First published in FEED, 8/11/99.

Fritz Hollings, Senator of South Carolina, and Zhu Rongji, Premier of China, have the same problem — the internet has made their governments too small. In Mr. Hollings’ case, ecommerce is threatening to damage South Carolina’s local tax base, while Mr. Zhu is facing threats to the Chinese Communist Party from dissident web sites in other
countries. They have both decided to extend the reach of their governments past their current geographical boundaries to attack these problems. The final thing the senator and the Premier share is that their proposed solutions will accelerate the changes they are meant to postpone — you can’t fight the effects of the internet without
embracing it, and you cannot embrace it without being changed by it.

Fritz Hollings’ problem is simple — states can collect taxes on local sales but not on ecommerce, because ecommerce has no respect for locality. His proposed solution is equally simple: a 5% national ecommerce tax (the “Sales Tax Safety Net and Teacher Funding Act”) to collect money at the Federal level and funnel it into state “subsidies” for teachers salaries. Unfortunately for him, “No Taxation Without Representation” cuts both ways — education policy is one of a state’s most important functions, and a Federal education tax opens the door for a Federal education policy
as well. If Hollings is worried about loss of state power, extending the states’ reach to the level of national taxation is a good short-term solution, but in the long run it will worsen the problem — states who defend their autonomy will watch the internet erode their revenue base, but states who defend their revenues will watch the internet erode their autonomy.

Zhu Rongji’s dilemma is more complicated, but no less stark — China’s communist party is vulnerable to international dissent because political web sites have no respect for national borders. Shortly after the Chinese government banned the Falun Gong sect for “jeopardising social stability,” China’s Internet Monitoring Bureau attacked Falun Gong web servers in the US and UK. The People’s Liberation Army newspaper called this action a “struggle in the realm of thought,” indicating that China now respects no national borders in its attacks on dissent. During the Kosovo crisis, China argued loudly for non-intervention in the affairs of other countries, but these attacks on foreign web servers tell a different story — non-interference in a connected world is incompatible with a determination to stifle dissent. The Falun Gong attacks will help
protect the Communist Party in the short term, but by demonstrating to future dissidents how afraid the Party is of the web it makes them more vulnerable to the winds of change in the long haul.

Governments, like companies, are being forced to respond to the increasingly borderless movement of money and ideas, but unlike companies they have no graceful way of going out of business when they are no longer viable. In place of mergers and bankruptcy, governments have wars and violent overthrows — governments will do anything to avoid closing up shop, even if that would be better for the people they are meant to serve. This makes governments more successful than businesses in fighting change in the short term, but in the long run, governments are more brittle and therefore more at risk. Zhu Rongji and Fritz Hollings have both adopted old men’s strategies — preserve the
present at all costs — but postponing change will heighten its force when it does come. In another five years, when the internet has become truly global, the damage it will do to things like South Carolina’s tax base and the Chinese Communist Party will make it clear that Messr’s Hollings and Zhu are trying to put out fire with gasoline.

7/7/1999

The 21st Century is going to look a lot like the 19th century, thanks to the internet.
A recent study in the aftermath of the Asian financial storm (“Beyond The Crisis –
Asia’s Challenge for Recovery,” Dentsu Institute for Human Studies) found that citizens of Asian countries who speak English are far more likely to be online than those who don’t. The study, conducted in Tokyo, Beijing, Seoul, Bangkok, Singapore, and Jakarta, found that English speakers were between two and four times as likely to use the internet as their non-English speaking fellow citizens. Within each country, this is a familiar story of haves and have-nots, but in the connections between countries something altogether different is happening — the internet is creating an American version of the British Empire, with the English language playing the role of the Royal Navy.

This isn’t about TCP/IP — in an information economy the vital protocol is language,
written and spoken language. In this century, trade agreements have tended to revolve around moving physical goods across geographical borders: ASEAN, EU, OAS, NAFTA. In the next century, as countries increasingly trade more in information than hard goods, the definition of proximity changes from geographic to linguistic: two countries border one another if and only if they have a language they can use in common. The map of the world is being redrawn along these axes: traders in London are closer to their counterparts in New York than in Frankfurt, programmers in Sydney are closer to their colleagues in Vancouver than in Taipei. This isn’t an entirely English phenomenon: on the internet, Lisbon is closer to Rio than to Vienna, Dakar is closer to Paris than to Nairobi.

This linguistic map is vitally important for the wealth of nations — as the Dentsu
study suggests, the degree to which a country can plug into a “language network,”
especially the English network, will have much to do with its place in the 21st century
economy. These language networks won’t just build new connections, they’ll tear at
existing ones as well. Germany becomes a linguistic island despite its powerhouse
economy. Belgium will be rent in two as its French- and Flemish-speaking halves link
with French and Dutch networks. The Muslim world will see increasing connection among its Arabic-speaking nations — Iraq, Syria, Egypt — and decreasing connections with its non-Arabic-speaking members. (Even the translation software being developed reflects this bias: given the expense of developing translation software, only languages with millions of users — standard versions of English, French, Portuguese, Spanish, Italian, German — will make the cut.) And as we would expect of networks with different standards, gateways will arise; places where multi-lingual populations will smooth the transition between language networks. These gateways — Hong Kong, Brussels, New York, Delhi — will become economic centers in the 21st century because they were places where languages overlapped in the 19th.

There are all sorts of reasons why none of this should happen — why the Age of Empire shouldn’t be resurrected, why countries that didn’t export their language by force should suffer, why English shouldn’t become the Official Second Language of the 21st century — but none of those reasons will matter. We know from the 30-year history of the internet that when a new protocol is needed to continue internet growth, it’ll be acquired at any expense. What the internet economy demands more than anything right now is common linguistic standards. In the next 10 years, we will see the world’s languages sorted into two categories — those that form part of language networks will grow, and those that don’t will shrink, as the export of languages in the last century reshapes the map of the next one.

Published in ACM, 12/1999.

The 21st Century is going to look a lot like the 19th century, thanks to the internet. A recent study in the aftermath of the Asian financial storm (“Beyond The Crisis – Asia’s Challenge for Recovery,” Dentsu Institute for Human Studies) found that citizens of Asian countries who speak English are far more likely to be online than those who don’t. The study, conducted in Tokyo, Beijing, Seoul, Bangkok, Singapore, and Jakarta, found that English speakers were between two and four times as likely to use the internet as their non-English speaking fellow citizens. Within each country, this is a familiar story of haves and have-nots, but in the connections between countries something altogether different is happening — the internet is creating an American version of the British Empire, with the English language playing the role of the Royal Navy.

This isn’t about TCP/IP — in an information economy the vital protocol is language, written and spoken language. In this century, trade agreements have tended to revolve around moving physical goods across geographical borders: ASEAN, EU, OAS, NAFTA. In the next century, as countries increasingly trade more in information than hard goods, the definition of proximity changes from geographic to linguistic: two countries border one another if and only if they have a language they can use in common. The map of the world is being redrawn along these axes: traders in London are closer to their counterparts in New York than in Frankfurt, programmers in Sydney are closer to their colleagues in Vancouver than in Taipei. This isn’t an entirely English phenomenon: on the internet, Lisbon is closer to Rio than to Vienna, Dakar is closer to Paris than to Nairobi.

This linguistic map is vitally important for the wealth of nations — as the Dentsu study suggests, the degree to which a country can plug into a “language network,” especially the English network, will have much to do with its place in the 21st century economy. These language networks won’t just build new connections, they’ll tear at existing ones as well. Germany becomes a linguistic island despite its powerhouse economy. Belgium will be rent in two as its French- and Flemish-speaking halves link with French and Dutch networks. The Muslim world will see increasing connection among its Arabic-speaking nations — Iraq, Syria, Egypt — and decreasing connections with its non-Arabic-speaking members. (Even the translation software being developed reflects
this bias: given the expense of developing translation software, only languages with millions of users — standard versions of English, French, Portuguese, Spanish, Italian, German — will make the cut.) And as we would expect of networks with different standards, gateways will arise; places where multi-lingual populations will smooth the transition between language networks. These gateways — Hong Kong, Brussels, New York, Delhi — will become economic centers in the 21st century because they were places where languages overlapped in the 19th.

There are all sorts of reasons why none of this should happen — why the Age of Empire shouldn’t be resurrected, why countries that didn’t export their language by force should suffer, why English shouldn’t become the Official Second Language of the 21st century — but none of those reasons will matter. We know from the 30-year history of the internet that when a new protocol is needed to continue internet growth, it’ll be acquired at any expense. What the internet economy demands more than anything right now is common linguistic standards. In the next 10 years, we will see the world’s languages sorted into two categories — those that form part of language networks will grow, and those that don’t will shrink, as the export of languages in the last century reshapes the map of the next one.

First published in FEED, 7/15/99.

The United Nations released its annual Human Development Report this week, including a section concerning the distribution of Internet use among the nations of the world. It painted a picture of massively unequal distribution, showing among other things that the United States has a hundred times more Internet users per capita than the Arab States, and that Europe has 70 times more users per capita than sub-Saharan Africa.
Surveying the adoption rates detailed in this report, anyone who has any contact with the Internet can only be left with one thought — “Well, duh.” There is some advantage to quantifying what is common knowledge, but the UN has muddied the issues here rather than clarifying them.

Is there really anybody who could be surprised that the country that invented the internet has more users per capita than Qatar? Is there really anyone who can work themselves up over the lack of MyYahoo accounts in nations that also lack clean water? The truth of the matter is that internet growth is not gradual, it is a phase change — when a country crosses some threshold of readiness, demand amongst its citizens explodes. Beneath that threshold, trying to introduce the internet by force is like pushing string — its is absurd to put internet access on the same plane as access to condoms and antibiotics.

Once a country reaches that threshold, though, there is one critical resource that drives internet adoption, and the UN desperately wants that resource to be money. Among the UN’s proposals is a “bit tax” (one penny per 100 emails) to build out telecommunications infrastructure in the developing world. While improving infrastructure is an admirable goal, it fudges the real issue: among countries who are ready for rapid internet adoption, the most important resource isn’t per capita income but per
capita freedom. Massive internet adoption of the sort the UN envisions will require an equally massive increase in political freedom, and the UN is in no position to say that part out loud.

The HDR report is hamstrung by the UN’s twin goals of advancing human rights and respecting national sovereignty. Where the internet is concerned, these goals are incompatible. The United Arab Emirates has a much better telecom infrastructure than Argentina, but a lower per capita use of the internet. Saudi Arabia has a higher per capita income than Spain but lower internet penetration. What Argentina has more of
than the UAE is neither infrastructure, nor money, but the right of the citizens to get information from a wide variety of sources, and their willingness to exercise that right. Among nations of relatively equal development, it will be the freer nations and not the richer ones that adopt the internet fastest.

The report addresses this issue by suggesting a toothless campaign to “…persuade national governments not to restrict access to the internet because of its tremendous potential for human development,” avoiding mentioning that the “potential for human development” is a death sentence for many of the world’s leaders. If the UN was serious
about driving internet adoption, the section on the internet would have started with the following declaration: “Attention all dictators: internet access is the last stop for your regime. You can try to pull into the station gradually, as China and Kuwait are trying to do, or you can wait to see what happens when you plow into the wall at full speed, like North Korea and Kenya, but the one thing you can’t do is keep going full steam ahead. Enjoy your ride.”

6/15/1999

All countries are different; all customers are the same. That’s the lesson to be
learned from Freeserve ISP’s meteoric rise, and the subsequent reshaping of the UK
internet industry. Prior to Freeserve, the British adoption rate of the internet was
fairly sluggish, but Freeserve figured out how to offer free internet access by
subsidizing its service with for-fee tech support and a cut of local call revenues,
and in the six months since they’ve launched (and spawned over 50 copycat services),
the UK user base has grown from 6 to 10 million. Their main advantage over the other major ISP player, British Telecom, was the contempt BT has for the British public.

Wherever technology is concerned, there are a host of nationalistic prejudices: the
Americans are early adopters, for example, while the British are nation of shopkeepers, suspicious of technology and fearful of change. BT held this latter view, behaving as if Britain’s slow adoption of the internet was just another aspect of a national reticence about technology, and therefore treating the ISP business as an expensive service for elites rather than trying to roll it out cheaply to the masses.

This idea of national differences in the use of the internet is everywhere these days,
but this idea confuses content with form. There will be Czech content on the net, but
there won’t be a “Czech Way” of using the network, or a “Chinese Way” or a “Chilean Way.” The internet’s content is culturally determined, but its form is shaped by economics. Once a country gets sufficiently wired, the economic force of the internet has little to do with ethnicity or national sentiment and much to do with the unsurprising fact that given two offers of equal value, people all over the world will take the cheaper one, no matter who is offering it to them.

Unsurprising to consumers, that is; businesses all over the world are desperate to
convince themselves that national identity matters more than quality and price. (Remember the “Buy American” campaign that tried to get Americans to pay more for inferior cars? or the suggestion that corrupt business practices were part of “Asian Values”?) Freeserve’s genius was not to be swayed by the caricature of stodgy, technophobic Brits. British reticence about the internet turned out to be about price and not about national character at all — now that internet access has come in line with ordinary incomes, the British have been as keen to get connected as Americans are.

Patriotism is the last refuge of an unprofitable business. We’ve seen the internet take
off in enough countries to have some idea of the necessary preconditions: when a
literate population has phones at home, cheap PCs, and competitive telecom businesses, the value of connecting to the internet rises continually while the cost of doing so falls. In these countries, any business that expects national identity to provide some defense against competition is merely using a flag as a fig leaf. In the end, countries with wired populations will see national differences reduced in importance to the level of the Local Dish and Colorful Garb, because once a country passes some tipping point, its population starts behaving less like citizens of a particular place and more like global customers, making the same demands made by customers everywhere. Businesses that fill those demands, regardless of nationality, will thrive, and businesses that ignore those demands, regardless of nationality, will die.