A new world order is taking shape as private enterprise, in the form of technology companies, start playin a decisive role in geopolitical events, said Ian Bremmer, the president and founder of Eurasia Group.

Speaking to an audience gathered in Las Vegas for the 2022 (ISC)² Security Congress, Bremmer posited that in the not-too-distant future technology companies may supplant governments in making decisions because they control the digital world.

“What if governments start fundamentally failing in being able to deliver the kinds of security that are required for their people,” Bremmer said.

A window into the role of private enterprise in geopolitical events has already opened. Bremmer said Microsoft was behind only the United States and United Kingdom in providing assistance to Ukraine in resisting the Russian invasion that began on Feb. 24. The day before, Bremmer said, Microsoft knew the Russians were coming because they were running the Ukrainian government’s network in the cloud.

Other companies, such as Google and Starlink, also have played a role in the conflict, he said. Bremmer framed the powerful role of technology companies as a possible outcome of the divide between the physical and digital worlds. The divide has created a new world order that, unlike in the past, does not put governments in charge.

“Companies are the sovereign actors,” Bremmer said “They move faster, they have the power, they make the decisions. They literally are the principal entities in this space.” Most of the companies, he pointed out, are in the United States and China, “but that doesn’t mean that they’re the same as the U.S. or Chinese government.”

Geopolitical Recession

Currently, the world is in the midst of a geopolitical recession, Bremmer said. Like economic recessions, geopolitics experience boom-and-bust cycles, although they are not recognized as such because the cycles take so long.

To illustrate his point, Bremmer noted Russia retains a seat on the United Nations Security Council, even though it has turned most of the world against itself with the Ukraine invasion. Yet, two of the U.S.’s most important allies – Germany and Japan – cannot get a seat on the council because they lost World War II. The U.S. and Russia were on the winning side.

“That was in 1945. does it seem silly that in 2022 that shouldn’t be the reason why you can’t actually put a country on the security council?” When institutions don’t make sense anymore, “you get a geopolitical recession. “The institutions globally and domestically start eroding. They’re seen as less legitimate.”

At the same time, he said, the globalization that has been occurring for 50 years is being challenged. There is increased volatility and a process of decoupling between countries. “The first decoupling is we are seeing a complete decoupling of Russia from the advanced industrial democracies, the wealthy democracies.”

The second decoupling, he said, involves the United States and China. It is very targeted and focused on areas of the economy critical to national security. “Americans and the Chinese define national security in different ways. So in the United States, we’re talking about critical infrastructure, we’re talking about things that can be components for bombs and rockets. For the Chinese, information and social media platforms, and some of the digital economy in their surveillance economy is actually national security.”

The United States and China may be moving toward a technology cold war in the next five years to 10 years, but American allies “do not want any part of a decoupling with China,” he said.

Algorithms

As these geopolitical trends unfold, children’s “brains” are being shaped by algorithms, Bremmer said. “Their characteristics are literally being shaped by the algorithms that they are immersed in and through on a daily basis. That’s changing their behavior. What if that becomes the dominant way that human beings see themselves, interact, engage? And governments have no response to it?”

If that happens, the “technology order” can take over the world order, Bremmer said. “I see CEOs and business executives all over the world that are trying to figure out right now who they should align with and how. And understanding the answer to that question over the next decade is one of the most important things we can do for the future of this conference, for the future of all of us here in this country.”