Economic Growth Requires Intelligent Design

Op-Ed written by Lars Gumede for the Sunday Times. Article link: https://www.timeslive.co.za/sunday-times/opinion-and-analysis/2022-02-27-economic-growth-requires-an-intelligent-design/

FULL TEXT

By Lars Gumede

 South Africa’s intelligence agencies and military have a crucial role to play in the building of the economy, a role they unfortunately have not been playing. According to the Expert Review Panel into the July 2021 Civil Unrest in South Africa, “there was a significant intelligence failure to anticipate [the violence]” at great cost to the economy. However, the larger failure lies in the fact that the military and intelligence structures of the world’s strongest nations are not in place to secure the country’s physical security alone. They serve to protect and further the country’s greater national and strategic interests as well as build the economy – a task that South Africa’s military and intelligence structures have not adequately done.

The United States’ National Security Agency (NSA) is its largest and most secretive intelligence agency, as is the United Kingdom’s Government Communications Headquarters (GCHQ). Today, they are capable of intercepting communications from all corners of the world through a network of eavesdropping bases, listening posts and monitoring facilities. This tool is the backbone of US and UK power. These agencies pass important economic intelligence to corporations to give them the edge over foreign competitors – giving great benefit to their local economies. The US Central Intelligence Agency (CIA) even has a venture capital arm, In-Q-Tel, to invest in small businesses developing useful technologies.

However, the US intelligence structure does not simply aid US companies, it is often integral in forming them. It was an intelligence program called the Massive Digital Data Systems (MDDS) project which gave Google’s founders, Sergey Brin and Larry Page, research grants at Stanford University to build what would become one of the world’s largest companies. Today, Google works closely with the US intelligence community and this cooperation between the private and public sectors not only helps the agencies and companies involved but benefits the entire economy as when companies expand, jobs are created, and America’s global position strengthens.

Israel is perhaps the best example of the security cluster’s vital role in building the economy. Former Prime Minister Benjamin Netanyahu often spoke of his will to turn Israel into a cyber power using two of the most important projects in the Israeli Defense Force (IDF); the Talpiot Program and the secretive Unit 8200. The Talpiot Program is a special training program for the best high school graduates in the country and is designed to turn them into world-leading experts in various fields from the sciences and academia to leadership. Graduates of the Talpiot Program have gone on to start some of Israel’s most successful startups.

Unit 8200 is Israel’s primary signals intelligence service (akin to America’s NSA and Britain’s GCHQ). Israel’s Unit 8200 is arguably the most sophisticated intelligence unit in the world and is responsible for all Israeli operations in cyberspace – offensive and defensive. Unit 8200’s soldiers (many of whom come from the Talpiot Program) are given free rein to develop high-tech cyber tools for the defense of the state. Then, when these tools become militarily obsolete, they take their wares to the private sector and form world leading cyber-security and tech startups. In Israel, the role of the intelligence structures is not purely to ensure the physical security of the country but also to promote its economic prosperity.

Today, despite Israel making up 0.11% of the world’s population, it holds one-third of the world’s cybersecurity unicorns (billion-dollar startups). South Africa’s ‘Silicon Valley’, the Cape Town–Stellenbosch corridor boasts roughly 450 tech companies, Israel is home to 6500 (one per every 1400 people). In 2021, South Africa created just one tech unicorn whilst Israel created 33 (which raised ±R375bn of funding).

Even South Africa’s Naspers has a stake in Israeli analytics startup SimilarWeb. This booming tech sector means the world’s biggest companies are expanding their footprints in Israel with Research & Development (R&D) facilities. These companies include Apple, Amazon, Microsoft, Google and Alibaba to name a few. These IDF programs are not only succeeding in producing output and economic growth, they also serve to keep talent ‘in Israel, for Israel’ – limiting human capital flight.

Minister of State Security Ayanda Dlodlo has expressed an interest in expanding the State Security Agency (SSA)’s economic intelligence unit, stating that “[many nations' intelligence agencies] support big conglomerates that have invested in other countries. That is what we need to be doing.” US intelligence’s worldwide support for American big business is well studied. From the 1954 coup in Guatemala to protect the profits of United Fruit Company, to more recent operations protecting oil interests in the Middle East, US intelligence has been vital to America’s global economic success since the Second World War. Similarly, China’s Ministry of State Security (MSS) has been instrumental in securing infrastructure projects and loan-deals for Chinese corporations and banks in Africa.

Such projects are undertaken by most developed countries, even South Africa’s Bureau of State Security (BOSS) and Department of Military Intelligence (DMI) pre-1994. Unfortunately, years of in-fighting and corruption have prevented the SSA from embarking on strategic long term projects which are crucial to a nation’s success.

South Africa’s intelligence and military structures must learn from those of the world’s most prosperous economies in order to make South Africa economically, technologically and strategically competitive in this changing world.