The next decade holds mind-bending promise for American business. Globalization is prying open vast new markets. Technology is plowing ahead, fueling—and transforming—entire industries, creating services we never thought possible. Clever people worldwide are capitalizing every which way. But because globalization and technology are morally neutral forces, they can also drive change of a different sort. We saw this very clearly on September 11 and are seeing it now in Iraq and in conflicts around the world. In short, despite the aura of limitless possibility, our lives are evolving in ways we can control only if we recognize the new landscape. It's time to take an unblinking look.
We have entered the age of the faceless, agile enemy. From London to Madrid and Nigeria to Russia, stateless terrorist groups have emerged to score blow after blow against us. Driven by cultural fragmentation, schooled in the most sophisticated technologies, and fueled by transnational crime, these groups are forcing corporations and individuals to develop new ways of defending themselves. The end result of this struggle will be a new, more resilient approach to national security, one built not around the state but around private citizens and companies. That new system will change how we live and work—for the better, in many ways—but the road getting there may seem long at times.
The conflict in Iraq has foreshadowed the future of global security in much the same way that the Spanish Civil War prefigured World War II. Unlike previous insurgencies, the one in Iraq is comprised of 75 to 100 small, diverse, and autonomous groups of zealots, patriots, and criminals alike. These groups, of course, have access to the same tools we do—from satellite phones to engineering degrees—and use them every bit as well. But their single most important asset is their organizational structure, an open-source community network very similar to what we now see in the software industry. It is an extremely innovative structure, sadly, and results in decision-making cycles much shorter than those of the U.S. military. Indeed, because the insurgents in Iraq lack a recognizable center of gravity—a leadership structure or an ideology—they are nearly immune to the application of conventional military force. Like Microsoft, the software superpower, the United States hasn't found its match in a competitor similar to itself, but rather in a loose, self-tuning network.
The second insight Iraq gives us is that the convergence of international crime and terrorism will provide ample fuel and a global platform for these new enemies. Al Qaeda's attack on Madrid, for example, was funded by the sale of the drug Ecstasy. And Moisés Naím, in his new book, Illicit, details how globalization has fostered the development of a huge criminal economy that boasts a technologically leveraged global supply chain (like Wal-Mart's) and can handle everything from human trafficking (Eastern Europe) to illicit drugs (Asia and South America), pirated goods (Southeast Asia), arms (Central Asia), and money laundering (everywhere). Naím puts the value of that economy at between $2 trillion and $3 trillion a year. He says it is expanding at seven times the rate of legitimate world trade.
This terrorist-criminal symbiosis becomes even more powerful when considered next to the most disturbing sign coming out of Iraq: The terrorists have developed the ability to fight nation-states strategically—without weapons of mass destruction. This new method is called "systems disruption," a simple way of attacking the critical networks (electricity, oil, gas, water, communications, and transportation) that underpin modern life. Such disruptions are designed to erode the target state's legitimacy, to drive it to failure by keeping it from providing the services it must deliver in order to command the allegiance of its citizens. Over the past two years, attacks on the oil and electricity networks in Iraq have reduced and held delivery of these critical services below prewar levels, with a disastrous effect on the country, its people, and its economy.
The early examples of systems disruption in Iraq and elsewhere are ominous. If these techniques are even lightly applied to the fragile electrical and oil-gas systems in Russia, Saudi Arabia, or anywhere in the target-rich West, we could see a rapid onset of economic and political chaos unmatched since the advent of blitzkrieg. (India's January arrest of militants with explosives in Hyderabad suggests that the country's high-tech industry could be a new target.) It's even worse when we consider the asymmetry of the economics involved: One small attack on an oil pipeline in southeast Iraq, conducted for an estimated $2,000, cost the Iraqi government more than $500 million in lost oil revenues. That is a return on investment of 25,000,000%.
Now that the tipping point has been reached, the rise of global virtual states—with their thriving criminal economies, innovative networks, and hyperefficient war craft—will rapidly undermine public confidence in our national-security systems. In fact, this process has already begun. We've seen disruption of our oil supply in Iraq, Nigeria, Venezuela, and Colombia; the market's fear of more contributes mightily to the current high prices. But as those disruptions continue, the damage will spill over into the very structure of our society. Our profligate Defense Department, reeling from its inability to defend our borders on September 11 or to pacify even a small country like Iraq, will increasingly be seen as obsolete. The myth of the American superpower will be exposed as such.
Then, inevitably, there will be a series of attacks on U.S. soil. The first casualty of these will be another institution, the ultrabureaucratic Department of Homeland Security, which, despite its new extra-legal surveillance powers, will prove unable to isolate and defuse the threats against us. (Its one big idea for keeping the global insurgency at bay—building a fence between Mexico and the United States, proposed in a recent congressional immigration bill—will prove as effective as the Maginot Line and the Great Wall of China.)
But the metaphorical targets of September 11 are largely behind us. The strikes of the future will be strategic, pinpointing the systems we rely on, and they will leave entire sections of the country without energy and communications for protracted periods. But the frustration and economic pain that result will have a curious side effect: They will spur development of an entirely new, decentralized security system, one that devolves power and responsibility to a mix of private companies, individuals, and local governments. This structure is already visible in the legions of private contractors in Iraq, as well as in New York's amazingly effective counterterrorist intelligence unit. But as we look out to 2016, the long-term implications are clearer.
Like Microsoft, the United States hasn't found its match in a competitor similar to itself, but rather in a loose, self-tuning network.
Security will become a function of where you live and whom you work for, much as health care is allocated already. Wealthy individuals and multinational corporations will be the first to bail out of our collective system, opting instead to hire private military companies, such as Blackwater and Triple Canopy, to protect their homes and facilities and establish a protective perimeter around daily life. Parallel transportation networks—evolving out of the time-share aircraft companies such as
Warren Buffett's NetJets—will cater to this group, leapfrogging its members from one secure, well-appointed lily pad to the next. Members of the middle class will follow, taking matters into their own hands by forming suburban collectives to share the costs of security—as they do now with education—and shore up delivery of critical services. These "armored suburbs" will deploy and maintain backup generators and communications links; they will be patrolled by civilian police auxiliaries that have received corporate training and boast their own state-of-the-art emergency-response systems. As for those without the means to build their own defense, they will have to make do with the remains of the national system. They will gravitate to America's cities, where they will be subject to ubiquitous surveillance and marginal or nonexistent services. For the poor, there will be no other refuge.
Until, that is, the next wave of adaptive innovation takes hold. For all of these changes may prove to be exactly the kind of creative destruction we need to move beyond the current, failed state of affairs. By 2016 and beyond, real long-term solutions will emerge. Cities, most acutely affected by the new disruptions, will move fastest to become self-reliant, drawing from a wellspring of new ideas the market will put forward. These will range from building-based solar systems from firms such as Energy Innovations to privatized disaster and counterterrorist responses. We will also see the emergence of packaged software that combines real-time information (the status of first-responder units and facilities) with interactive content (information from citizens) and rich sources of data (satellite maps). Corporate communications monopolies will crumble as cities build their own emergency wireless networks using simple products from companies such as Proxim.
By 2016, we may see the trials of the previous decade as progress in disguise. The grassroots security effort will do more than just insulate our gas lines and high schools. It will also spur positive social change: So-called green systems will quickly shed their tree-hugger status and be seen as vital components of our economic and personal security. Even those civilian police auxiliaries could turn out to be a good thing in the long run: Their proliferation—and the technology they'll adopt—will lead to major reductions in crime.
All of these changes may prove to be exactly the kind of creative destruction we need.
Some towns and cities will go even further. In an effort to bar the door against expanding criminal networks, certain communities will move to regulate, tax, and control everything from illegal immigration to illicit drugs, despite federal pressure to do otherwise. A newly vigilant and networked public will push for much greater levels of transparency in government and corporate operations, using the Internet to expose, publish, and patch potential security flaws. Over time, this new transparency, and the wider participation it entails, will lead to radical improvements in government and corporate efficiency.
On the national level, we'll see a withering of the security apparatus, but quite possibly a flowering in other areas. Energy independence and the obsolescence of conventional war with other countries will reduce tensions between the United States and the rest of the world. The end of oil will also force corrupt states, now propped up by energy income, to make the reforms they need to be accepted internationally, improving life for their people.
Perhaps the most important global shift will be the rise of grassroots action and cross-connected communities. Like the Internet, these new networks will develop slowly at first. After a period of exponential growth, however, they will quickly become all but ubiquitous—and astonishingly powerful, perhaps as powerful as the networks arrayed against us. And so we will all become security consultants, taking an active role in deciding how it is bought, structured, and applied. That's a great responsibility and, with luck, an enormous opportunity. Choose wisely.
John Robb was a mission commander for a "black" counterterrorism unit that worked with Delta Force and Seal Team 6 before becoming the first Internet analyst at Forrester Research and a key architect in the rise of Web logs and RSS. He is writing a book on the logic of terrorism.
A version of this article appeared in the March 2006 issue of Fast Company magazine.