The Quad’s role in tech diplomacy
15 Feb 2023|

In 1943, Thomas Watson, the chair of IBM, famously said, ‘I think there is a world market for maybe five computers.’ Senior engineers at the corporation dismissed the future use of microchips.

Scepticism of emerging technologies is not uncommon and reflects a fear or misunderstanding of the new and unknown. But we are now on the cusp of a range of next-generation technologies that will shape our daily lives and add another dimension to shaping geostrategic settings.

There are increasing concerns for citizenry around data and information protection, cybersecurity, job security from the rise of artificial intelligence and so on. These developments are occurring at a rapid rate. According to a report by EY, ‘By 2030, the world will be entering the 6G era; an intelligently autonomous, sensory, massively distributed but highly networked world that blends our physical, digital and human systems.’

This has not only potential personal consequences, but also enormous geostrategic and economic implications. For defence planners, those effects may prove as critical as traditional military power projection. Technology is also driving innovation in industry not seen for decades, and the private sector needs to understand where its efforts are best placed given the strategic consequences.

The Quad partnership, comprising Australia, India, Japan and the US, has prioritised supporting and guiding this technological evolution to buttress investment in projects and technology consistent with its intent to maintain a free and open Indo-Pacific. This will require a concerted and coordinated effort between governments, industry, private capital partners and civil society.

Achieving the Quad’s goals will also require deepening and strengthening people-to-people links, building trusted professional networks, making policy and regulatory adjustments, and facilitating better information sharing. As a first step to developing a roadmap for cooperation, ASPI hosted the inaugural Quad Technology Business and Investment Forum in Sydney in December 2022, supported by the Australian Department of Home Affairs. The forum will become an annual Quad event and report directly to the Quad Critical and Emerging Technology Working Group.

The scope of the working group is, so far, fairly modest. It encourages a statement of principles on technology design, development and use; coordination on technology standards; cooperation on telecommunications deployment; diversification of suppliers; cooperation to monitor trends; and dialogues on critical technology supply chains. While discussions between government, the private sector and civil society on these issues is still at an embryonic stage, new links are being forged at conferences like the forum.

The future prosperity of nations will be determined by their ability to harness emerging technologies, particularly AI for automation and data analysis, and quantum computing. Quantum computing alone has the potential to revolutionise society by solving complex problems in seconds that would take the fastest supercomputer thousands of years.

Technology advancements over the past few decades now underpin national security and drive economic prosperity by creating new jobs, securing competitive manufacturing, improving our health and vaccination outcomes, increasing agricultural productivity, modernising our infrastructure and communications, enabling our energy transition, strengthening our defence forces and, most fundamental of all, preserving our democracy.

The challenge for the Quad is how best to coordinate investment between government and the private sector, and then coordinate that investment across the Indo-Pacific. Quad nations are in different parts of this technological evolution and have varying levels of existing cooperation.

The US and Australia are generally comfortable working together on technology development, whereas Japan and India have traditionally been more cautious about collaboration. Through a range of meetings and information-sharing exercises, the Quad is working to break down barriers and help governments better understand how differences can be harnessed as strengths rather than weaknesses.

While the US continues to lead development and innovation in AI and quantum computing, China is investing heavily in the sector to counter the emerging strategic competition between Quad members and their partners. US President Joe Biden is determined to maintain America’s strategic advantage in the emerging technology sector, especially AI, and has introduced a range of export restrictions as well as enhancing tech partnerships with trusted allies and friends, including Australia, Japan and India.

Japan’s Prime Minister Fumio Kishida has also committed his government to ‘think about national security from a variety of perspectives, not just force’. The Kishida administration looks set to take this to new levels in response to what former national security adviser Kitamura Shigeru has referred to as a ‘tectonic shift’ in the development and application of new technologies.

Keio University professor and special adviser to former prime minister Shinzo Abe (the father of the Quad) Tomohiko Taniguchi highlights that ‘investment in emerging technologies, such as AI and quantum computing, is becoming more critical for Japan, as is the need to collaborate with like-minded nations, including the Quad member nations’.

The Indian government has signalled that it will leverage hosting the G20 this year to help promote the need for a collaborative regulatory approach to and cooperation on emerging technologies. India is ranked eighth in terms of private investment in AI behind Europe, the US and China. However, a recent report published by Deloitte suggests that most Indian businesses plan to increase their AI investments.

The Australian government will focus on its strengths such as research and development, and training and education. It will also seek to take a leading role in the Quad emerging technologies architecture to ensure that critical technologies and their applications embody the principles that define Quad member nations’ values and allow them to uphold the rule of law and human rights.

As agreed by the Quad members in 2021, ‘a free, open, inclusive, and resilient Indo-Pacific requires that critical and emerging technology is governed and operates according to shared interests and values’. This is no small task, and governments, industry and investors all have a role to play.

Governments often find themselves on the back foot when it comes to innovation, especially when market competition and consumer protection are tested by technological growth. But governments are critical to the development of new technologies through their support for initiatives and the creation of conducive environments for innovation and investment. Governments also set regulatory frameworks, assist with seed funding support for emerging technologies and facilitate private capital investment through public–private partnership arrangements and investment match-funding.

The private sector is essential in bringing new technologies to the market. It is the private sector that must identify, evaluate and carry forward the best ideas to commercial outcomes. Businesses, entrepreneurs and investors turn innovations into the products and companies that change the world.

Innovation is also critical for the private sector in terms of competitiveness, and is the key to success for private businesses, helping to cut costs, improve products, open new markets, and improve digital fluency and skills development.

Finally, there is the capital required to take start-up emerging technologies and scale them up at the rate required for large government-endorsed programs and initiatives. Private-sector capital will be central to this success as governments won’t have the money to fund everything. However, venture capitalist firms need support to help identify the best areas for investment and incentives to invest through government funding support.

Perhaps a first step to help align the three sectors is the development of an investor prospectus for emerging technology that highlights investment opportunities across the Quad and then develops a mechanism for collaborative investment. This is just one practical solution to help build co-created, co-designed and co-funded Quad initiatives.

Having a bold vision of this future will help companies streamline investments today and chart a transformation roadmap for tomorrow.

Few countries have the resources to be competitive in all technologies that might be critical to their national interest. Some technology cooperation is easier—and has a longer history—in bilateral or trilateral settings. It will take astute policymakers to marry together our trade agenda with domestic industry and innovation policy—but things are moving quickly and the time for action is now.