World Economic Forum Tackles The Future Of The Internet

Who runs the Internet? Up to now the private sector has exerted the most influence, but some countries are moving to take control and fracture the Internet, undermining its usefulness and its democratizing energy, while hacktivists, criminals and terrorists make divulging personal information, conducting government affairs and doing business online ever more dangerous. So it is no surprise that the future of the Internet was a big focus at the World Economic Forum’s annual meeting in Davos.

The World Economic Forum has long served as a neutral platform for politicians: for example, the "Davos Declaration," which prevented a war in Greece and Turkey, was signed by the two countries in Davos in 1988. Now the Forum is trying to head off a very different kind of war. “The Internet is under siege,” Alan Marcus, the World Economic Forum’s senior director, head of Information Technology and Telecommunications Industries, said in a interview with Informilo in Davos.

Here's why:

  • There is real fear that the United Nations will make treaty changes during a planned 2014 plenipotentiary meeting that would give it unrestricted jurisdiction over the Internet. Such a change could allow repressive regimes to fracture the Internet, curtailing innovation and the global network’s openness and usefulness.
  • Cloud computing and big data could create between $ 9.6 trillion and $21.6 trillion in value for the global economy, according to a new report released by the World Economic Forum in collaboration with McKinsey & Company during the annual meeting. However, if attacker sophistication outpaces defender capabilities — resulting in more destructive attacks — ineffective regulations and corporate policies could slow innovation, with an aggregate impact of approximately $3 trillion by 2020.
  • Without transparency and the proper rules and tools, violations of data privacy could lead to a backlash by consumers. In a 2013 survey of the Internet populations across 11 countries 68% of respondents said they would select a “do-not-track” feature if it was readily available, according to consultancy Ovum’s new report “Personal Data Futures: The Disrupted Ecosystems.” This hardening of consumer attitudes, coupled with tightening regulation, could diminish the supply of personal data, undermining not just the Internet economy but the big data analytics that could be used to help solve some of the world’s most pressing problems.

There is an increasing recognition by both government and business leaders that collaboration will be required not just between governments but across industries to tackle these issues. That’s why the World Economic Forum has created Hyperconnected World, a cross-industry umbrella platform to help business and government leaders come to grips with the social, economic and political consequences of digital technology.

With everything from crucial infrastructure to governments, businesses and individuals relying on connectivity to function, the stakes have never been higher. By 2020 there will be 50 billion networked devices and, the Forum notes, “such connectivity will increasingly be part of our everyday life, from cars we drive, pills we take, clothes we wear and media we consume to how we work and how countries are governed. ”

The Hyperconnected World platform links a variety of World Economic Forum projects, including cyber resilience and rethinking personal data. Approximately 20 public and private sessions were devoted to hyperconnectivity issues at this year's meeting in Davos, attracting the participation of heads of state and legislators as well as top executives from a wide variety of sectors, including energy, luxury goods, food, financial services and the automotive industry.

As governments try to come to grips with the changes hyperconnectivity is bringing about, the question of who controls the Internet is taking center stage.

To the great frustration of the international community, ICANN, a private company under contract to the U.S. government to oversee the technical aspects of the Internet’s address system, has been in a position of power since its formation in 1998, deciding such issues as when languages could be used as a communication tool by other nations. The U.S. government gave a two-year contract to ICANN in 1998 and was supposed to withdraw its support when the contract expired. But the U.S. has not done so.

The U.S. government wants the Internet to continue to be coordinated and led by the private sector. But many countries do not agree with the argument that the United States has no control or that ICANN adequately represents the Internet’s global interests.

China, Russia, India, Iran and Saudi Arabia are among the countries pushing to give the International Telecommunication Union, a U.N. agency, regulatory jurisdiction over Internet governance. Some of the ITU’s member countries have been tirelessly promoting this approach since 2003. The effort did not make much headway until a meeting in Dubai in December 2012 which effectively ended international consensus to keep intergovernmental hands off the Internet. The 2014 Plenipotentiary vote will decide the ITU’s mandate for years to come, which could include unfettered jurisdiction over the Internet’s operations and content.

“One potential outcome that could develop if pro-regulation nations are successful in granting the ITU authority over Internet governance would be a partitioned Internet,” Robert M. McDowell, then the U.S. FCC Commissioner, said in a 2012 statement to Congress. “In particular fault lines could be drawn between countries that will choose to continue to live under the current successful model and those member states who decide to opt out to place themselves under an intergovernmental regulatory regime. A balkanized Internet would not promote global free trade or increase living standards. At a minimum, it would create extreme uncertainty and raise costs for all users across the globe by rending an engineering, operational and financial morass.”

There is real fear and a real danger that the Internet could be fractured, says Marcus, so the topic will be a priority at an upcoming event of the World Economic Forum in Dubai in early May. An independent panel on Internet governance and mechanisms is expected to announce an alternative multi-stakeholder proposal on future governance at the meeting.

Cyber security will also remain at the top of the agenda in 2014. Israeli Prime Minister Benjamin Netanyahu even mentioned its importance during a speech at a private Shabbat dinner in Davos on January 24th.

Failing to improve cyber resilience could not only have serious security implications for governments, businesses and consumers, it could cost the world economy and lead to more frequent cyber attacks, according to the report released in Davos by the World Economic Forum in collaboration with McKinsey.

Despite the emergence of new technologies such as bit-splitting, participants in a closed session on cyber resilience in Davos on January 24th were told that the arms race is likely to continue through the foreseeable future.

In the next six years annual spending on cyber resilience is likely to rise, from $69 billion in 2013 to $123 billion in 2020. But the extent of the increase and the return on investment will vary, according to the report. In the best-case scenario, spending will swell by 13% to $139 billion annually as public and private sectors lift defensive capabilities. In the worst-case scenario, in which $3 trillion of potential economic value is unrealized, global spending nonetheless climbs 28% to $157 billion annually, as attacks increase and governments force compliance with increasingly complex regulations.

In an interview in Davos with Informilo James Kaplan, who leads McKinsey's practices in IT Infrastructure and cyber-security, said companies need to get smarter about cyber-security: they should:

  • not protect all assets at a similar level;
  • deeply integrate rather than bolt on security;
  • create an active defense so that the company can respond to emerging threats in real time;
  • engage in war games so that the company is ready to deal with attacks from a technological point of view but also to prepare for how it would like to communicate about breaches to clients and the general public; and
  • engage the help of a targeted number of front-line personnel.

But steps by individual companies will not be enough. The report says that almost all chief information officers interviewed believe a broader cyber resilience ecosystem must be put into place that includes enterprise users of technology, technology providers, regulators and law enforcement.

The World Economic Forum is aiding collaborative efforts through a “partnership for Cyber Resilience” framework which was first launched in 2012 to help business leaders build effective cyber-risk management platforms. The tool offers a rough composite score to help businesses assess their readiness.

And in Davos it organized a private meeting with businesses across a variety of sectors and tech and industry leaders to further thinking about balancing security and privacy.

Marcus notes that building secure systems requires trade-offs in areas such as growth, innovation and the free flow of goods and data. That is why the Forum is working with industries and governments to ensure that the right tools and rules are in place to both provide adequate security and ensure the free flow of data.

The forum is in a unique position to give all players a voice in shaping the future of the Internet, says Marcus. “Hyperconnectivity fundamentally redefines how individuals, enterprises and governments interconnect and relate. It provides new models for innovation and new opportunities for growth but also introduces new risks that need to be managed and mitigated.”

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