2023 Digital Predictions

In 2023, we will revisit the “1998 deals”, which laid the foundation for current Internet/digital governance. After 25 years, we can see which governance arrangements have stood the test of time and which need to be altered to reflect the Internet’s evolution from 147 million Internet users (3.6% of the world’s population) in 1998 to 5.473 million Internet users (69% of the world’s population) in January 2023. 

In the digital governance timeline, 2025 is the next important year in the digital governance timeline when the WSIS arrangement will be revisited and UN PoA in the wider context of using digital tools for the ‘mile’ for the realisation of the Agenda 2030 and 17 SDGs. An important stop on the way to 2025 will be the adoption of the Global Digital Compact during the UN Summit of the Future, to be held in 2024. 

In 2023 predictions, you can read on digital geopolitics, vulnerability of submarine cables, next steps in digital cooperation, challenges for data governance, cybersecurity and much more.

2023 marks a quarter of a century since much of today’s digital governance structure was set.  The ‘1998 internet governance architecture was developed in a few months:  in September, Google and ICANN were established; discussions under the UN ‘information security’ track that led to UN GGE and OEWG were initiated; the WTO placed itself a player in the discussions of economic aspects related to the digital economy, notably with the adoption of the moratorium on customs duties on electronic transmissions. In November,  ITU Plenipotentiary conference in Minneapolis decided to host the World Summit on Information Society, initiating a process of digital policy discussions which is active today with the work of the IGF and WSIS Forum.  

Currently, there is growing pressure to reform this architecture by creating mechanisms to make decisions and recommendations on digital policy issues (potentially through a strengthened IGF), by creating holistic mechanisms of global data governance, by preserving and advancing the shift towards more inclusive cybersecurity discussions, and by avoiding fragmentation trends in the digital economy, currently being brewed by disparate national laws, or by trade agreements which do not include a large number of developing countries and LDCs. 

How to get the most out of these predictions?

1. Technologies: less hype – more impact

2023 won’t start with the ‘next big thing’ in the tech sector. Last year in January, it was Web 3.0, which during the year lost momentum with the slow take-off of the metaverse and crypto crisis. Only AI kept steady momentum out of 3 leading Web 3.0 technologies.

Quantum computing, one long-term technology, will likely enter in ‘quantum winter’ with less investment enthusiasm.

As tech development slows done in 2023, it will be the right moment to discuss digital governance and our overall digital future.

2022 started with a big promise of Web 3.0, combining metaverse, blockchain, and AI in a decentralised network. Enthusiasm for a new type of web started losing momentum towards the end of the year. 

Search for term ‘metaverse’ on Google in 2022 (Source on Google Trends)

Metaverse is not taking off as envisaged by Meta company, formerly Facebook, which centred its future business model around Metaverse. An initial monthly target of 500.00 active users on Horizon Worlds – Meta’s metaverse platform – was reduced to 280.000 new users. Currently, there are fewer than 200,000. Out of all socialising, play, and workspaces on Horizon, only 9% have more than 50 visitors, while some of them have never visited. 

Slow take off of metaverse is a temporary slow down. Metaverse or virtual/extended/augmented reality is here to stay. In addition to Meta, Microsoft, Apple, and Google are investing heavily in metaverse applications and tools. A new generation of users with gaming experience will dominate the internet population in the coming years. Thus, 2023 will be the year of background developments and regrouping ahead of future growth in this field. 

Linkage: Digital identity, Metaverse standardisation

Blockchain lost momentum with a negative spillover from the recent cryptocurrency market.  How the technical capabilities of blockchain technology can be abused to achieve the exact opposite of the proclaimed benefits is vividly demonstrated by the demise of FXB and the subsequent collapse of bitcoin. FXB harmed bitcoin’s credibility. 

Blockchain technology’s potential for decentralisation can be easily transformed into centralised control by those who control access to blockchain platforms and systems.  

Blockchain enthusiasts often list the following use cases:  a supply chains, financial transactions, verifying identities, electronic medical records, conducting elections, and real estate transactions. Blockchain technology has technical promise. Whether or not these possibilities materialise in 2023 is still up in the air.

AI is gaining maturity both in the realisation of AI potentials and governance. At the end of 2022, ChatGPT attracted a lot of attention with new possibilities for generating texts and images. In this spirit, in 2023, AI will have to move towards productive use (see Gartner hype cycle). Crossing this bridge for AI will require less technology and more organisational and management changes for optimal interaction between humans and machines.

Metaverse and blockchain will lower in visibility. Quantum computing, one long-term technology, will likely enter in ‘quantum winter’ with less investment enthusiasm. As the tech sector will take one step backwards, it will be the right moment to discuss digital governance ad our overall digital future.

Quantum computing has raised a lot of interest, but all promises are far from being realised. ‘Quantum winter is coming’ according to Sabine Hossenfeider, who said:  ‘This buble of inflated promises and eventually burst. It’s just a matter of time.’

2. Digital geopolitics: from submarine cables to semiconductors and free flow of data

The underlying question is if geopolitical tensions will accelerate internet fragmentation in 2023. The China-USA digital rivalry will certainly continue. The main question is at what level of internet fragmentation will accelerate from submarine cables to tech platforms. Many countries will have to navigate the interplay between digital interdependence and sovereignty. Some new developments may strengthen internet infrastructures, such as IBSA Digital momentum and UN digital cooperation.

There are no signals of easing digital geopolitical tensions in 2023, especially between the USA and China. As the Economist argues, ‘The tech war between America and China is just getting started’. The main test in relations between the USA and China will be the status of TikTok in the USA.

In the worst scenario, these tensions could trigger the fragmentation of the internet. In the most likely scenario, it will be a series of small tensions that will deteriorate digital flows. The Ukraine war will increase divides further. 

Sovereignty will remain high on the agenda in 2023, framed in different ways as digital, data, AI, or cyber sovereignty. The push for digital sovereignty will be motivated by governments’ drive to have legal jurisdiction over digital activities on their territory and to reduce negative spillovers from integrated digital networks.

However, full sovereignty will be much more difficult to achieve in the digital realm due to the internet’s networked nature and the tech companies’ power.

Approaches to digital sovereignty will vary, depending on a country’s political and legal systems. Legal approaches include national regulation and court judgements, while technical ones can vary between data filtering and total internet shutdowns. 

The term sovereignty will also be used more often in the context of digital self-determination of citizens and communities, mainly related to control over data and future AI developments. 

Digital interdependence will continue to be tested in 2023. It is supported by a strong drive of citizens, companies, and countries to be connected across national borders. Digital interdependence can even survive wars. During the Ukraine war, many interdependencies between the two countries were cut. However, it is still possible to exchange messages between Russia and Ukraine via the internet. 

still can exchange messages via the internet. due to can be witnessed in very practical and tangible ways, from families communicating across continents via instant messaging and voice-over-IP (VOIP) services such as WhatsApp and Viber to using Amazon and Alibaba for online trade and shopping. 

Protection of submarine cables, the semiconductors industry, and data flows will play an important role in digital geopolitics in 2023.

Submarine cables are the most vulnerable part of global digital infrastructure. A major disruption of internet cables, as happened in the past, could cut countries from the internet. As happened with the North Stream gas pipeline, more than XXX submarine cables on the ocean seabed can be easily disrupted. While possibilities for physical support are limited by sophisticated new generations of submarines operated by naval powers, there is surprisingly little legal protection for this critical infrastructure of modern society. Satellites, which may offer some comfort but can’t replace fibre in its role as a global backbone, have also been shown to be susceptible to geopolitics (from the hacking of ViaSat to Musk’s caprice).

Semiconductors are at the centre of the geopolitical battle between the USA and China. The process of reducing China’s access to cutting-edge microchips and technology for their production started with President Trump and continued with the Biden presidency. China will require years to grasp technology for the production of the sophisticated microprocessor of a new generation. These geopolitical tensions will have a few side impacts. First, Taiwan, with its TSMC as the main manufacturer of microchips, is in the centre of the China-US tension. Second, the USA, Europe, and India started ‘reshoring’ of semiconductors industry on their territory in order to avoid future vulnerabilities, especially in the case of the Taiwan war or economic blockade. The USA will invest 280 billion dollars in domestic research and production, both through boosting Intel’s capabilities and setting up TSMC factories; Europe’s Chips Act looks at mobilising close to 50 billion Eur in public and private investments in production, research and innovation.  You can consult more on geopolitics and semiconductors. 

Data flows will shape emerging geopolitics. An overall trend is that countries will try to preserve more and more data on their territory, especially critical data such as health records and digital identities of citizens. Many countries will have to strike a trade off between data sovereignty and integration in the global economy. The more data they keep nationally, the less they can benefit from the international digital economy and growth. Free flow of data will be essential for a small and export-oriented economy. Data sharing will be critical for dealing with global issues such as climate change. At the same time, locally collected and processed data can enable innovations related to AI and open data services on national or regional levels, possibly eating into the revenue cake of some big tech. Dive deeper: Data governance

Position of the main actors

In 2023, geopolitical tensions between China and the United States will continue following the trend of the previous few years. The main tensions will be on China’s access to semiconductors technology and telecommunications infrastructure for 5G, where Huwaie still has leadership but is being challenged by the open 5G architectures known as OpenRAN. A new crisis could be triggered by the status of the Tik-Tok platform, owned by a Chinese company,  which gained much popularity worldwide. 

The Indian presidency of the G20 presidency could mark IBSA Digital Momentum, which can spread over 3 years during subsequent G20 chairmanships. of India (2023), Brazil (2024) and South Africa (2025). India will also chair SCO Summit in 2023

Digital cooperation has a chance for a new start with negotiations of the UN Digital Compact, a new leadership of ITU, and Geneva dynamics. 

Sweden and Rwanda will be an interesting bridge between global and regional negotiations. In addition to being co-facilitators of the UN GA process on Digital Compact, the two countries have a prominent regional role. Sweden will chair the Council of the EU for the year’s first half. Rwanda is involved in most digital initiatives at the African continent. 

In 2023, new dynamism is expected in Africa with major digital actors strengthening or initiating new initiatives and projects.

3. Start of IBSA Digital momentum around development, democracy, diplomacy

India, Brazil, and South Africa (IBSA) are democracies and developing economies with a vibrant digital scene. They are strong supporters of multilateral and multistakeholder approaches with many examples of inclusion in the digital governance of the tech community, academia, the private sector, civil society, local communities, and other actors.  Can India, Brazil and South Africa foster new digital governance dynamism around their shared 3d priorities: development, democracy, and diplomacy?

In 2023, India will start chairing G20, followed by Brasil (2024) and South Africa (2025). The three countries – which collaborate via the IBSA Forum – are likely to play a prominent role in the process of reforming digital governance. 

Three keywords – development, democracy, diplomacy – can shape IBSA Digital Momentum. India, Brazil, and South Africa are developing economies from the Global South with functional democracies and support for mulilateral diplomacy. 

Development 

Digitalisation is the engine of growth in IBSA economies.  India is a leader with vibrant outsourcing and digital economy. 

IBSA countries use digitalisation to address development problems. They have major digital divides in countries. They also embrace future issues such as daata governance

The three countries also face major societal tension exacerbated by digitalisation, including the digital divide, inequalities, and the need to have digital governance that will reflect local cultural, political and economic specificities. In IBSA countries, future digital growth will happen due to the big and young populations and economic dynamics.

On digital inclusion, three countries have been involved in ‘cable inclusion’ (technical infrastructure) towards holistic inclusion of ensuring that their societies can benefit from the Internet by making it affordable to citizens to digital skills and governance framework. For example, Aadhar is seen by many as a successful digital identity initiative, inspiring similar systems in other countries. South Africa has been a leader in the inclusion of women and youth. Brasil focuses a lot on other marginalised groups from people with disabilities to indigenous people. 

On data, IBSA embraces the free flow of data as the basic principle. For India, with a strong ICT sector, it is a vital economic principle. However, all three countries argue for data sovereignty over critical data for governments and citizens. With a big population, they also see data as their national resource. It is precisely in this nexus between the free flow of data and data sovereignty that the next data governance deal will be made. 

Democracy

India, Brazil, and South Africa are functional democracies with regular elections and a vibrant civil society scene. In India, civil society action with 1 million signatures preserved net neutrality and stopped Facebook’s  ‘Free Basic’ project. Brazil has pioneered a unique national multistakeholder model around the Internet Governance Steering Committee (CGI.br). India hosted one of the biggest initiatives. South Africa made major successes in youth and female inclusion in digital processes on a national level. 

IBSA countries also have to deal with digital aspects of societal and political problems. India had the most Internet shutdowns in 2022 according to XYZ. Brazil has witnessed major misuse of social media platforms in elections. South Africa experiences most online women violence.

South Africa has been one of the critical actors since WSIS 2005. India and Brazil hosted the Internet Governance Forum. Both countries strongly support policy inclusion of academia, civil society, business and other significant actors.  Brazil hosted the 2014 NetMunidal meeting, a unique experiment in multistakeholder decision shaping. India’s civil society staged one of the most prominent citizens’ protests on net neutrality when one million citizens petitioned to stop tech companies from providing limited internet access to unserved regions.

Diplomacy

India, Brazil, and South Africa are supporters of multilateral diplomacy. They have coalition and conveying capacity as they are members of various international coalitions, processes, and organisations. They can also bring wider regional and global partnerships by involving countries sharing similar digital strengths and dilemmas. Many countries share IBSA strengths and challenges, such as Indonesia and Singapore in Asia, Mexico and Argentina in Latin America, and Nigeria, Kenya, and Rwanda in Africa. IBSA dynamism could resonate well with many digital priorities of EU, Switzerland, Turkey, Canada, New Zealand, and Australia, which are, for example, looking to enhance digital autonomy, promote a more fair division of benefits of the data economy and encourage the creation of data infrastructures.