A weekly digest of the latest news and research related to the work of the Technology, Economics, and Governance Working Group. Topics covered in the digest include cybersecurity, domestic regulation, innovation, international competition, social media disinformation, and the California exodus.
This week’s roundup covers the next steps for Japan’s LDP party, NATO’s strategic approach to China, President Biden’s visit to Saudi Arabia, House cybersecurity appropriations, and Meta’s new AI tool to identify misinformation. Additional news includes a new bill to address national security conflicts of interest among consulting firms, FAA certification for autonomous flight systems, persistent Log4j vulnerabilities, and solar panel recycling challenges in California.
Industrial Policy & International Security
Abe’s complicated legacy looms large for current Japan PM | The Washington Post
Days after former Prime Minister Shinzo Abe was assassinated, the ruling Liberal Democratic Party (LDP)—Abe’s party—secured a big win in Japan’s parliament. Current Prime Minister Fumio Kishida inherits a complicated legacy from Abe as he charts the governments’ policy goals and considers his mentor’s unfinished and sometimes divisive agenda. While Abe’s more nationalistic endeavors such as increasing military power drew criticism, he also strengthened Western alliances, pushed for economic revitalization, and promoted women’s advancement in the workforce. Kishida faces a challenging security environment and will also have to tackle domestic concerns over rising prices and a stagnant economy. He is expected to hold office until elections in 2025 and will begin the LDP’s next chapter focused on party unity.
NATO’s new division of labor on Russia and China won’t be easy | Foreign Policy
NATO’s Strategic Concept, adopted at the recent Madrid Summit, identifies China as a direct security challenge for its members. The strategic shift is motivated by a number of factors: China’s rise leading to a new US-China bipolar system; increasing technology competition with China, especially in dual-use spheres; China’s growing authoritarianism and deepening alignment with Russia even after the invasion of Ukraine; and Europeans’ uncertainty about the United States’ commitment to trans-Atlantic security. Based on geography, NATO’s need to balance against both China and Russia will require that US and European resources be divided. It is likely that the US will consolidate its resources to focus on relations with China while Europe will focus on Russia. One of the largest challenges for NATO now is how this division of labor will occur.
While President Biden does not plan to announce an oil deal on his visit to Saudi Arabia, there are plans for oil production to be increased around the time of midterm elections this November. It is unclear how much this will impact gas prices in the US and when. To avoid the notion of compromising on human rights principles for energy needs, Biden has insisted that the trip’s purpose is to meet multiple leaders from the Gulf Cooperation Council on a range of national security issues. Regardless, a picture with Biden will likely help rehabilitate Crown Prince Mohammed bin Salman’s world image and may be enough to influence Saudi Arabia to cooperate with US interests during the visit.
A group of senators proposed new legislation this week requiring consulting companies with federal contracts to disclose if they carry out work advising foreign nations like China or Russia. The bill would help to identify conflicts of interest and, if necessary, deny contracts for national security related work; it was motivated by recent reporting on consulting firm, McKinsey & Co., and their contracts with the US government alongside consulting work with state-owned companies in China and weapons manufacturers in Russia. After the invasion of Ukraine, McKinsey stopped working with Russia. The consulting firm clarified to NBC News that its US government contracts are legally executed and operationally separated from other work streams.
Last September, the Federal Aviation Administration and New Zealand’s Civil Aviation Authority certified Merlin Labs’ autonomous flight system, which is compatible with existing aircraft. After clearing this major hurdle, Merlin Labs landed partnerships with Dynamic Aviation and Ameriflight, and plans on retrofitting the US Air Force’s C-130J cargo aircraft. This progress helped expand the startup’s Series B round to reach a total of $130 million in funding. The money raised from this funding round will go to more testing and standing up a Part 135 freight capability in New Zealand. Merlin Labs CEO and Founder Matt George believes the autonomous system will improve airline efficiency and safety. The startup expects autonomous flights to take off as soon as 2023.
Major Cyber Bug in Log4j to Persist as ‘Endemic’ Risk for Years to Come, U.S. Government Board Finds | The Wall Street Journal
A Department of Homeland Security review conducted by the Cyber Safety Review Board concluded that the Log4j vulnerability discovered last year could be exploited for many years to come. Log4j is widely used open-source software. The bug stoked fears of exploitation even after a patch was deployed. While the DHS report revealed lower level attacks, the investigation did not find evidence of “significant Log4j-based attacks on critical infrastructure.” Despite the security patch, the outdated Log4j code will likely persist for over a decade. Most troublesome is the Chinese government’s punishment of Alibaba, which publicly disclosed the vulnerability. The company may lose a cybersecurity partnership with the government. The US report cites concerns that these tactics, in concert with Chinese reporting requirements, could give state-sponsored hackers an edge.
House appropriations bills for fiscal year 2023 contain at least $15.6 billion for federal cybersecurity programs to help the nation adopt higher cybersecurity standards. Appropriations include $11.2 billion for the Department of Defense and $2.9 billion for the Cybersecurity and Infrastructure Security Agency (CISA)—a $400 million increase over the Biden administration’s initial request. Cybersecurity funding was also allocated to the Energy, Commerce, Health, Justice, Treasury, Transportation, and State departments. Notably, lawmakers asked the DoD, the largest federal employer of cyber experts, to clarify its cyber organizational chart and responsibilities. They also requested that DoD explore better coordination with CISA, which gained increased importance after cyberattacks on US infrastructure in 2020 and 2021.
State & Local Tech Ecosystems
California’s renewable-energy program successfully incentivized widespread use of solar panels and solar power now accounts for 15% of California’s power. However, approximately 90% of panels that have reached the end of their lifecycle are disposed of at landfills where toxic components can contaminate groundwater. Recycling solar panels is extremely costly and produces little economic return. The California Department of Toxic Substances Control (DTSC) estimates that California will install hundreds of millions of panels over the next decade. As they reach their 25-year age limit, safe disposal will become a larger issue. Solar panels are currently classified as universal waste, which makes it easier for consumers to turn them in but doesn’t solve the recycling problem. Regulators are exploring options to reduce the cost of recycling.
Facebook’s parent company, Meta, recently announced an AI fact-checking tool, Sphere, to address online misinformation. Meta claims Sphere can scan hundreds of thousands of citations simultaneously to provide near-instant fact-checking on a large scale. The model is already being tested on Wikipedia, where it is used to flag sources that do not support respective claims and can even recommend stronger source material. Sphere is trained on hundreds of millions of public webpages and researchers say the model will exceed the capabilities of current, automated misinformation identification systems. The new AI tool may help to deflect years of criticism aimed at Facebook for the platform’s role in allowing misinformation to proliferate online. Additionally, Meta’s partnership with Wikipedia could encourage stronger editorial oversight of the crowdsourced entries.