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Strategic News Service
SNS Subscriber Edition • Volume 24, Issue 18 • Week of June 3, 2019


The Technical and
Business Outcomes
for an Isolated China



SNS: Disengagement:
The Technical and Business
for an Isolated China


In This Issue
Week of 6/3/2019 Vol. 24 Issue 18


FiRe 2019 Speaker Spotlight

If you've ever had a candid conversation with a penetration tester  a cybersecurity expert companies hire to help them find vulnerabilities in their security architecture  they probably told you that one of the biggest challenges in helping to secure a firm's infrastructure might be the team responsible for that security to begin with.

The reasons for this are human, not technical: security executives are often judged by their ability to create failproof systems, so it can reflect poorly on them when the systems they're charged with overseeing are revealed to have vulnerabilities. These vulnerabilities threaten the perception of the effectiveness of the security leader and can promote negative behavior that works against the best interests of the company.

Vanessa Pegueros, who recently left her role as chief information security officer (CISO) of DocuSign, is on a mission to change that. "I am driving to bring cyber expertise to the boardroom and help CISOs be more successful," Pegueros told GeekWire in late April. "Currently, I am serving on the Carbon Black board and BECU audit committee. I am also focusing on veryearly-stage startups leveraging AI and ML in the Pacific Northwest as a venture partner with Flying Fish Partners." 

Pegueros, who previously served as SVP of Enterprise Information Security at US Bank and was CISO at Expedia, certainly has the chops. We're thrilled to be welcoming her to Future in Review 2019, October 8-11 in La Jolla, California, for a conversation about long-term strategic leadership at the board level. 

Learn more about FiRe 2019 and register here.



Disengagement: The Technical and Business Outcomes
      for an Isolated China

Two Opening Thoughts on the Eve of Disengagement


1.  When I first began writing the SNS Global Report, its focus was on the convergence of computing and telecommunications technologies. Ten years later, with that no longer the primary driver of the energy in the technology sector, I moved on to writing about how technology drives the global economy. In both decades, the focus was on technology how it drove either companies (their earnings, their competitive positions, and their strategies) or national economies.

2.  All of this changed in around the year 2000 (we know in retrospect), when China adopted what we have named the "InfoMerc" national business model, in place of pure communism. By 2005 it was clear that: a) we had been on the right original theoretical path, leading to the SNS Economic Mantra: In the postInformation Age, technology drives every sector of the global economy, and intellectual property (IP) is its asset class; and b) China, after Deng, was transforming into a country bent upon using stolen IP to dominate global markets. After it illegally took over the South China Sea, we had to expand our estimate of its plans to include geographical and military dominance, in the longer term, as well.

The result was a new understanding of our charter: while we would continue to cover technology trends and their effects on the economy, the world had changed dramatically. There was no technology, company plan, or country economy that could be discussed without including the effects of China's actions and plans. Virtually every prediction we've made with this in mind, involving all of our prior subject areas, has proven accurate, whether involving computers, chips, smartphones, or cars. Conversely, any analyst not including China's effects will get it wrong and there remain a preponderance of analysts who don't have a clue about the real China.

On this score, we and our members have had the good fortune of being perhaps the first in the world to understand and share China's real plans, through the research and activities of our INVNT/IP division. This isn't a brag; the US DoJ has said the very same thing, and we know that it's true because we've briefed the top leaders of all of the free world's intelligence agencies on this knowledge, as well as political leaders. The obvious benefit to you, our members, is that you have been the first to see this new world in its proper context, and therefore have a much greater chance of making effective plans for yourself, your company, and your country.

In today's issue, we are addressing the possibility that there's no way for "inventing nations" to engage with China without being harmed, or even dominated. Certainly, the Chinese InfoMerc model can be seen as having been designed as the perfect antipode to modern free-market democratic rule. While most people tend to think of countries vis-a-vis the latter's politics (liberal democratic vs. purely capitalist, for example), we don't; rather, we consider their national business models. In a sense, this means we don't address their cultural or social programs; we just work with whether they will grow or suffer based on how they make money.

This may sound tough, but it's a less judgmental, and therefore more accurate, lens. To that end, given the SNS Economic Mantra, things look very simple: there are Theft Nations and there are Inventing Nations. Class over.

So what will happen if China refuses to stop stealing others' IP and dumping it back onto the global markets? Ultimately, we'll either have to disengage or disappear. Today's issue is based on the premise that all free people would prefer to disengage.


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