Digital Ecosystems: Two-Faced Janus of the National State

Abstract

Economic security of the national state is traditionally considered to be implemented only at macro level of the national economy. However, a new reality of the XXI era has shown that the key aspects of the national security are being arisen at micro level of economic activity. Innovations have created not only new factors for prosperity but given birth to specific risks and novel threats for the national state. Digital ecosystems (DESs) that have just come to light have been generating a host of state threatening consequences. Nowadays most if not all of the largest world companies are parts of digital ecosystems. Market capitalization, total sales and total business operations of the digital ecosystems equal or even exceed the gross domestic product of many independent states. A typical profile of a digital ecosystem comprises such characteristics as self-regulation and independent business; vague industry and geographic frontiers; absence of clear inner structural elements within the firm; absence or minimization of material (brick-and-stone) assets. The services of the digital ecosystems lie in a variety of highly different production, transportation, market, and after-market spheres including finance and logistics. The intangible power of DESs is based on ICT technology, e. g., M2M and IoT, which could work in an autonomous regime even off Wi-Fi areas. Cloud computing, fog computing and edge computing allow to storage and manipulate big data over the firms’ boundaries and stay off the government control. Although M2M interactions are good for telemedicine, industrial security, payment systems, etc., smart digital activity of DESs might be harmful for national economic security. Firstly, as digital ecosystems are collecting huge amount of private data, they have access to more subtle behavioral aspects of individuals than government offices. Using their private databases, DESs could influence clients in both economic and political areas. Secondly, digital cartels could implement brand-new types of price discrimination which are out of government regulations. Dynamic pricing in both sides of the digital platforms (for content providers and for consumers) could add to national inflation rates. Thirdly, information that is used to elaborate and implement government economic policy could be easily manipulated within DESs due to low quality of IT operators or because of hacker-driven misinformation. It means that the critically important statistics are in fact in the hands of the digital ecosystems, which have been transforming into tacit co-partners of government economic and social policy. In social sphere DESs have introduced a special business model, that is, worker-on-demand. Like video on demand or car sharing, employees can be hired temporarily with no labour contracts, no social security plans, no any feasible limitations on time, place, and conditions of work. Quantity of labour force, level of wages, and other important elements of working life are in the hands of algorithmic management, a special IT program elaborated by DESs’ specialists in the interests of the DESs. Such practices of labour market undermine the government social policy and increase social tensions. Digital ecosystems have changed labour resources in the direction of cyber wars. In order to defense their own infrastructure and virtual space of their activity, DESs are in the process of establishing their own cyber-army. The DES employees usually act as potential (and actual sometimes) cyber-worriers in detecting and eliminating unsanctioned penetration in digital nets of the company. The problems of digital ecosystems having too much economic power are being under consideration in many countries. For example, in China in 2021 the government replaced its former liberal IT policy for tight IT regulation of DESs. Thus, thinking about national economic security, we should take into account a new digital reality in forms of digital ecosystems and their desire (consciously or unconsciously) to substitute national state in its significant economic and social functions.