Glimpse into the future - Digital Conflicts in Geopolitics 2035 - Deloitte
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Glimpse into the future Digital Conflicts in Geopolitics 2035
Peace cannot be kept by
force; it can only be
achieved by
understanding.
Albert Einstein
02
The future of digital conflicts in geopolitics - China and the EU | A scenario approach
Scenario Thinking 05
Critical Uncertainties 06
Four Possible Future Scenarios 08
Conclusions and Outlook 12
Methodology 14
Contacts 16
03
04
The future of digital conflicts in geopolitics - China and the EU | A scenario approach
Scenario Thinking
A glimpse into the future of digital conflicts in geopolitics
Geopolitical conflict is as old as humanity. It In the Sophie's World scenario, integrated Before we travel into these four different
has been widely debated by academics, social and technological systems have led to future worlds we will examine the ‘critical
politicians and economists. However, in our strong Sino-European political and economic uncertainties’ or factors that might influence
rapidly transforming world, traditional cooperation. The risk of conflict has them. Digital conflicts in geopolitics are
debates can no longer adequately capture decreased significantly, and technological characterized by rapid and significant change.
the complexities of geopolitical conflict in the developments and mutual understanding Let´s journey into four different future worlds
digital sphere. have fostered a high level of resilience in both in 2035 and see what they would mean for
China and Europe. us.
What could future digital conflicts in
geopolitics look like in 2035? What role could The scenario Collapse of the Digital Global Enjoy the ride!
the European Union (EU), China and non- Commons describes a world of instability
governmental actors have in solving them? and danger. The integration of Chinese and Your
The answers to these questions depend on European social and technological systems
the many uncertainties that accompany the has led to an uncontrolled playing field for
extension of classic geopolitical conflicts into cybercriminals and terrorists, making digital
the digital realm. How the private and public ecosystems highly vulnerable. Both China and
sectors, as well as civil society, in China and Europe respond with inward-looking
the EU respond to these complex questions governance, focusing on their own narrow
will be vital in the future. interests instead of working together.
Scenario analysis can capture such In Cold War 4.0, digital feudalism and
complexities more effectively than traditional protectionism have fostered highly polarized
analytical methodologies. While it is governance systems with digital Darwinism
impossible to predict the future, scenario characterized by a ‘me first’ attitude in both
planning can help to tell stories of the future, China and Europe. Both operate in their own
cutting through complexity and flagging digital sphere and economic markets are
opportunities and risks. This allows decision isolated. Although diplomatic ties are still
makers to develop robust, yet flexible strong, other communication and exchange is
strategies for the future. almost non-existent because of frequent
cyberwars and massive cyberattacks.
Combining the scenario expertise of Deloitte’s
Centre for the Long View (CLV) with the Unsplendid Digital Isolation describes a
academic expertise of the German Institute world of a Sino-European stalemate
for International and Security Affairs (SWP) characterized by border walls, protectionism
and the European University Viadrina, we and isolationism. China and Europe have
developed four possible scenarios for the become highly resilient digital islands with no
future of digital geopolitical conflict. While this exchange between the two. Politically,
glimpse will focus on the question of what dictatorships are on the rise, and technology
digital conflict might look like, further is exploited to further narrow local interests
publications by the SWP, in cooperation with only.
the CLV, will take a closer look at the
implications of these scenarios and potential
solutions. The four scenarios demonstrate
how different the future could be:
05
Critical Uncertainties
Drivers that will shape future digital conflicts in geopolitics
In today’s complex world many forces have means that the possibilities for social and
the potential to affect the development of technological cooperation and exchange
digital geopolitical conflicts. ‘Drivers’ are what between the EU and China are greatly
we call the factors that may influence the reduced, and physical or digital transfers face
future. To identify and prioritize the large severe barriers. The main drivers underlying
number of potential drivers, we used a this critical uncertainty range across all seven
combination of AI-based natural language STEMPLE categories: Digital Divide, Artificial
processing algorithms, traditional research Intelligence, Skill gap in China and the EU,
and expert interviews. The drivers range Interoperability of technological ecosystems,
across all seven of the STEMPLE categories Data Protection and Privacy Regulations,
(social, technological, economic, military, Technology gap between the EU and China,
political/legal and environmental factors) and Industry 4.0.
ensuring a holistic outlook on current and
future complexities. The second axis is formed by the critical
uncertainty ´sustainability of digital
To build the basis for the scenario framework, ecosystems´. This means the capability of
an expert panel rated the drivers according to long-term, development, production and
their potential impact and their uncertainty. maintenance of networks of digital platforms
Subsequently, the focus was put on the most and related digital products. Digital
impactful and most uncertain drivers, which ecosystems can either be resilient or
were grouped into a series of ‘critical vulnerable. Resilience is characterized by
uncertainties’. Critical uncertainties are highly secure digital networks and products
clusters of interrelated drivers that capture and the ability to effectively prevent, respond
decisive questions on future developments. and react to cyber attacks. Vulnerability
In this process, our expert panel defined five describes highly insecure digital networks or
critical uncertainties. After correlation testing, products and the inability to effectively
two out of these five critical uncertainties prevent, respond and react to cyber attacks.
were identified as the axes pairs for our Five major drivers shape this critical
scenario matrix, forming four plausible but uncertainty: the cybersecurity of critical
challenging scenario worlds. infrastructure, the level of cyber resilience, the
attribution of cyber attacks, international
The first critical uncertainty selected is the cyber cooperation and the role of third party
interoperability of Chinese and European states in cybersecurity.
social and technological systems. This
delineates the compatibility of and As a result, the four plausible but highly
relationship between social and technological challenging visions of the future, illustrated on
standards in China and the EU. Chinese and the right, were derived. These alternative
European social and technological systems futures give four answers to our focal
can either be integrated or fragmented. question: What could digital conflicts in
Integration means that the flow of people, geopolitics look like in 2035?
information, capital, goods and services is
encouraged and facilitated, and that societies
can use a common market for social, political
and economic exchange. Fragmentation
06
The future of digital conflicts in geopolitics - China and the EU | A scenario approach
Fig. 1 – Scenario matrix : The future of digital conflicts in geopolitics 2035
Resilience
Unsplendid Digital Sophie's World
Sustainability of digital ecosystems
Isolation
Fragmen- Interoperability of social+techn. systems Integra-
tation tion
Cold War 4.0 Vulnerability Collapse of the Global
Digital Commons
. 07
Four Possible Scenarios
The future of digital conflicts in geopolitics
Scenario 1: In this scenario, China and Europe cooperate terrorism threats. However, despite these
in a peaceful world. The integration of positive developments, tensions between
Sophie's World Chinese and European social and China and Europe on the control of standards
technological systems has fostered a strong have the potential to grow and threaten
Integration of Chinese and relationship and fruitful exchange. This has relations between the two players.
European social and significantly reduced the risk of conflict and Economic competition has led to permanent
strengthened political, social and economic learning in both China and Europe. One result
technological systems and ties. In the competition-based economic of this is a very high level of resilience of digital
resilience of digital system, both players were able to grow their ecosystems. Both players are highly
capabilities within a defined set of standards. adaptable and able to cope with change well.
ecosystems While there are no tensions on the use of Technology is generally employed for the
these capabilities, the question of who common good, for example to increase social
controls these standards is contested. The cohesion and is open to all. While there is
Chinese and the European states have a agreement on social values between China
strong hand in setting standards, but social and Europe, the instruments by which these
and technological interconnectivity ensures values are promoted and enforced are
close cooperation. A Sino-European contested.
Cybersecurity Council has been established to
counter the existing cyber crime and cyber
08
The future of digital conflicts in geopolitics - China and the EU | A scenario approach
Scenario 2: In this alternative future, China and Europe narrow interests. Instability and the high level
find themselves in an unstable situation. of cyber threat have led to low economic
Collapse of the digital Although diplomatic ties between both growth. Access to the open market is key for
global commons players are still intact, the strenuous balance social and economic wellbeing. While big
of today´s Chinese-European relationship international companies can leverage the
Integration of Chinese and has been cemented over the years. The world open digital playing field and profit despite
is a dangerous place – despite the successes the cost-intensity of the economy, all others
European social and of integrating Sino-European social and fight for survival and employees are exploited
technological systems and technological systems, the open-border digital for economic profit. While states have lost
sphere has also given free reign to cyber power, these big private players have gained
vulnerability of digital criminals. The threat of non-state actors in influence.
ecosystems this sphere is significant in both China and
Europe. Global governance thus remains a challenge –
despite the high interoperability, individual
This has led to a high vulnerability of digital territory-based governance systems have
ecosystems. Citizens' security and livelihoods persisted. Although the interoperability of
thus depend on the states’ success in technological systems allows a Chinese-
protecting and growing the digitalized European exchange on different levels, social
economic and social spheres. To do so and cultural ideas have remained largely
innovation is needed, but access to segregated.
technological developments is limited to the
economically powerful and often used for
09
Scenario 3: In the Cold War 4.0 scenario, China and Europe has lost the technology race, making it
Cold War 4.0 Europe operate in a highly polarized system
governed by the survival of the fittest. Cyber
digitally vulnerable. However, with exponential
technological developments and warlords
war is frequent, and states govern with a ‘me and other non-state actors leading constant
Fragmentation of Chinese first’ attitude. Digital feudalism and digital skirmishes, China also finds itself in a
and European social and protectionism have carved the world into situation of high vulnerability. Massive cyber
different socially and technologically attacks have hit both players since the early
technological systems and fragmented spheres, all of which adhere to 2020s.
vulnerability of digital their own, oppositional social and political
values. Ideologies and religion have flourished This has led to the maintenance of
ecosystems in this environment. With no direct border communication and the establishment of a
between China and Europe, divisions have multilateral digital alliance between power
manifested themselves in proxy wars across players, including China and Europe. Despite
Asia and Africa. In and beyond these – the dire state of the world, the existence of
partially hot- wars, technology is employed by such diplomatic ties holds promise, and
states to further their own interests. stability could be reached through diplomatic
Isolationism is also a feature of the economic means.
markets. Separate blocks of digital economies
have emerged, tightly controlled by states.
10The future of digital conflicts in geopolitics - China and the EU | A scenario approach
Scenario 4: In this world, China and Europe find substitution with heavily protected individual
themselves in a stalemate rather than in cyber spheres. Technology is widely used for
Unsplendid digital sustainable stability. The world is narrow interests by both state and non-state
isolation. characterized by border walls; protectionism actors. Governments actively control the
and isolationism rule. Fueled by the information flow within their realms according
Fragmentation of Chinese fragmentation of social and technological
systems, China and Europe have become
to their clashing social and political values.
Resilience has become a major government
and European social and strictly governed, highly resilient digital islands. concern. To ensure this, China and Europe
technological systems and Any exchange, whether digitally or in the
analogue world, is almost impossible.
adhere to their own governance system, with
no convergence on a uni- or multilateral level.
resilience of digital Aggression dominates the tone on both sides Imperialism has returned, and both China
ecosystems as they stand on the verge of conflict.
Both China and Europe have cemented
and Europe compete to expand their
influence and widen their respective islands,
preconditions for dictatorships in the late particularly in Africa and Asia.
2020s, following an intense cyber war with The danger of instability is always lingering
disastrous consequences for both over both players´ heads, but there is also
governments and civilians. The world has potential for growth; massive cyberattacks on
become highly polarized. This has resulted in both China and Europe have led to the
the end of internet as we know it, and its understanding that change is necessary.
11Conclusions and
Outlook
The future of digital conflicts in
geopolitics will have wide-ranging
implications for public and private actors
and civil society in both China and the EU.
The four scenarios each describe of the private and public sectors or civil a meaningful exchange on all levels. The civil
radically different worlds. society organizations, but should trickle down society can be a powerful player here.
Yet, all four of them make one thing blatantly into wider society.
obvious: a close cooperation between China Naturally, the implications of the four
and Europe will be needed to deal with the Equally, to build positive relations successfully, scenarios go well beyond this. Implications
different challenges that lie ahead. traditional means will not suffice. In a should be analyzed and strategies formulated
digitalized world communication channels for each scenario. Common core policies
This cooperation will hinge not only on must be adapted to the new digital reality. applying to all four scenarios need to be
governmental activity, but also on private This means supplementing traditional means devised. This in itself will require the
sector action and the involvement of civil and points of interaction with new ones, for engagement of a diverse set of stakeholders.
society. Close diplomatic cooperation will be example by supplementing traditional forms Our scenario design process involved an
vital, but not in itself sufficient to prevent and of diplomacy with digital diplomacy. interdisciplinary panel of public, private and
solve future digital geopolitical conflict. civil society experts from both China and
Instead, relationships need to be built on the Both China and the EU need to be willing to Europe. A similarly diverse group needs to be
political, social and economic level. This understand political, social and economic included in the formulation of strategic
should not be limited to high-ranking officials specificities of the other, and aim at fostering options. This in itself is a first step towards the
12The future of digital conflicts in geopolitics - China and the EU | A scenario approach
crucial coordination that is a key strategic alternative futures. By capturing uncertainty development of the four scenarios,
necessity of all four scenarios. using scenario design, we can take a glimpse monitoring drivers and related indicators will
into four different possible stories of the be key to adapt to changing winds in the
These scenarios show a glimpse into four future. Of course, we do not expect one of journey across the scenario worlds. Only this
worlds that will be challenging to navigate. these to unfold exactly as described – the will enable stakeholders not only to react to
Whether this is the positive „Sophie´s World” future may lie somewhere in between. change, but to drive it proactively towards a
or the three darker scenarios “Collapse of the However, journeying into these four extreme positive future.
Digital Global Commons”, “Unsplendid Digital worlds will help stakeholders to define robust
Isolation” or “Cold War 4.0”, each scenario has but flexible strategies that enable them to Let's make our journey into the future a
its own individual friction stakeholders need cope with the uncertainties of today and positive one.
to face as the drivers underlying critical tomorrow.
uncertainties evolve.
This is not a one-time task. To ensure the
The complex interaction of the different validity of strategic options, current and future
critical uncertainties and underlying drivers developments must be carefully monitored.
that we defined could paint a myriad of Although this project focused on the
13Methodology
Introduction to scenario design and technological, economic, military, political/ interoperability of Chinese and European
methodology legal, and environmental factors. social and technological systems’ and ‘the
This study on the future of digital conflicts in sustainability of digital ecosystems’.
geopolitics is based on the seven-step In order to determine this study’s longlist of
scenario-design methodology of the Center drivers, we conducted detailed analyses with Having established the scenario matrix, we
for the Long View (CLV). It is the outcome of our AI- based research tool, CLV Deep View. then in a fifth step develop the four scenario
comprehensive research, expert interviews, Deep View uses proprietary natural language narratives. Scenario narratives define the
and a scenario workshop involving selected processing algorithms to read millions of data framework conditions and atmosphere of
experts from the private and public sectors sets with the aim of identifying patterns each scenario within the context of a story. By
and civil society from China and Germany, as between key words, phrases, people, using the previously identified drivers to
well as the Deloitte network and experienced companies, or institutions. This allows us to reverse-engineer the milestones that would
scenario practitioners from the CLV. gain a holistic understanding of highly lead to each future, we can determine the key
complex issues and interrelationships, as well elements for each scenario.
For this project, we focused on steps one to as to identify global trends. It also helps to
five, outlined below. The sixth step, the avoid the inherent bias of traditional research Then, in a sixth step, we use these scenario
consideration of implications and the methods. This longlist of drivers is then narratives to consider the resulting
formulation of strategic options, will be consolidated into a shortlist. For this project, implications for the stakeholders involved,
considered in more detail in additional this shortlist contained 104 driving forces such as the private and public sectors and
publications of the SWP. However, for the across all seven STEMPLE categories. civil society.
sake of completion, all seven steps of the CLV
scenario methodology will be explained In a third step, we prioritize and cluster the In a seventh and final step, we define key
below. identified drivers into critical uncertainties. indicators for each of the four scenarios to
This is necessary, as not all driving forces are enable the monitoring of trend
This process begins with the formulation of a uncertain. Some may be predetermined and developments. The aim of this step is to
focal question in order to determine the unlikely to develop in different ways across observe relevant developments in order to
project’s scope and strategic direction. The different scenarios. Thus, critical uncertainties establish which scenario the world is moving
focal question for this study was: What could must fulfill two criteria: firstly, they must have towards and to identify shifts from one
digital conflicts in geopolitics look like in 2035? a high impact on the outcome of the focal scenario to another one.
As a follow-on step, we then look at the question. Secondly, they must be highly
implications of that question: What role could uncertain or volatile. These critical
the EU, China and non-governmental actors uncertainties then serve as the building
have in solving them? blocks for the scenario framework.
As scenarios are a way of understanding the The scenario framework is developed in the
dynamics that shape the future, the second fourth step of our scenario design approach.
step of our methodological approach is the Following a correlation test, two critical
identification of drivers. Drivers are those uncertainties are selected by the expert
factors that have the potential to significantly group as the scenario matrix axes. The axes
impact the focal question at hand. These thereby form four highly divergent but
drivers can be grouped into seven categories, plausible scenario worlds. In our study, these
called the STEMPLE forces: social, two critical uncertainties are ‘the
14The future of digital conflicts in geopolitics - China and the EU | A scenario approach
Fig.2 – Seven step scenario approach of the CLV
7 Monitoring
1 Focal Question
6 Implications
& Options Seven Step 2 Driving Forces
Scenario
Development
Approach
5 Scenario
3 Critical
Uncertainties
Narratives
4 Scenario Frameworks
15Contacts Florian Klein Annina Lux Head of the Center for the Long View Scenario Practitioner Monitor Deloitte Center for the Long View Tel: +49 (0)69 97137 386 Tel: +49 (0)30 25468 5131 fklein@deloitte.de anlux@deloitte.de With special thanks to Maximilian Lobbes for his contribution. This communication contains general information only not suitable for addressing the particular circumstances of any individual case and is not intended to be used as a basis for commercial decisions or decisions of any other kind. None of Deloitte Consulting GmbH or Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/de/UeberUns for a more detailed description of DTTL and its member firms. Deloitte provides audit, risk advisory, tax, financial advisory and consulting services to public and private clients spanning multiple industries; legal advisory services in Germany are provided by Deloitte Legal. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s approximately 286,000 professionals are committed to making an impact that matters. Issue 03/2019
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