. My name is Renata Dwan. I’m Deputy Director here at Chatham House. Our webinar today is covering the critical topic of how and where and when we can think about investing in, protecting and regulating emerging and critical technologies and how we get the balance between navigating innovation, but also ensuring the protection of our intellectual, our security and our economic investments and properties and goods.

This is going to be a two-part discussion. It is on the record and will be recorded. So, we very much welcome you today, to all of you, and welcome your active participation. We’re going to start our discussion today with some opening remarks by the Right Honourable Kwasi Kwarteng, the Secretary of State for Business, Energy and Industrial Strategy for the United Kingdom’s Government, Ambassa – or Secretary of State Kwarteng leads on the questions of innovation and R&D here in the UK. It’s our pleasure to have you here with us today…

Rt Hon Kwasi Kwarteng MP

Thank you.

Dr Renata Dwan

…Minister. I’m going to give you the floor straightaway to make some brief welcoming remarks and then you’ve kindly agreed that you will take a question or two before we…

Rt Hon Kwasi Kwarteng MP

That’s right.

Dr Renata Dwan

…open it to our wider panel. So, can I…

Rt Hon Kwasi Kwarteng MP

That’s right.

Dr Renata Dwan

…just ask colleagues, and those of you joining us today, please put your questions to the Secretary of State in the Q&A and I will read some out in the brief moments after his opening remarks. We will then move onto the regular panel discussion. Minister of State, the floor is yours. Welcome to Chatham House.

Rt Hon Kwasi Kwarteng MP

Thank you very much, and I’m always very happy to come to Chatham House. I think you do, even if only virtually, I think you do a fantastic job in bringing together thought leaders, businesspeople, academics and Politicians to discuss matters of really very considerable importance.

In respect of emerging technologies, you will appreciate and you alluded to the fact that my role as Secretary of State in to BEIS is very much the centre involved in government with R&D, with science, with issues relating to national resilience and all of these issues touch very directly with the subject that you’re discussing this afternoon.

So, what I thought I would do in the – in – very briefly, is to point to four or five things that we’ve been doing this year that really, I think, mark a change, a slight intensification of focus on critical technologies, on geopolitics, if you like, and also on issues relating to national resilience and climate change. So, one of the things that happened this year was – has been the publication of The Integrated Review. I think that’s a very good piece of work and that really puts science and technology at the centre of a geopolitical offer. And the science and technology that we focus on is very apposite, given the success we’ve had in the vaccine rollout. So, people around the world can see that science and innovation is something that we take very seriously, indeed.

Alongside the global – The Integrated Review, we’ve also got the ARIA bill that’s going through Parliament and passed the third reading in the House of Commons only a couple of weeks ago. And ARIA sets up an R&D funding body which is unlike any other thing that we’ve had here in the UK and is very much like DARPA in the US. ARIA itself stands for Advanced Research Invention – and Invention Agency and its purpose is, really, to emphasise, you know, risk – a more risk-taking approach to innovation, more high risk/high reward, in terms of its conception.

The other thing that we’re coming up with this summer is the Innovation Strategy. It’s the first time that we’ve really had a clear steer from government as to the kinds of innovation we want to promote, we want to see in the UK and we have, you know, some very interesting thoughts about the kinds of sectors that we want to see innovation in. Today, we announced the Chief, sort of, Technology Officer, essentially, Sir Patrick Vallance, will be heading a team, an Office of Technology within government, that will be co-ordinating policy and science across the UK, across the UK Government, across Whitehall. We’ve also passed, just earlier this year, the National Security Investment Act, which is all about securing IP and protecting key UK intellectual property, key UK strategic intellectual assets, if I can put it that way, to – you know, so that they can’t be simply taken over by people, actors, who may wish to do us harm. So – and that’s just in the last six months.

So, we’ve got The Integrated Review being published, we’ve got an innovation strategy being published in the next month or two. We’ve got a – the ARIA bill, which has passed its third reading just two weeks ago. We have Patrick Vallance being appointed as Chair of this Office of Technology within the government, and, also, we’ve had the passage and the successful completion of the National Security Investment Act.

In conclusion, I would say that, you know, when I look back, certainly at the time when I was elected, in 2010, we’ve really moved a long way into thinking about national resilience, security, geopolitical threats. I think the laissez faire world of the late 90s, perhaps, and the early parts of this century, it has morphed into one where we are much more strategically conscious of threats, of competition, and we’re very aware of national resilience. I mean, this phrase has been used a great deal during the COVID crisis and I think it really, I mean, and this is your job, I suppose, it really does pose wider questions about, you know, the international order and how best to safeguard the, kind of, liberal democracy that we all cherish.

So, those are the brief remarks. I hope I can do one question and afraid I’ll have to leave quite soon, but I think it’s a fascinating subject. It couldn’t be more – of greater importance to the world today and I’m very pleased and grateful that you’ve invited me to address you, albeit briefly, this afternoon.

Dr Renata Dwan

Thank you so much, Minister Kwarteng. Thanks for those opening remarks and for outlining the sheer scale of activity and energy that the UK is putting into developing its – and its cutting-edge innovation. Maybe I’ll just ask you one question. The balance between countries exploring their – and advancing opportunities with innovation, while at the same time, thinking about the protection of their IP and intellectual assets, as you described it, presents some challenges for two communities in particular, two groups of stakeholders, for tran – large corporations that are seeking to be global actors and engage in a whole set of technology, investments, and for export and production around the world. So, how – I would like to ask, how are you seeing, how does the UK Government see that dialogue with private sector companies, both UK, but non-UK, who are seeking to operate globally, but at the same time, work within the regulatory frameworks that are being developed around the world?

Rt Hon Kwasi Kwarteng MP

I think it’s a great question. I think there is a, clearly, a tension between the ability, or rather, there’s a balance to be struck between the ability of a nation, a country, to protect its intellectual property, to protect key assets, and, also, to function and promote, you know, an international system of trade and mutual exchange of ideas and goods and capital. I mean, these – this is – there’s a balance to be struck here and I think we’ve done that through the National Security and Investment Act. But, you know, I remember through the passage of that bill, there was lots of people saying, you know, that we were perhaps inhibiting the acquisition of assets. We were somehow, you know, frustrating the free flow of capital. It was described, wrongly in my view, as a kind of, an anti-competition, anti-free market measure, and as I’ve said, I think that you have to strike a balance between the two. I don’t think you can have, in this day and age, a fully, you know, laissez faire system. But at the same time, you know, we understand, we all understand the benefits of laissez faire free market of enter – entrepreneurship and we want to promote that, while also being able to safeguard national resilience, for want of a better phrase.

Dr Renata Dwan

Thanks very much, Secretary of State, and as a good Historian, you of course, recognise that passage, that historical passage of laissez faire, from sometimes very much involved, to this newer space, where we’re trying to consider…

Rt Hon Kwasi Kwarteng MP

Yeah, I mean, laissez faire…

Dr Renata Dwan

…the greater good.

Rt Hon Kwasi Kwarteng MP

…has meant all sorts of things over the years and, you know, from an absolute – you know, crudely, from an absolute laissez faire position that people adopted in the 19th Century, you know, we’ve morphed and emerged, you know, there have been different ways of tweaking it. I mean, the whole welfare state, ultimately, was a kind of, gloss on laissez faire. Well, it was something that wasn’t prescribed by the – those old laissez faire Economists.

I think today the situation is much more – you know, there’s a national security angle, you know, national…

Dr Renata Dwan

Yeah, absolutely.

Rt Hon Kwasi Kwarteng MP

…resilience angle, which is also providing a gloss, or an interpretation, mutation of, you know, classic laissez faire policy.

Dr Renata Dwan

Absolutely.

Rt Hon Kwasi Kwarteng MP

But that doesn’t – yeah, but that doesn’t mean that we’ve moved away from some of the principles of the free market. This just means we’ve modified it into something…

Dr Renata Dwan

Well, if I could just ask you a very final one minute, one question we did receive from Paul Slattery for you, which it says this, that “Half of the UK population are employed in service business and experience businesses. Do you think you have a laissez faire position towards them?”

Rt Hon Kwasi Kwarteng MP

I think that, clearly, certain businesses are deemed to be more strategic, in terms of the security than others. I think there are ser – some service – there are businesses, which are strategically important. But I’m very keen to stress that, you know, if we’re protecting certain assets, certain types of intellectual property, that doesn’t mean that we have a protectionist view across the whole of the economy. There are plenty of – and it would be invidious to pick out which sectors are, and it actually wouldn’t be in our interests to say which sectors we think are particularly strategic and which ones aren’t. Though, clearly, there are some sectors that are more strategic than others and I think many service sectors, industry sector businesses probably have less of a chance of being protected in the – via legislation, such as the National Security Investment Bill, the acts, than others.

Dr Renata Dwan

Secretary of State…

Rt Hon Kwasi Kwarteng MP

Thank you. Thank you.

Dr Renata Dwan

…just even in these few moments, you’ve shown us just how important these topics are, how many…

Rt Hon Kwasi Kwarteng MP

Very important.

Dr Renata Dwan

…nuances…

Rt Hon Kwasi Kwarteng MP

Very important.

Dr Renata Dwan

…in the issues. So, I’d like…

Rt Hon Kwasi Kwarteng MP

And I’m very happy.

Dr Renata Dwan

…to thank you.

Rt Hon Kwasi Kwarteng MP

I’m very happy to…

Dr Renata Dwan

We’d like to thank you.

Rt Hon Kwasi Kwarteng MP

I’d be very happy to come again, but I’m sorry that we were more time constrained today.

Dr Renata Dwan

Not at all and thanks very much for your time.

Rt Hon Kwasi Kwarteng MP

Thank you, bye.

Dr Renata Dwan

We’d like to say a big farewell to the Secretary of State now, Minister Kwasi Kwarteng, and move straight onto our panel. So, we welcome very warmly to our three panellists today. We’re joined first by Jasper Helder, who is an International Lawyer focusing on trade and compliance issues, with the Akin Group, the Akin, Gump, Strauss, Hauer and Feld Partnership, so very much our partners for today. So, welcome to you, Jasper. We’re also – joining us from the United States is Zoe Weinberg. She is a Fellow at Schmidt Futures, focused on geopolitics and technology and leads tech design – comes from a tech design incubator background with – as well as an artificial intelligence with the National Security Commission and Google AI. So, welcome, Zoe, delighted to have you here. Last, but by certainly no means least, Dr Patricia Lewis is our in-house security guru and leads our Programme on International Security at Chatham House, with particular focus on new technology. So, delighted to have you, all three, here today with us.

You know, we heard a little bit about – from Minister Kwarteng, about the importance that governments are assigning to a new activism to encourage research and development, to encourage innovation, and the geopolitical perspective that there – with which they’re approaching such engagement. But of course, there is also the question of how you regulate and create the space for innovation in – given the pace of technology and how difficult it is for regulation to keep up with that technology. But also how you think about protecting assets and investments in that fastmoving space, fastmoving at the political level and fastmoving at the technology place.

So, it’d be great to hear from you three about different countries and different regions and how they’re trying to grapple with the evolving regulatory framework and picture and what are some of the implications of that, for the individuals, for the private sector, for engagement, at the broader geopolitical level? So, I’m going to start with you, if I can, Jasper. I mean, looking at, a little bit, about the EU in this space, can you share with us where you see some of the trends in EU technology regulation and the potential that has to impede, or to facilitate, investment and technology development, more broadly?

Jasper Helder

Sure. Thank you, Renata. I mean, with Europe, first of all, Europe is, of course, not a federation. It’s 27 countries that have created an internal market and of course, eternal market regulation means regulating technology substantively, as we are seeing from a competition perspective recently with the new European regulation on artificial intelligence. And then, as the Secretary of State said, there’s this national security element that creeps into it, because all of these emerging technologies are strategically relevant. And I think that is where the internal market splinters, because national security is not part of the authority of the European institutions. It’s national security, it’s reserved through the governments of each of the 27 member states.

So, you see a tension there where Europe realises that on a geopolitical level, it’s necessary to form the cohesive strategy towards emerging technologies and the national security impact, but at the same time, is hampered by the fact that it doesn’t have the authority, because that’s with the 27 member states. And the four, I think, good examples of regulatory activity, first of all, there’s, of course, the export controls regulation that, traditionally, is focused on regulating technology and its international dissipation and proliferation. Where the recent new regulation has shown that, actually, there’s no appetite amongst the 27 European national governments to regulate it for a – for foreign policy or national security objectives, beyond what was already in place in the existing international regimes.

The second prong is – and the Secretary of State mentioned the National Security and Investment Act in the UK, Europe has set up a framework to look at foreign investment, amongst others, into critical technologies, emerging technologies. But then, again, the – that mechanism is nothing but, really, exchange of information between member states and the European Commission, where member states and the Commission can issue non-binding opinions about foreign investment in another country. And again, the final decision being left to that national government. And the third problem I would mention is, of course, 5G technology, where the Commission has played a leading role in developing the 5G toolkit for member states, essentially, to make sure that member states were aware of having to protect their 5G infrastructure from potentially hostile of malevolent foreign actors. But again, these were very much recommendations.

So, I think, to cut a long story short, whilst Europe is a trading bloc and an internal market, for sure, we will see, going forward, different levels of national security impact on foreign investment in verge – emerging technologies, developing technologies, or strategic technologies, between different European countries. Some of them can economically afford to take a very high standard, or impose a very high bar, preferring national security, whereas others, from an economic perspective, may not be able to afford that. So, I think it’s going to be a very diverse landscape and I thought it was interesting to see that, you know, the real impact on a geopolitical scale is probably going to be the adversity between, on the one hand, the US and on the other hand, China, with Europe potentially being caught in the middle.

Dr Renata Dwan

Caught in the middle, Jasper, or is it, as it strikes to see, often says, “a third actor with its own autonomous perspective and engagements”? I mean, what is the scope, do you think, for a little bit more cohesion in the next years between the EU member states themselves in and around national security, possibly building on the failures of the 5G experience? And I would ask just a question, do you see leadership amongst particular EU member states in this who might see themselves as tech leaders in the EU space to, sort of, convene, engage and bring together a more cohesive European Union position?

Jasper Helder

I think Europe would prefer to be a third actor, but as I said, because of the constitutional elements and the authority that the Council, the Commission may have, and of course, how the Parliament may influence that, may actually restrict it in becoming that third actor. So, there’s a risk that they might be just be caught in the middle because the member states can’t reach consensus on this. But as you say, there clearly are member states who play an advanced role in certain industry sectors and I think it’s – you’d be hard pressed to say, oh, there’s one European member state that is the technological leader. But if you look at different industry sectors, clearly, there are, you know, European countries that are more hotspots than others and I think that that is exactly what will happen, is for example, in the semiconductor industry, there’s leading industries in France and Germany, and some in the Netherlands, as well. So, I would anticipate that the three countries would get together and would try to synchronise their agendas from a national security perspective.

Because the other thing is, European is an internal market and one thing you do want to avoid is water running to the lowest point. If there’s one country that is open for potential investment or purchases of strategic technologies that other countries may not be, that’s a vulnerability that affects the entire European market. So, that’s what I would anticipate to happen, Renata, in industry sectors, to – for the leadership countries, in particular sectors, to draw closer and that is, I think, exactly what the European Regulation on Foreign Investment Review tries to do, is to facilitate information exchange between those countries that are directly infected – affected by certain tech investments.

Dr Renata Dwan

Thanks, Jasper. I think that’s going to be a fascinating question, also, how does the private sector respond? And indeed, civil society groups respond to that sort of complex multifaceted picture and so, I’ll come back to you a little bit on – with that and your thoughts on that.

But let me turn now to Zoe. Zoe, from the US perspective, you know, the regulatory framework looks quite different. The approach, the culture around the regulation of key technologies and emerging technologies, has traditionally taken a slightly more laissez faire approach than the EU model. But also, we are also seeing in the US, the discourse around the China threat much more accelerated, perhaps, and dominant in that space. So, how is that being looked at, the balance between promotion, investment. and control, let’s say, around regulation, from a US perspective today?

Zoe Weinberg

Thank you, Renata, and thank you to Chatham House for hosting this event and to the Secretary for his insightful remarks. You know, Renata, this question of balance between national security and economic policy is a very interesting one and, you know, some have said that we’re really entering this new geoeconomic world order, with a full collapse of geopolitical security and economic agendas and the deployment of economic tools to achieve strategic outcomes. I think, in large part, this has been driven, or is, sort of, reactionary to China. You know, as the country has had its economic rise, I think it’s led the US to reconceive of its approach to international trade and the US has often liked to characterise Chinese actions as economic aggression, which, in some ways, is a very convenient characterisation to then justify economic responses and decoupling.

You know, I think it is unlikely that President Biden will completely continue the protectionist stance that we saw during the Trump administration, who, you know, contributed a great deal to the collapse of the economic and security rationales. But I think that the open question is really, you know, a matter of degree. 2017 was the first time that the phrase, “Economic security is national security” appeared in the US National Security Strategy, but it has now been repeated over and over again, and I think we have to wait and see whether or not the Biden administration will seek, ultimately, to try to disentangle the two.

You know, of course, if the United States, or another country, is entirely dependent on other states or adversaries for certain critical technology supplies, then that is a serious vulnerability, but the worry is that the spectre of that danger will then be used to justify, you know, all types of superfluous protectionist measures. So, I think from the US perspective, when, you know, when it comes to protecting America’s technological edge, I think it’s useful to think about it in terms of both upstream and also downstream responses. And when I say upstream, I mean all of the, sort of, proactive efforts to seed innovation, to invest in research, to attract talent and generally create the conditions for progress. You know, many of those efforts are, in fact, aligned with an open trade environment and economic policy. The US Senate recently passed the Innovation and Competition Act and I think that’s, sort of, a good example of those types of efforts.

When I say downstream, what I mean are these largely defensive actions to limit the impact of existing harms and President Biden’s decision recently to expand the ban on investments in Chinese firms, linked to the military, is a good example there. And I think this is where security restrictions can really bleed into economic restrictions that end up looking quite protectionist. So, for every effort to control, there also must be a countervailing moderating force to ensure that we, ultimately, strike the right balance and this is true across the board, but it’s particularly true in export controls and investment screening and also in intellectual property protection. But the same logic, you know, applies to privacy and immigration controls and so forth.

You know, first, I think the US really should focus on modernising its export control and investment screening processes to better address dual-use technology. Right now, there’s currently, no clear and consistent framework that guides US decision-making on protecting critical technology and there really just ought to be a more highly integrated system for analysing applications to the Committee on Foreign Investment in the United States, CFIUS. And as part of those efforts, the State Department, the Treasury, really ought to also be working with allies to improve their screening processes, to expedite screening for trusted partners and to look to share data and information about investment patterns, so that nefarious investments can be more quickly identified.

But I think we, on the, you know, on the flipside, we also need to be careful that those efforts, while robust, are also carefully and narrowly tailored. I think it’s easy to be very overinclusive here, and in the US, we have something called the Export Control Reform Act, that dictates how commerce ought to determine what counts as, sort of, foundational forms of technology that are worthy of export controls and CFIUS review. It’s important that that list must be made judiciously, so that it is not overly stifling of innovation. Now, right now, commerce has been getting a lot of heat for being so slow in creating that list, so that in of itself, is concerning, but we can put that aside for now.

And then, second, on intellectual property protection, you know, the US needs to recognise that IP policy is both a national security concern, but also an economic issue. We’ve currently lacking effective data protection regimes. There’s also legal uncertainties in patent laws that have actually caused Researchers in the US to rely on trade secret protections instead of patents, which is worse for the innovation ecosystem, and in that void, China is readily taking advantage, incentivising their own patent production, establishing technical standards that may, ultimately, have follow-on effects for future innovation. And not to mention their use of legal and less than legal means to obtain sensitive technological data and information. So, we definitely need to counter those efforts through stronger IP protection and combatting IP theft. At the same time, we also need to remain committed to cultivating an open research environment. We need to be investing in building out open-source libraries, tools, datasets, when possible, and we need to proactively help Researchers in universities to balance both research security and research collaboration.

I realise I am running over time, but I guess the last point I’d like to note is that when we consider what it means to regulate emerging technologies, I do think we need to conceive of regulation in the broadest possible terms. So, it’s not just legislative or executive action. It’s also the ways in which industry is engaging in self-regulation and it’s the international norms and standards that have collectively formed, or will continue to collectively form, the Global Technological Order, going forwards. So, I hope we’ll have a chance to discuss those subjects, as well, but thank you.

Dr Renata Dwan

Oh, thanks for that, Zoe, and it’s a great point that you note at the end, that what do we mean when we say ‘regulation’? Because it gets at the heart of self-regulation by the industry, self-regulation by developers, by the ethics component, by the thinking, as well as the national laws, standards and frameworks. And that gets to something that I think it’d be just really interesting to hear your perspective, to what extent is there a degree of consensus in the US, let’s say, body politic, or to what extent to – can anything be bipartisan? But is there a bipartisan approach to this question of national security and prioritisation in the regulatory space? And I ask that in – given the – in an environment in which China appears to be one of the few areas of some degree of bipartisanism, and is that trickling through to debates around regulation of emerging technologies, or is it still very lively and multifaceted?

Zoe Weinberg

I don’t think that there is full consensus, by any means. I think there is a shared concern across the political spectrum about the role that China is playing and the ways in which the US and the West ought to remain competitive, but I think that’s where the consensus ends. And opinions about, you know, how to address those challenges really range, as well as the sort of, thinking on how to prioritise national security concerns versus other economic concerns. I also think that when, you know, when it comes to conflict in emerging technology, I think we’d be wise to remember that there actually really is not a unified power or central authority here. This – the centres of power in our Global Order are becoming increasingly diffused, privatised, transnational, and so, the power players and the biggest threats are just as likely to take the form of, you know, non-state actors, rogue regimes, corporations, as well as superpower nations. And I think that’s exactly what we’re seeing now in the US with a whole spate of recent ransomware attacks. So, the role of private companies, of universities, of non-governmental bodies, multilateral bodies, is all critical here and they are all both sources of potential progress, but also sites of potential vulnerability.

Dr Renata Dwan

Oh, thanks, Zoe, and further complicates the regulatory picture and framework.

Patricia, if I could move to you now in the context of developments at the multilateral level, to think about the regulation of a critical and emerging technologies. I mean, interestingly, in this question, it started from a security perspective. It’s not started from an economic secur – perspective, moving over, then, to security. It’s very much about responsible behaviour and what is the roles and perspectives of states, in terms of threats to peace and security and to stability? To what extent does that framework giving – sorry, that emerging framework, offering some perspectives on how we might think about regulation, protection and investment frameworks for critical and emerging technologies?

Dr Patricia Lewis

Yes, thanks, Renata. I thought the previous two speakers have absolutely hit the nail on the head. You know, we do need to think of this in the broadest possible terms. I think the biggest problem in every country and then regionally, and then internationally, is the balance between the regulation to restrict and the regulation to assist and promote and I think that’s – you know, trying to find that sweet spot in which you have the right regulatory frameworks to restrict the worst possible outcomes of these technologies and the right promoting, enabling, empowering regulations, to make sure that innovation is fostered and Scientists can work together across boundaries for the betterment of humankind. These are the two forces and trying to find the harmony between those is so very difficult, I think.

I think, as well, we also, in this discussion, need to be aware about the range and the new set of transformative technologies that are heading our way. It’s so easy to get very focused on the digital technologies that we have and the way they’re evolving, but I think we need to be aware that in addition to digital and, of course, you know, artificial intelligence, machine learning technologies, we’ve also got new quantum technologies that are coming onstream, particularly in sensors, communications, cryptography. I think everybody knows about the computer side of things, but the others are actually about to be or already in deployment. We have bio and synthetic bio and the new medicine in the microbiome. These are all new, very new, approaches and technologies. We have new cognitive sciences that are really coming onstream and pose all sorts of difficult ethical questions and of course, we’ve got the new space, the private sector’s new embracive space, if you like, and the way that that’s going. And the – and on top of that, in all of that, and it’s been mentioned already, is the need for mineral resources, but also the need for human expertise and how we develop that and what resources we have and how we’re going to manage them, and I think that’s the conundrum that we face.

And internationally, it’s very much about two things. One is agreement of principles, which you often don’t get much agreements, and then you have the harmonisation of national and regional regulations. So, you may even get agreement of principles, at least, you know, a few, but then you’ve got all sorts of difficulties in that most countries have already got regulations already in existence, and how to harmonise those and how to make sense of them all, regionally and internationally, is non-trivial. And I think we see very different approaches now, particularly we’ve seen over digital and we’re seeing them in most of the other spheres, too, between China, the United States, Russia, the European Union and so on, and the rest were – sort of, get caught somewhere in the slipstream of all of those.

As you rightly say, over the years, there’ve been many attempts to develop multilateral instruments to restrict access to technology and provide regulatory frameworks. They’re mostly in the form of clubs, sort of, small groupings. We’ve got the missile technology control regime, for example, which is 35 countries. We’ve got the Australia Group, which is 43 countries. The Wassenaar Arrangement, which also covers digital technologies, has got 42 countries. And so, you see these clubs of countries that agree on a set of principles and measures and some of them are quite broad in their range and the types of countries involved, but they form these, sort of, clubs. But I see them, really, as a, sort of, a delaying factor, more than a really careful attempt to try to harmonise the international regulatory framework and to think these through – things through, other than an us, we haves, versus you, you haven’t got these technologies. And that’s to do with this idea of dual-use technology, which I’m not sure is a particularly helpful framework in going forward. All technologies have, you know, positive and negative applications and we need to think about them much more in the round than that.

So, in terms of what’s going on at the moment, on the digital side, it’s actually quite exciting at the moment. We have a lot going on in the international digital regulatory sphere, mostly about setting norms and standards, as Zoe said, and we’ve got quite a few initiatives on the cyber and data governance side of things. We’ve got the groups of governmental experts that have been held over many years now and this year they actually managed to agree a report. In – we’ve got the Open-Ended Working Group also on Cybersecurity in the UN, which also managed to agree a report recently.

We have a new process starting up on cybercrime and this cybercrime and cybersecurity and digital data privacy surveillance were all in one, sort of, big messy space, but it’s all connected. And then, I think we have, you know, some top-level thought going on. We have the UN Secretary-General’s Roadmap, which is based on the High-Level Panel for Digital Co-operation, which they came out with three, sort of, governments’ models. We’ve got the OECD, looking at data governance and they’re looking at things in a very round, integrated way. And we have the ITU, which is really down in the weeds, looking at the standards for the way in which we do things, the standards for our technology, and that’s turning out to be really important and really political, because whoever controls those standards, controls the way business gets done on the internet. And I think we need to pay a lot more attention to that.

And I’m particularly minded, and I’ll finish on this point, Renata, of this work and our own team at Chatham House, Harriet Moynihan and Marjorie Buchser, looking at anticipatory governance and thinking through how we protect into the future and don’t just deal with the now, but look at what’s happening now, to see how we might create new regulatory frameworks that could both assist and restrict and get that sweet spot, going forward. Thanks.

Dr Renata Dwan

Thanks so much, Patricia, and I think it’s really interesting this point you raised that there – what was seen as, often, the boring technology stuff, like standards, that the ITU has now become the arena for some of the most sharp tensions between – in the US and Chinese perspectives on control. Not just of the frameworks and the regulatory mechanisms, but also of the continent, in particular, of digital systems and structures. So, the technical has become the political and the level of the political remains, as you said, at the abstract levels of principles, almost easier to agree.

I also think something all three of you brought out that perhaps we might want to get into a little bit more in the questions, is the dual nature of most of the technologies you’re speaking about. So, applying a national security framework for a dual technology is inherently challenging, because it’s a technology that has many different capacities, to be used across many different fields, so therefore, you used the example, Patricia, of missiles and missile technology. They belong in a space that we might commonly call security and defence, not limited, but can. Whereas the technologies we’re looking at now are as much about civilian uses, primary individual uses, all sorts of economic use, as well as a security component. And I think that’s a fundamental challenge for us when we think about regulation of whatever lens. Patricia, you wanted to add something?

Dr Patricia Lewis

No, I just wanted to say that, you know, the rockets for space and the missiles for nuclear weapons are the same technology and in fact, trying to separate out those two things has been extremely difficult to do. So – but it can be done, it just takes quite a long while, but then you get these, sort of, clubs of the haves. And we saw, for example, you know, in the creation of the new South Africa, South Africa deciding to get rid of all of its rocket technology, which would’ve been a really important industry for it, but it removed itself from that game in order to join the missile technology control regime. And that, to me, was a moment at which different things could’ve happened if we’d had a very different understanding.

Dr Renata Dwan

Thanks very much, Patricia. I’m going to now open up to a couple of questions. I’m going to invite those of you in the audience that would like to pose questions and perspectives, please do. You’re – you can take the floor and read – say your question, or I’m happy to read it out for you. I also would like us to come across, back to the question to how does the private sector respond to this changing nature and how do we balance that space? So, maybe Jasper, in a moment I might come back to you from that question. But let me just ask you a first question that comes from Dina Mufti, and Dina has asked, and it’s to something you used an example of semiconductors, Jasper, “Where do UK businesses source their semiconductors from? And if we want to mitigate for the impact of global semiconductor shortages, what will the UK invest in nationally and in which companies? Will there be a new sort of drive to develop some autonomy there?” So Jasper, I’ll start with you, and Zoe/Patricia, if you want to come in on this question.

Jasper Helder

It’s a very interesting question and I’m quite sure the question was also inspired by the US strategic move towards onshoring, if you will, the semiconductor supply chain. So, silicon semiconductors are manufactured in fabs, the vast majority of which is located in Southeast Asia and that was also a point of the Biden administration that a lot of the technology development takes place in the US, in Europe, but the actual manufacturing takes place in Southeast Asia, which as – it creates issues, as the Secretary of State mentioned, of national resilience. Your supply chain for such a critical input becomes dependent on items being manufactured abroad.

So, is the UK going to invest nationally and in which companies? I wouldn’t know in which companies, but clearly, if you look at the recalibration of UK foreign policy, which has a very strong focus towards Asia, amongst others, for this particular reason, of course, the fact that you’re dependent on Southeast Asian fabs to produce the chips you need to make all the kit and instruments here in Western Europe, presents, potentially, a national security issue, in particular because there’s a dominant geopolitical player in that region, in China, that has an interest in securing control over semiconductor manufacturing. So, that is a clear shift where you see, traditionally, semiconductors being regulated, as Patricia mentioned, from the dual-use perspective, you can use them for civilian objectives, you can use them for military objectives. So, these collabs of countries got together and said, “Oh, we need to control the proliferation of this technology because it’s dangerous if it is freely visible, if everybody can get their hands on it.” That was a non-proliferation motive, but clearly now, and that is, I think, why these extra control regimes, like the MCTR, are becoming more and more obsolete, what they do not address is these questions of economic dominance in a particular supply chain, regional dominance and the national security issues that that represents.

So, I would anticipate that, yes, the UK Government, in its technological advance and the effort it puts into that, I would anticipate that they would want to see fabs move much more closer to its sphere of influence, into Western Europe, into the UK, into the US, where these fabs are located in countries that the UK is allied with, so that they can develop a common approach as to, you know, the integration of these fabs into critical supply chains, rather than in locations, which are not just geographically remote, but also politically remote, in the foreign policy objectives that the countries where these fabs are located, which they set to achieve. So, yes, clearly, I think we’re going to see a trend towards onshoring semiconductor manufacturing into Europe, into the US, into the UK.

Dr Renata Dwan

Fascinating, and your point, Jasper, about reducing the isolation or the exposure path of resources that are in politically or geographically isolated spaces, also big issue for uranium mining, big issue for some other natural resources that we might think about, cobalt amongst them. Zoe, do you have thoughts on this question of the semiconductor industry and what their countries’ implications might be?

Zoe Weinberg

The only thing I’d add is that I think it’s important that we keep an eye on Chinese involvement in the Taiwan semiconductor industry and I think it’s very likely that we’re let – that we’ll see increasing, sort of, aggressive and hostile actions to try to exert more and more influence and control over Taiwan’s semiconductor manufacturing capacity. I think that’s likely to take somewhat subtle forms, especially initially. I think we’re unlikely to see some sort of, you know, physical attempt to overtake that industry, but in, sort of, subtle economic ways, I think we’re likely to see that really increasing over time. And the US and Europe need to be thoughtful about how they would respond if China really were to, sort of, take control of that production capacity.

Dr Renata Dwan

Thanks very much, Zoe, on this one. Patricia, do you have any thoughts on this particular…

Dr Patricia Lewis

Yes.

Dr Renata Dwan

…supply chain resilience challenge?

Dr Patricia Lewis

Just a small additional thought. I mean, it – I think it’s all about getting more resilience in the supply chain that which provides a kind of, a sense of security in the supply chain, as well. And, you know, there are new semiconductor technologies coming onstream, such as compound semiconductors, which aren’t as reliant on the minerals that we have been using. They’re reliant on other ones. But again, you get more resilience if you do a bit more spread betting. So, we’ve tended, in the tech sector, to, sort of, go down one channel and get the economies of scale, which is – are great, but you know, there are some downsides to that. So, we need to be a little bit more creative and innovative, I think, in thinking about the supply chain.

Dr Renata Dwan

And that gets at the issue the Minister mentioned, which is the industrial policy and strategies that you develop and a much more perhaps we might say steering role played by government to incentivise that breadth.

I’m going to move onto another question now and I’m going to invite Nicole Carr. Nicole, if you’d like to ask your question and I’m going to propose that we might kick off with Zoe first to respond. Nicole, would you like to take the mic and ask your question?

Nicole Carr

Yes, thank you very much and thanks for the speakers for a really good discussion to date. I was wondering how the speakers think about casting national security legislation and what – how it should be cast or what protections should be built in to avoid the kind of, protectionism and economic security, rather than national security, or tech sovereignty, under the guise of national security concerns? And I suppose I ask this with a particular angle, which is some of us tried very hard to build a definition of national security into the National Security and Investment Act and we were resoundly dismissed, actually, in kind of, three versions of that act. But we thought it was important that there was at least a conceptual underpinning to national security, so it wasn’t misused. But I’d be really grateful for speakers’ thoughts on that and maybe there’s a different way of thinking about it, rather than definitional.

Dr Renata Dwan

It’s a great question, Nicole, and at the heart of US-European discussions, as much as discussions between US and China. And Zoe, I’ll start with you, and then Patricia, and then Jasper.

Zoe Weinberg

I do think Nicole is very right to be concerned about the potential for, sort of, over-securitising a lot of these technologies. I think there is often an impulse to do that and it’s actually, you know, it’s interesting, I think you can, sort of, get an indication of where things are headed, based on which entities within government own certain topic areas. So, for example, at the National Security Council, which is part of, you know, the White House in the United States, historically, technology was not part of that portfolio. It was under the Office of Science and Technology policy, which still does a lot of that work, and more recently, there have been efforts to create offices of emerging technology within the National Security Council, which I think is the right decision, because as we’ve talked about before, so much of this technology has dual-use or multiuse, that has real security implications, but there also is a risk that you start to view all of that technology through a security lens, as opposed to anything else. And that certainly can carry over to the legislative space, as well.

I mean, I think my instinct here is, sort of, along the lines of a few of the measures I mentioned earlier, which is that I do think that we just need to be thoughtful about, sort of, narrowly tailoring what we consider to be truly critical foundational tech that has true security implications and perhaps the default should be to be underinclusive, as opposed to overinclusive. I mean, it’s, sort of, you know, hard to know, especially as it becomes more and more difficult to anticipate how this technology will be used. And then, I think at the same time, there just needs to be a, sort of, collective effort to continue to promote open economic policy and open source data and data sharing and, sort of, open research environments, alongside a lot of the, sort of, efforts to, you know, shore up protections for these technologies.

Dr Renata Dwan

Thanks, Zoe. Patricia, do you have thoughts on how we might think about that conundrum?

Dr Patricia Lewis

Yeah, I think it’s really interesting. At the Joint Committee on the National Security Strategy a few months back, there was a really interesting discussion on how we think about biological entities, such as viruses, such as bacteria, that can be weaponised or can be naturally occurring. And the point was made that the securitisation of this problem has led to a lack of emphasis on things like primary healthcare, which is, in fact, your first offender. So, the securitisation of the issue has led us into not being fully prepared for a naturally occurring pandemic in the way that we would’ve been, perhaps, for a biological weapon being used, but one, of course, has hit us first. So, it’s – it was a really interesting discussion.

I’m very interested – I mean, the Secretary of State mentioned the integrated review and used that as the basis and I think that’s absolutely right, and the UK wanting to position itself as a science superpower, and, you know, the UK prides itself very much on, quite rightly I think, on its scientific and technological innovation. But trying to make that, then, into something that’s more than just innovation, that it’s actually going to scale and providing the basis for manufacturing and resilience within the critical infrastructure. And the thing is, I don’t think that the UK can do that as a protectionist state. You can’t do innovation in isolation. You have to connect with people all over the world. You have to have different views. You have to have diversity. You have to have different brains coming in and with different knowledge. And, also, you can’t do it, or you have to prioritise, so other countries have to do some things and other countries have to do different things, so that you’re not all doing the same thing and missing out on some stuff that would be really important.

So, you – the scientific and technological community tends to be extremely international and doesn’t see the boundaries that perhaps the political governments do. So, it is, again, another cultural difficulty, I think, in creating that whole set of requirements for genuine innovation and making technology work for humanity, at the same time, taking care of what we might define as natural security. And over-securitisation, I think, is a big problem and has been a big problem for some decades now.

Dr Renata Dwan

Yeah, Jasper, you’re dealing with this each day and working with clients who are navigating this space. Your thoughts…

Jasper Helder

Yes.

Dr Renata Dwan

…on this?

Jasper Helder

Yeah, I think Zoe and Patricia raised excellent points from a principles discussion, because clearly, you know, global technology development and innovation is being hampered, where free flow of information and technology is restricted. Look, I think, and this may be cynical, but actually, economic prevalence in a particular industry sector can suit the nation state very well from a foreign policy objective. So, the over-securitisation that Patricia mentioned, I think originally, it’s based in genuine concerns about proliferation from weapons of mass destruction. Nuclear technology is a very good example of that. We work a lot with clients in the nuclear space and scientific research community involved in nuclear research and, of course, everything that you do is hampered by the fact that you’re exchanging critical technology that could be deployed for very, very malevolent purposes. But at the same time, to develop it further, you need to have that free exchange.

And what I see, in many regulatory developments by different blocs, be it the US, be it Europe, be it the UK, be it China, is that nation leaders are very well aware of the fact that economic prevalence can suit the foreign policy objectives really well. It creates leverage and for that exact reason, I’m quite sure that that drives much of the over-securitisation that Zoe and Patricia were referring to. From a nation state’s perspective, being in control of a technology and being able to influence its innovation and development on a global level can actually be a good thing. So, I think on a principle level, you may agree or you may disagree with that, but it’s basically, as old as gunboat diplomacy. It will not go away and it will be a factor that will influence regulatory developments in technology areas for the decades to come.

Dr Renata Dwan

Thanks, Jasper, and I’m going to now move to one of – another one of our questions, which links neatly to some of these discussions, from Bryan Martling. Brian, would you like to take the floor to ask your question?

Bryan Martling

Oh, yes, thank you. I was just curious when, you know, and I’m coming from a US industry perspective, but when might we expect the UK regulations to release a standard akin to US Export Control Reform and particularly as it pertains to the specially designed definition, such that low level items, designed decades ago, may be administratively released from, you know, specifically ML10a controls to facilitate, you know, regular business? You know, this is an issue we face regularly in the aviation industry and I’m just curious if that’s even on the table for a discussion right now.

Dr Renata Dwan

Okay, so, Jasper, I’m going to start with you and then I’ll ask Zoe and Patricia if you want to come in.

Jasper Helder

So, it’s a very good question, Bryan, thank you, and addressing it from a very narrow technical perspective, no, there are no moves towards further elaborating the specially designed definition, as it is maintained in UK export controls’ regulation. On a somewhat broader level, the US Export Control Reform is often perceived to be a release of technologies from constrictive export controls, but I don’t think that is entirely correct. One of my current partners that I work with, Kevin Wolf, was closely involved in facilitating the Export Control Reform and it’s actually a shift of technologies that were previously controlled under the guise ‘military’ to what perceived to be lighter controls as technologies that could be deployed civ – for civil purposes and military purposes.

However, if you are a bit of a regulatory nerd like I am, and you get into the weeds of the actual protections and the restrictions on the dissipation of these technologies that were moved from the military space to the lesser controlled space and you start looking at how they are restricted, the conclusion is well, they’re equally strong restricted nowadays as they were previously. Specially designed or modified is something that if you’re struggling with, you’re not alone. I think there’s an entire industry struggling with this. There are, on the US side, I think, more detailed guidance norms issued by the state department that deal with this issue than there are on the European side.

I think, if you want to fix this problem as an industry, the only way to do that is to engage on a case-by-case basis, in discussion with the regulator of the country that you are seeking to export from, because on a Pan-European level, within the EU, there’s no uniform definition and in my view, I doubt whether there will ever be, because individual European countries have individual military export interests. They’re competing with each other, actually, so it’s not in their interest to come up with a common definition. On the UK side, I think it’s easier, there’s only one government, of course, but there is some, but very narrow, guidance.

And I think, from a regulator’s perspective, Bryan, my concern would be if I release too much, I’m going to be held politically responsible for technology ending up in countries or conflicts where I don’t want them to be. But if I release too little, I’m throttling industry, and that is the continuous dilemma, which is why I think you see very little concrete guidance being published about this that helps you as an industry. The government prefers to keep a close leash on controlling military technology because of its sensitivity.

Dr Renata Dwan

Thanks, Jasper. I’m struck on this particular issue, you used the analogy, Jasper, earlier, of nuclear technology and that, sort of, long tradition of having clear limitations for exchanges because of not wanting it to fall into the wrong hands. Of course, we saw in the years after 9-11 quite a shift in the regulatory framework around nuclear technologies and the whole space around nuclear security, precisely to help to prevent, not just the threat of states taking such proliferation threats or opportunities, but also to prevent terrorist and individuals or groups of non-state actors. So, against that space we saw quite a lot of co-operation at the level of multilateral space to put in place frameworks. We saw the Financial Action Task Force on financial regulatory, so quite a lot of mechanisms to prevent terrorists financing terrorist capabilities. It seems to get much harder once we come into the space of geopolitical competition and when the actor, or the competitive threat, is a state, it’s quite a good deal harder.

And so, the question I think I’m going to pose to all of you is back to this question of how do companies respond? They want to stay on the right side of the law. Their commitment is to compliance, and yet, they’re balancing this increasingly fractious geopolitical space. We’ve seen some companies in the digital space decide to come together themselves and try to drive the regulatory framework and the agenda, the Paris Call and we saw around digital space. We all actually saw companies lead the way, in terms of some of the engagement. That’s been harder in the context of the National Security Frameworks, for all the reasons that we know and think, but I just wanted to get your sense of where do you see the private sector in this space, and whether it is about coming together? It is about shaping and influencing, as we always have, the outcomes and government public policy processes, but to what extent is there scope for industry, sort of, to frame some of responses and engagements around these difficult balances? I don’t know if any of you would like to take a stab at that. I’ll start with you, Zoe, and then Patricia, Jasper.

Zoe Weinberg

Yeah, I’m happy to jump in. You know, I think it’s interesting, because in the sort of, regulatory void and uncertainty, we’ve seen, in the United States, that some technology companies, particularly in the digital spaces you mentioned, have been very, sort of, busily establishing their own legal and regulatory regimes and are, sort of, self-regulating through a few different means. One I would say is the publication of their own kind of principles, rules and standards. You see this especially in the use of machine learning by different social media companies and things like that, as well as the voluntary withholding of certain sensitive research that they realise could be, you know, used by malign actors. And third, by establishing some internal adjudicatory boards to help make decisions about difficult, sort of, tech ethics questions.

And, you know, I would say it’s both heartening, on the one side, to see that companies are taking this seriously and are trying to take responsibility. However, you know, they are, essentially, assuming the roles of commercial party, regulator and Judge all at once and so, you know, I think self-regulation within the private sector may, sort of, provide a stopgap solution. But the lack of accountability and the ad hoc nature of their practices, I think, raises some serious questions about whether or not corporations are really the best stewards of the public’s interest when it comes to safely deploying very powerful and rapidly evolving technology.

Dr Renata Dwan

Thanks, Zoe, thoughtful comments. Patricia.

Dr Patricia Lewis

Absolutely, I would agree, and I think, as well, they – what we tend to see, often, with certainly, you know, some of the bigger companies, is a risk aversion to, for example, investment. I’m thinking very much of, you know, the attempts to invest in Iran post the nuclear agreements and the fear and it turns out, quite justified fear, that if countries were to do so, they could fall foul of the US restrictions. So, even though they’re – sorry, companies that were outside the US, nonetheless, couldn’t then do business with companies in the US if they had done business in Iran very easily. And it meant that Iran didn’t get the benefit from the JCPOA, the nuclear agreement, that it had hoped for. And I’m not saying it was what drove the problems, but it was certainly part of what has driven opinion in Iran.

And I think that what we see with companies, generally, is that the ones that do better, the ones that are really well tied into government, understand the export controls and understand the restrictions that are placed on them, internationally, as well as regionally, and sort of, build that into their own risk frameworks and strategies.

Dr Renata Dwan

Thanks, Patricia. Jasper, do you have thoughts on this one, about how the private sector community can respond and evolve and understand and interpret the space…

Jasper Helder

Well…

Dr Renata Dwan

…we’re moving in?

Jasper Helder

…yeah. I typically look at the regulatory landscape from a private sector perspective. Many of our clients have operations all over the globe. So, what you’re trying to do is you’re trying to deal with the diversity and regulatory frameworks, as they apply throughout different countries, and oftentimes, there’s different principles underpinning these. For example, respect for human rights in trading partners is something that is perceived to be very important at a European level. If you start drilling down on individual member state levels, you will see that concretely, some of them find it more important than others.

So, you need to deal with all of those diverging interpretations or regulations, and as Zoe mentioned, the only solution for private industry is to adopt your own rules to try to mesh all of these different principles, attitudes, foreign policy objectives, etc., and regulatory frameworks together and to come up with a common denominator. Now, that’s the first step.

The second step is, as a business, what do you find principally acceptable, yes or no? And I think one of the things that particularly in Europe companies are being held accountable for the choices that they make. It’s not just about regulatory compliance anymore. It’s also about the soft, if you will, areas around this. To give you a concrete example, where a business exports surveillance technology that is being used to combat crime, legally, to a particular country, but where the exporting country’s government is subsequently asking that company, “Well, you know, fine, you’re sharing it with the law enforcement community in that country, but that country has a particularly poor human rights record. Now, we can’t legally constrict you from selling to that particular customer, but as a company, we just ask think about this, is this what you want? Is this in line with the principles you would want to deploy?”

So, I think a strategy is unique to, essentially, come up with a common denominator for the regulatory frameworks of all the countries you deal with, but at the same time, there’s increased pressure on big companies to think about what are your own underpinning principles? And you can no longer avoid or afford, I think as a large multinational, to take a somewhat cynical approach and say, “Oh, we’ll deal with that on a case-by-case basis,” because you’re going to be held to account more and more and more for individual decisions.

Dr Renata Dwan

I think that’s a great point, Jasper, and also the point about the soft law or the soft dimension of influence and reputation and name is as important for companies as it is for states when we think about that perception and that issue and that engagement.

We have a question now from Beyza Unal and I think, Patricia, I think I’m going to ask you to respond to it first and then the others to join in if they wish. Beyza, would you like to ask your question?

Beyza Unal

Yes, sure, Renata. What we are seeing is an increased emergence on tech alliances and NATO, last week, even declared that they’re forming a Civil Ministry Defence Innovation Accelerator, for instance. How can we – how to prevent that increased polarisation and tribalism in the international governance sphere, when likeminded countries are forming those tech alliances and how to bring underrepresented Global South’s countries into the international governance and regulation discussions? Thank you.

Dr Renata Dwan

Thanks, Beyza. Patricia, do you want to start off with that?

Dr Patricia Lewis

Yeah, I mean, this is at the very heart of the big problems that we’re facing, I think, in the international sphere, whereby you rightly call it ‘tribalism’. But it’s also very much about the tribe you belong to is the way you see the world and the way you see the international rules-based order, for want of a different phrase. I don’t like the phrase, but it’s – you know, whether you see it working for you, or whether you see that it has, historically, essentially, shut you out a bit and you want to, sort of, push at those rules. So, what we’re seeing, I think, with a number of countries, is that you know – the erosion of Human Rights Law, for example, the erosion of playing nicely in the international sphere. We’re seeing, increasingly, cyberattacks that are not only done by cybercriminals, but by state sponsored entities, or even directly by states themselves and we see the backing of criminal gangs being supported by states, as well. And there is a bit of a Wild West out there, in terms of the way in which some countries are behaving in cyberspace as if it’s a new frontier that they can, kind of, colonise and get into quickly and behave in a way that they would not be able to get away with if they were behaving that way in real life.

So, I – ‘tribal’ is a good phrase for it, because I think that there are these tribes that are forming, which are really difficult to unpick and people are nailing their colours to the mast, and it’s going to be harder and harder to deal with it, as it gets more and more cemented, unless there’s some kind of big international crisis that will help us in time. But nobody wants to create law through crisis. That’s not a good way to do it. So, I think the way in which things are being done at the UN at the moment, which is very much through norm setting, standard setting, etc., is a good way, because it allows certain issues to be addressed, without forcing countries into making international law. And so, it allows that flexibility and adaptability, because one of the big problems we’ve got with this technology is, it’s very fastmoving and all – you know, almost all countries are behind in their national legislation, let alone in their international legislation. Trying to keep up means being flexible, being adaptive. Trying to apply general principles in digital environments would be the way to go, I would say.

Dr Renata Dwan

Thanks, Patricia. Jasper, do you have anything to add to that particular question of the tech alliances and how and what – how inclusive they can be?

Jasper Helder

Well, again, as I said, I mean, for countries to play this role, and as Patricia said, it’s more of a Wild West, I think, over the past couple of years, maybe decades, what we’ve seen is a breakdown, I would say, of traditional multinational global structures in which countries were, essentially, behaving, if you will. And that has been consistently broken down and some governments have actually expressed a wish to break down these structures and the result is this tribalism. So, for many countries, it is a way to, essentially, carve out their own position in the geopolitical order and to be more bold, I think, about the ways in which they try to achieve their own foreign policy objectives. And it’s only through these multinational or international structures, like the UN, that Patricia was referring to, that I think it’s possible to bring countries back into the fold and to make sure that, you know, those countries that do have advantages are actually also paying heed to the consequences of their technological advance and the consequences that has for less developed, or less advanced, countries in that particular sphere.

And maybe I’m too much of a cynic to see that countries individually voluntarily will contribute to creating such a structure and environment, but it’s definitely something that I think should be achieved, and can be achieved, through rebuilding these international structures, be it the United Nations, be it the World Trade Organization, be it the Dispute Settlement Body for the World Trade Organization, and so on and so on.

Dr Renata Dwan

Thanks, Jasper. Zoe, do you want to offer some perspective from the US perspective, as one of the actors trying to champion and lead some of these emerging alliances?

Zoe Weinberg

I do think, you know, that this – it is a values competition and China has really aggressively deployed AI technology, in particular, as a tool of repression and state surveillance. As Patricia said, there’s been this “erosion of human rights” and so, I do think that we need to be as inclusive as possible in forming coalitions to counter the illiberalism and authoritarian uses of technology. I mean, Beyza is right, there’s a lot of mechanisms that have been proposed or are being, sort of, built right now, including – and different, sort of, formal structures and multilateral structures, including, potentially, a T-12 of technodemocracies or a D-10 or an emerging technology coalition. I mean, there’s a whole proliferation and I think a lot of them, fundamentally, have the same aims, but I do think there should be coalitions that are much more inclusive. That are not just, you know, a small list of very technologically advanced democracies, because it really, I think it is, sort of, a collective effort to try to nudge technology in the right direction. And I think that underrepresented countries, as she mentioned, have a real role to play there and in some ways, are sometimes more nimble and able to, sort of, test out and deploy new policies much more quickly than the United States might be able to. So, I definitely think that there’s a very important role for those countries to play in this equation.

Dr Renata Dwan

Yeah, and I think one issue that all three of you have alluded to in your earlier remarks is that when it comes to national security considerations, the extent to which governments are willing to engage in any group, even a group of friends, is going to be very much – depends on the trust, the culture of co-operation, the formal or informal alliances. So, I think that might be true on the broad level of standards and norms and engagement, but when we look at national security frameworks and regulatory frameworks, even amongst close allies, there’s, for lots of historical, but important practical reasons, caution about how much good sense. So, that gets back to this question of how much do we accept that this is a space that will naturally be much more difficult to get that sort of upstream, or even to an extent, downstream, engagement?

We have – I’m going to give a final question to someone, our colleague, Ghadah. Ghadah, would you like to take the floor to ask your question, which builds very nicely on Zoe’s remarks, that most recent remark? Ghadah, the floor is yours.

Ghadah Alharthi

Yes, so, thank you very much. Hello everyone. So, my question whether – as you Western world, especially, we are talking about the EU and the US, whether they are late in stopping the fusion of the China strategy military-civilian? So, it is a matter of time, where, you know, this strategy is implemented, or would be implemented, by China and now, all the acts taken by the EU and the US are just slowing this strategy.

Dr Renata Dwan

Thanks, Ghadah. So, to what extent is there a strategy of Chinese civil-military fusion and to what extent do Westerners, or can and are Westerners being effective in their response? Zoe, I’ll start with you, Jasper, and Patricia for the final word.

Zoe Weinberg

Sure. I mean, it’s challenging because we don’t have any counterfactual here to be able to compare, what if we had taken a different path? I do think we should have some humility about the ability to entirely counter that strategy. I mean, for example, the – both the Trump and the Biden administrations in the US have aggressively pursued sanctions against Huawei. But Huawei recently released its annual report and even though revenue growth did slow, and international sales dropped, the company is still growing and there’s new product categories and they’re expanding in new geographies. So, I do think we need to be realistic about, you know, what we can actually do that stems the tide in different directions.

That being said, you know, I think it is in the US’s national interest to continue to use dialogue as a tool to build trust where possible, with tension – with China and, also, manage tensions, as necessary, and I think that will help to provide, you know, some guardrails for this important bilateral relationship. And I think that there’s different areas where we can collaborate and also where we can try to address concerns and that dialogue, I think, can really focus on, you know, two different areas that are presented by emerging technologies, with two, sort of, overlapping objectives.

The first is to identify some targeted areas of co-operation on emerging technology and that’s really to try to solve some global challenges that affect all of us, including climate change, natural disasters, public health, as well as create some sort of forum or mechanism to be able to address very specific concerns about uses of emerging technology and concerns about human rights and so forth, while continuing to, sort of, build a relationship between the two nations and, also, sort of, take a hard line.

Jasper Helder

I think it’s a very good question and I think it’s also very topical. I mean, it’s a clear strategy and the Chinse Government has publicised this strategy to deploy its industrial complex for both civilian, as well as military, manufacturing. So, it’s a given in the geopolitical arena.

To Zoe’s point, the question is well, what can other countries do to stop that strategy from being executed successfully? Well, not that much. I mean, you can close off your borders for technology sharing and engagement with China, with Chinese companies, but then, you know, there will always be somebody else who is willing to trade.

If you look at the efficacy of responses, I think to Zoe’s point, on the US side, there’s been a very clear response and the response has been that this is not something that the US Government is willing to support. That’s why trading securities, of a large number of Chinese military companies, is prohibited to US persons. This is why enhanced export controls apply to certain categories and certain parts of the Chinese industrial complex.

On the European side, there’s no such comprehensive response. There’s an investment agreement that has been signed between the European Union and China, which is now delayed. It’s particularly the European Parliament that is using human rights related arguments to say, “Well, maybe we shouldn’t have that agreement in the first place.” But there’s also the European Commission deploying the 5G toolkit that we talked about before in an attempt to curb Chinese influence. All of these, I think, are symptoms of an inability for the 27 European member states to come up with a single response and these responses, on a national level, are, to a significant degree, dictated, I think, by the economic reality that some countries have a larger dependency on Chinese investment and trading relationships and technology exchanges with China than others. And it’s particularly that diffuse landscape which, you know, there’s the old adage, ‘divide and conquer’, that plays into the success of this Chinese technology – this Chinese policy of civil-military fusion.

So, I think the strategy, to some extent, will be successful from a Chinese perspective, but I also think that, increasingly, you know, states that have significant technology that China would like access to, are waking up and actually deploying more and more export controls related, investment controls related measures, to try to frustrate the strategy as much as possible. And I’m quite sure that on a European side, we haven’t seen the last of this particular area and the development in this area yet. I think there will be more and more national measures to disfavour Chinese investment, technology exchange with Chinese companies. I don’t think we’ll see them at a European level, because I think the portfolio of national interests is just too diverse, it’s too complicated. And bear in mind, for the European Union to do something by way of foreign policy outside the internal market, or outside the common trade policy, requires unanimity between all 27 countries, which for that reason, I don’t see happening. But on a national level, for sure, more and more measures.

Dr Renata Dwan

Thanks very much, Jasper. Patricia, final thought for you on where Europe is in response to what if strategies we see from China.

Dr Patricia Lewis

Thanks, Renata, and I think that when it comes to China, we need a much more cleareyed strategy as to, you know, what China is, rather than what China we would wish it to be. I think that’s the critical thing. I think we had quite a wakeup call over the 5G problem last year for UK and Europe. We had – we have few alternatives to Huawei technology, in terms of the cost-benefit calculations for these networks, and yet, we had to shift because of the US position on semiconductor technology and we’ve had to, of course, you know, phase it. We can’t just get rid of Huawei immediately. We keep them, still, in the so-called outernet, but as we transition to 5G, where that means less, we’re going to have to move to other technology suppliers and there aren’t many. And so, I think what we need to do is have much more resilience in our supply chains and build in that as part of our whole, kind of, Build Back Better approach, from – COVID phrase I hate, as well.

I think for China there are some big lessons, though, and I’m going to leave everyone with this thought, and that’s that China has to be very careful of not closing down its own markets because of its own internal policies, particularly over human rights, but also over, you now, cyberattacks, over supporting or giving, you know, some support to perhaps criminal entities, and I think that if China is interested in not shrinking its own markets, it needs to look to its own behaviour on the international stage, as well. And I would’ve thought that Chinese businesspeople would be quite keen to see the Chinese Government take some of these considerations into account.

Dr Renata Dwan

Fascinating points on which to end this discussion and I think exactly to your point, Patricia, some interesting Chinese, sort of, relatively subdued responses to the Biden visit last week in Europe, perhaps suggest exactly that, that there are some of these discussions ongoing, some of these thinking ongoing, and perhaps rethinking of some of the particularly fraught days of the world’s diplomacy that we saw in the first year of the COVID. But of course, this is part of a much longer, wider strategy, so – to engage in.

Let me just note in closing, first, I think we heard a great panel. Jasper, Zoe, Patricia, you came from different perspectives, but I was struck by the alignment in your views, in many respects. First, Jasper, you reminded us that this question of this balance between economic and security perspectives and drivers isn’t new. We shouldn’t just see it as something about this technology. The question of where it’s becoming more complex, Zoe, you pointed out to this regulatory framework that is much broader now than just looking at one national country’s policies and frameworks, but the whole standards, the norms, the multilateral, the regional. and the national make it a lot more complex to try to engage.

We heard of the idea of these different more, perhaps, sector level approaches. So be careful not to define it as a single sector, but to look at, maybe, countries leading in particular sectors, leading in particular areas. Patricia flagged to us just how broad those sectors are. But at the same time, we do need to be aware of the interoperability or inter-navigation of these technologies, so how do sector level responses bump up against then? I think the need to look at the multidimensionality of many of these technologies across both civil and military fields.

We heard about the question, and I think Jasper brought it out, as well as Patricia and Zoe, that it’s going to be incumbent upon private sector to really know their audience and know the particular regulatory framework and map, but also the drivers of the culture, the perspectives and the engagement of these countries. So, the need for much more intelligence, risk assessment, frameworks, understanding of the environment and where they’re operating or engaging, to understand what is driving regulatory frameworks and where are some of the barriers to co-ordination?

So, I thought some fascinating responses on this. A lot of questions that I think, perhaps, about knowledge sharing that perhaps we could also unpack on the challenges of sharing knowledge in the sphere of national security frameworks and some of the inherent tensions we have between states to share examples and experience of what’s working, but also with companies and some of the – navigating that space that is often a confidential one. So, a fascinating discussion.

I think I was also struck, at least, by all – a conclusion that you all said, which is let’s not over-securitise regulation. Let’s think about ways, it might not be the definition, but let’s think about ways that we – that that framework becomes relatively and necessarily small and that over time, we review what’s in that security technology space and think about when is it appropriate to get – to remove some of the frameworks that perhaps have required a more, sort of, restrained approach?

We didn’t talk all that much about the prospects of the US, European and UK alignment on policy, but I think from everything we were saying about some of the directions of travel, it certainly is going to be a space to watch that, although Jasper give us some caution about how much we can expect a single European Union view or perspective on regulatory frameworks going forward.

Let me thank all of our panellists, our three great panellists. Let me thank, in his absence, Secretary of State Kwarteng, and let me thank, most of all, you, the audience, for joining us today for what will be a continuing area of Chatham House work and we look forward to seeing you in future discussions. Finally, let me just thank Akin, Gump, Strauss, Hauer & Feld LLP for their support and engagement in this event and to say how much we look forward to seeing you at future events. Thank you very much, everybody, and have a good week ahead. Bye, bye.