This week’s edition reviews China’s industrial policy, North Korea’s nuclear expansion, bilateral cooperation between Russia and China, and the future of cybersecurity in the face of an uncertain economy and offensive AI. Additionally, scholars measure a decrease in disruptive innovation, video game employees unionize, and the government seeks to capture tech employees impacted by layoffs.
Industrial Policy & International Security
China’s Industrial Policy | Asia Society Policy Institute & Stanford Center on China’s Economy and Institutions
In 2022, the Asia Society Policy Institute’s Center for China Analysis and Stanford’s Center on China’s Economy and Institutions co-organized a private, expert roundtable to study China’s industrial policy. A summary report of the discussion explores five key questions: How much is China spending on industrial policy? What are the possible objectives of China’s industrial policy? What are the key, open questions still remaining around China’s industrial policy? What are the implications for Washington, D.C. and the international community? China spends approximately 1.7 percent of GDP on industrial policy and participants believe that Beijing is more aggressively pursuing self-sufficiency in critical technology compared to economic growth. Moreover, some pointed out that tighter US controls could compel Beijing to enact larger-scale industrial policies and that this dynamic may introduce global economic distortions and public welfare losses.
Kim Jong Un orders ‘exponential’ expansion of North Korea’s nuclear arsenal | Los Angeles Times
After a record number of testing activities in 2022, Kim Jong Un is pushing to dramatically improve the quantity and quality of North Korea’s nuclear arsenal, including development of an intercontinental ballistic missile (ICBM) with a “quick nuclear counterstrike” capability. Experts at Rand Corp. believe North Korea is using this effort to improve its negotiating power against South Korea and the United States. Diplomats from South Korea, the US, and Japan indicated this provocation will deepen their trilateral security cooperation but that they are still open to a dialogue with North Korea. While some say that North Korea’s missile tests are not technically impressive, the rogue state has been emboldened to continue advancing its nuclear program because China and Russia have blocked tougher UN sanctions at the Security Council.
Putin and Xi highlight Russia-China cooperation against backdrop of war | The Washington Post
Moscow and Beijing are expanding bilateral relations. Leaders Vladimir Putin and Xi Jinping met by video conference at the end of December to discuss Chinese-Russian relations. Putin expressed hopes to strengthen both military-technical and military-to-military cooperation with China. Notably, the two countries had recently conducted joint naval drills. Bilateral trade is also on the rise—China is importing Russian oil and gas, military technology, and mineral resources and Russia is importing high-tech Chinese goods—and Putin claims it is set to increase by an additional 25 percent. Analysts point out that China has the upper hand in the relationship despite increasing tensions with the US. Because Moscow is more isolated as a result of the invasion of Ukraine (which Xi Jinping has declined to condemn), Beijing has the power to dictate the terms of their engagement.
US Regulation
An architect of Biden’s antitrust push is leaving the White House | The New York Times
Tim Wu, special assistant to the president for competition and tech policy, left the National Economic Council on January 4th, returning to his previous job as a professor at Columbia Law School. Alongside fellow antitrust regulators Lina Khan at the FTC and Jonathan Katner at the Justice Department, Wu helped to lead the Biden Administration’s push to check the power of big corporations (especially tech). Looking back on his public service, he is proud to have “reestablished a presidential role in competition policy and economic structure” but is disappointed that bipartisan tech-regulation failed to pass during his tenure. Wu left his position to spend more time with his family. Deputy director of the National Economic Council Bharat Ramamurti indicated the organization will continue to follow the demands laid out in the 2021 executive order.
Innovation
Papers and patents are becoming less disruptive over time | Nature
Michael Park, Erin Leahey, and Russell J. Funk studied innovative activity across six decades and found slowing rates of disruption across multiple fields. They defined disruptive innovation as that which propels science and technology in new directions (compared to advances in existing knowledge). Park, Leahey, and Funk applied textual analyses of titles and abstracts to data on 45 million papers and 3.9 million patents from six datasets: the Web of Science, the United States Patent and Trademark Office Patents View database, JSTOR, the American Physical Society corpus, Microsoft Academic Graph, and PubMed. Although the quantity of disruptive publications and patents is stable, the prevalence of disruptive works has declined. Based on their analysis, they concluded the cause of this decline is neither a reduction in the quality of work or a dearth of low-hanging fruit but is a result of increased reliance on highly-familiar knowledge (a decline in the diversity of works cited). The authors caution that policy interventions may have limited effectiveness but suggest incentivizing research quality over quantity among scholars.
Cyber
Defensive vs. offensive AI: Why security teams are losing the AI war | VentureBeat
AI expertise is giving bad actors an edge over less sophisticated targets, allowing criminals to overcome cyber defenses. According to a recent Gartner survey, only 24 percent of cybersecurity teams are prepared to defend against an AI-enhanced cyber attack. Moreover, a small percentage of cybersecurity workers have AI skills while adversarial nation states and criminal organizations are growing offensive AI talent. As AI-enhanced cyber attacks become more prevalent, effective countermeasures will need to operate at machine speeds. CISOs and security leaders are interested in seeing AI and ML progress in the following defensive areas: real-time awareness across endpoints, transaction fraud detection, identifying ransomware, blocking malicious traffic, improving security personalization and real-time changes to policies or roles. Automated indicators of attack and natural language processing will be essential technical components of the above defenses. CEO of Mandiant, Kevin Mandia, argues that private industry should invest in cyber defenses and see themselves as essential protectors of public cyber domains.
Cyber chiefs face scrutiny and challenges in 2023’s uncertain economy | The Wall Street Journal
As companies make cuts to contend with economic uncertainty in 2023, security teams will face increasing budgetary oversight and resource constraints. While security teams have largely been spared by budget cuts, especially in critical-infrastructure sectors, continued inflation means they will have to do more with less even if their budgets remain flat. Senior leaders recognize the risk of underinvesting in security but recessionary threats will increase their motivation to ensure resources are allocated efficiently. This could translate to zero-based budgeting exercises, more attentive measurement of returns on investment, and outsourcing some areas of responsibility despite the known risks of working with third-party services. Even large companies intent on growing their security teams plan to take a slower approach to hiring.
State & Local Tech Ecosystems
Nearly 300 quality-assurance video game testers at new Microsoft subsidiary ZeniMax Studios voted to form a labor union. The campaign began before the 2021 acquisition of ZeniMax, but the process was sped up by Microsoft’s pact with the Communications Workers of America to remain neutral on unions—even though it is only legally binding in their planned acquisition of Activision Blizzard. ZeniMax union members are based in Maryland and Texas. Senior game tester Wayne Dayberry described common workplace concerns across the video game industry and noted that quality-assurance departments face poor treatment and pay. Activision Blizzard certified unions in Wisconsin and New York in 2022 and a Boston subsidiary is also seeking to unionize. Microsoft’s worker-friendly position on unionization is unique in the tech industry.
Big tech laid off thousands. Here’s who wants them next | WIRED
Government organizations, nonprofits, and smaller companies are looking to capture tech talent in the wake of slowed hiring and mass layoffs. According to Layoffs.fyi, more than 150,000 tech workers lost their jobs in 2022. With nearly 1,000 companies scaling down their teams, uncertainty in the tech industry is widespread. But the rest of the US job market is strong and it's clear that some former tech employees are looking to pivot. US Digital Response, a nonprofit recruiter for governments, observed rising interest in government tech roles and Tech Jobs for Good saw a 40 percent increase in job-seeker profiles as tech layoffs increased. The government organizations and others looking to hire tech workers are hoping that stability and mission-driven work will help draw in talent. And they are increasing salaries, streamlining hiring processes, and offering hybrid and remote work to sweeten the deal. US Digital Response recently hosted a job fair for ten US state and city governments; the state of California alone is looking to hire nearly 2,500 tech workers.
Democracy Online
We haven’t seen the worst of fake news | The Atlantic
In 2018, the advent of deepfake technology sparked terrifying predictions about malicious use cases, such as spreading a false declaration of nuclear war. While these predictions have not come to pass, advancements like generative AI validate early concerns. The skills and technology required to produce compelling synthetic media are still complex enough that fabricated video or audio is not replacing simpler, more cost-effective tactics to spread disinformation. Experts believe that high-quality deepfakes are still a few years off but new text-to-image software is beginning to lower barriers to entry. However, the early alarm bells provided companies and high-profile targets the time to build defenses. For example, Adobe decided not to publicly release Voco, its audio editing and generating software, and the Coalition for Content Provenance and Authenticity has designed a standard and protocol to build an authentication log for public media. Experts point out that deepfakes are “an evolution of existing problems” in the disinformation space.
Researchers warn of rise in extremism online after Covid | BBC News
Researchers at the Institute for Strategic Dialogue (ISD) have observed an increase in disinformation, conspiracy theories, and extremist activity online in the wake of the Covid-19 pandemic. While this is true across mainstream platforms, ISD’s Jacob Davey points specifically to Telegram—a relatively unmoderated messaging and social platform—as a hub for extremist activity. While Telegram forbids calls to violence and has removed accounts such as those run by the Islamic State terrorist group, fringe groups on the far right have maintained a strong presence on the platform. For example, after being kicked off Twitter, QAnon conspiracy theorists found a home on Telegram. Though the pandemic has eased up, these types of Telegram users have not decreased their activity and have turned to other topics including climate change and the war in Ukraine. Extremist content poses a threat to victims of disinformation and hate and could radicalize more users.
