Tech to the global economy: Let's stay together

How the next wave of technology is upending the global economy and its power structures

Jan 06, 2023 View in browser   By Derek Robertson With help from John Hendel Consumer Technology Association | The show floor being set up at 2023's CES. LAS VEGAS — Attendees at this year's CES are sharply attuned to the sea change of the past several years in America's approach to trade and manufacturing. It makes sense: Everyone at the country's largest consumer-tech conference, from device manufacturers like Bosch and Panasonic to software developers, makes something. Their businesses are dependent on the dizzyingly complex trade network that underpins the global supply chain. So when politicians decide to reroute that network's pathways in order to bolster domestic industry it matters, a lot. The glossy, future-focused tech industry has become the center of some old-school policy ideas about supporting American business. "We're seeing the emergence of a desire for what some people term 'industrial policy'," said Ana Meuwissen, director of government affairs at the Germany-based Bosch, during a morning panel titled "Trading With Friends — What Does It Take To Be a Trade BFF?" "I don't think that any of these actions are being done in a way to alienate allies, but to address what are identified as critical national priorities, gaps or vulnerabilities." She was seeking, in a way, to soothe transatlantic anxieties that the Biden administration might be treating Europe more as a competitor than an ally. But of course an even bigger question looms over this whole issue:  The "elephant in the room," as one questioner put it to the panel, in China — a country whose "ally" status remains for many uncertain at best. In Washington, rhetoric about a "new Cold War" or "decoupling" from China's economic influence can sometimes fly fast and free. But for the companies whose bottom lines depend on China's heavyweight status both as a consumer and producer in the global economy, it's not that simple — something Acting Assistant U.S. Trade Representative for Industry Sushan Demirjian acknowledged today on the same panel. "We're not alone in this global situation where things are changing," Demirjian said. "It's not clear where things are going, and I think our partners are in the same place." She pointed specifically to the importance of the kind of critical minerals largely mined in China, calling it "an area where a lot of the issues related to the availability of technology, sustainability, forced labor and worker issues are all coming together in ways that I know the industry and the USTR had not anticipated or fully appreciated." On the industry side, this kind of talk raises some significant alarm bells. In an interview with POLITICO's John Hendel at the Venetian this morning, Information Technology Industry Council CEO Jason Oxman had a stern warning for those who think a return to WWII-era "Made in America" culture is worth pursuing, or even possible. "I feel the dialogue both within the administration and in Congress has focused on well, how can we just decouple from China? And we can't, and we don't want to," Oxman said. "It's a country of 1.3 billion consumers, a lot of manufacturing takes place there. U.S. companies should be allowed to invest in China because we want the innovation that takes place in China to come back to the U.S." While the American companiesbenefiting from these new policies might disagree, there's another group that sees itself as a winner, if not with some reservations: American labor. I spoke this morning with Amanda Ballantyne, the director of the AFL-CIO's Technology Institute, on the heels of a labor-centric tour through CES that included the federation's president Liz Shuler, UNITE HERE president D. Taylor and Deputy Secretary of Labor Julie Su, among others. "I think it's a tremendous, important trend to be onshoring, and to be conscious about developing these industries," Ballantyne told me. "We need this kind of technology and industrial policy, and we need rigorous planning around how to develop these competitive industries, and it's critical that labor be a core component of that." While labor and American industry cheer, Bosch's Meuwissen took care to point out that the U.S.' "decoupling" efforts haven't had an entirely cold reception overseas, either — with the European Union looking warmly at the passage of the CHIPS and Science Act and considering similar action of its own. The ripple effects of America's newly muscular approach to industrial policy are slowly, but acutely, making their way through the global economy. If the talk at this year's CES is any indication, tech is likely to remain at its exact epicenter. around the block Despite the crypto world having a rough go of it this year, one of the blockchain's biggest boosters on the Hill is bringing good tidings to the desert at this year's CES. Thursday was a full day of crypto-related programming at the Las Vegas Convention Center, and at its end I sat down with Kristin Smith, CEO of the Blockchain Association, to chat about where the technology fits into the overall tech (and tech policy) landscape, what she thinks is next for it in 2023, and what the possibilities for crypto legislation in a new Congress might be. How do you think blockchain fits into CES? There are two threads here, but they end up converging: One is the upgrading of financial infrastructure, which I think is what most people think of when they think of crypto. But the other piece of it is upgrading our internet infrastructure and the internet experience, and doing that in a way that empowers individuals to have ownership over money, data, and other assets in digital worlds. A lot of the challenge that we have, maybe not so much with the tech community here at CES, but definitely in Washington, is getting policymakers and others in the public to be able to look ahead and imagine a better experience than they have today online. Bringing digital ownership to the internet is a foundation for all sorts of innovation. It hasn't been the most positive news cycle for crypto. During the last panel they kept referring cryptically to "the recent events." FTX was never a member of the Blockchain Association. We had very different strategic paths, and it was very clear that the reason we had those differences is because the values of FTX compared to the Blockchain Association's members were very different. The silver lining is that we don't have to worry about those guys anymore. We just have to clean up their mess. What's great about CES is that it's a positive way to start the year, being around all of these innovators that are thinking about the future — what does the metaverse mean? Can I own assets in the metaverse? How do I access it? Can I help build it? How are Web3 and AI going to work together with different devices? It's fun to think outside the box. What do you think this Congress has in store for blockchain? We're going to be spending a lot of time in the first half of this year doubling and maybe tripling down on the amount of education that we're doing. If you'd asked me like a year ago, I would have said 2023 is the year legislation is going to get done. Now, I think that because of what happened [with FTX] it actually slows down the process, not accelerates it, because there are so many more policymakers that actually want to be involved. Before it was sort of a niche thing, and a small group could hash it out. That's not the case anymore. radio days The automobile has emerged as a standout focus of CES 2023, from the keynotes from BMW and Sony executives touting their tech-savvy and digitally connected vehicle ambitions early on Tuesday night to the nearly 300 exhibitors devoted to auto innovation in the show's West Floor. BMW went so far as to muse about a futuristic talking car's "digital soul." (Have they not read Stephen King?) But one of the older forms of communications tech is also at stake — local radio, which for more than half a century has been a natural companion for any driver. As the car transforms for the future, with an explosion of internet-powered music streaming and other entertainment options, broadcasters want to be sure there's still a spot for the good old car radio. "We need to make sure that amidst all those innovations, all of those consumer benefits, the safety considerations, that local broadcast remains a prominent feature in these automobiles," National Association of Broadcasters CEO Curtis LeGeyt told me in the Las Vegas Convention Center this week. "The benefit to the automaker is that we remain the information source that listeners want to tune to when they need that locally focused information." And besides, local radio is free — and not all new tech offerings can make that claim. LeGeyt, who leads one of Washington's heavyweight lobbying trade groups, is at the conference alongside radio executives to make the case to automakers that local radio should still be part of this new digitally connected driving experience that he remarks is "increasingly screen-driven." He also wants his member companies to see firsthand the type of auto innovation on display, so they can better understand how to position themselves for the future. Policymakers are also watching and care , LeGeyt added, citing a recent letter from Sen. Ed Markey (D-Mass.) about making sure AM radio stations remain a feature in electric vehicles. (There's concern that AM radio signals could interfere with current EV operations, absent mitigation tech.) For his part, the lobbying chief remains wary of a possible future in which local radio is cut out, but maintains optimism about the medium's role and benefits. "Our job is to be paranoid," LeGeyt added. "What's important though, is that the automakers understand that data and that they have got it front and center. Because if they do, it's a no-brainer to include our product in the automobile." — John Hendel tweet of the day the future in 5 links The war in Europe is driving big investments in futuristic defense tech. OpenAI is in talks for a $29 billion valuation. …And it's also working to help schools identify ChatGPT-generated text. Meet the researcher who dares to speak the "c-word" in AI development. How do you provide management training to an algorithm? Stay in touch with the whole team: Ben Schreckinger (bschreckinger@politico.com); Derek Robertson (drobertson@politico.com); Steve Heuser (sheuser@politico.com); and Benton Ives (bives@politico.com). Follow us @DigitalFuture on Twitter. If you've had this newsletter forwarded to you, you can sign up and read our mission statement at the links provided.   Follow us on Twitter Ben Schreckinger @SchreckReports Derek Robertson @afternoondelete Steve Heuser @sfheuser Benton Ives @BentonIves   Follow us

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