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A Message to You...SKA Newsletter #1
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Into the Void: Ungoverned Space
 
Welcome to the inaugural Storm King Analytics newsletter, a bi-weekly update on what we’re doing, reading, and following. First up: how can we learn to see inside some of the most opaque places on the planet?
 
In Silicon Valley, it’s not uncommon for self-described disrupters to self-consciously slip the acronym “VUCA” into conversation. VUCA, which stands for “volatility, uncertainty, complexity, and ambiguity,” describes the rapidly shifting landscape on which future competition and conflicts will take place. But it wasn’t coined by product managers at Facebook to describe cutthroat competition in the mobile ad space. VUCA was invented by the U.S. Army War College to instill in commanders that traditional war-fighting doctrine, functions, and hierarchies no longer necessarily apply.
 
While amateurs talk of disrupting established competitors, the professionals in the U.S. Army Training and Doctrine Command (TRADOC) are wondering what it’s like to fight in places where there’s no establishment at all. In Pamphlet 525-8-5, TRADOC predicts:
 
Future operational environments will be characterized by uncertainty, complexity, rapid change, and a range of potential threats. They will be marked by various levels of conflict among nations and groups competing for wealth, resources, political authority, sovereignty, and legitimacy. The distinctions between threats will blur for the U.S. These include, for example, the nature of enemies and adversaries, and the multiplicity of actors involved. In addition, friendly and unfriendly actors will attempt to adapt to an ever-changing environment, which may lack a system of governance or rule of law.
 
The most challenging of these environments, where VUCA rules, are known as Ungoverned Spaces. These are the places where national sovereignty effectively stops — whether on remote mountaintops, in slums, in labyrinthine offshore accounts, or even in cyberspace. Whether emerging from the ruins of a failed state or the hollowing out of national power from within, the world is now littered with Ungoverned Spaces like the terrorist havens of Waziristan and Yemen, the empty quarters of the Sahel and Maghreb, megacities as varied as Rio de Janeiro, Karachi, and Lagos, and most famously the territory controlled by Islamic State.
 
Ungoverned Spaces aren’t voids but the opposite — places where dense, overlapping networks of local actors compete for legitimacy in the absence of a strong state, NGOs, or multinational corporations. Picture São Paulo drug gangs providing favela residents protection, or Islamic State’s efforts to win hearts and minds by employing “warfare through welfare.” These are places where the rule of law and formal governance is suspended, replaced by a combustible mixture of threats and promises administered through personal relationships opaque to outsiders. Every Ungoverned Space is ungoverned in its own way. But simply knowing that doesn’t help you much.

Which is why our team here at Storm King Analytics have been supporting an Army Studies Program study of Ungoverned Spaces in support of the Network Science Center at West Point. As its name implies, our goal was to develop a multi-layer model capable of analyzing the actors and relationships embedded within and across these competing networks, and once we had done that, identify and assess opportunities for interventions.

In other words, rather than charging into environment we don’t understand, could we subtly tweak the networks to produce more desirable outcomes from a military perspective? 
 
To test this hypothesis, we had to do three things: understand what’s driving the metastasis of Ungoverned Spaces; select one such space for analysis, and make predictions that could be proven over time. For now, let’s stick to why.
 
Ungoverned spaces are driven by four factors: urbanization; globalization; the rise of non-state actors, and the technology enabling them.
  • The planet’s urban population is set to double in the first half of this century to more than 7 billion, while urban land cover is poised to triple. The vast majority of this growth will be concentrated in slums and other informal settlements — classic Ungoverned Spaces where services are locally provisioned.
  • The second trend, globalization — especially migration and infrastructure networks — feeds the first, leading to transnational migrant communities whose inner workings are illegible to their host countries (as seen in the Paris and Brussels attacks plotted from the relative obscurity of the immigrant neighborhood of Molenbeek in Brussels).
  • Perhaps most alarming is the mounting wealth of non-state actors. Whether it’s Mexico’s Sinaloa drug cartel or Islamic State (and its oil revenue), their multi-billion dollar cash flows increase the opportunities for state capture through a combination of fear and bribery, or even the replacement of state services altogether. It also potentially expands their reach from local or regional actors into global ones through offshore money laundering and investments.
  • That’s driven by the fourth factor, technology, which has consistently made the ability to connect, coordinate, and execute hostile activities more easily, efficiently, and invisibly. Three days before last fall’s Paris attacks, for example, the Belgian federal interior minister acknowledged Islamic State’s preference for using the Sony Playstation 4 network for communication. It turned out they didn’t even need encryption.
Ironically, these are more or less the same factors that have emerging markets investors salivating. For instance, in their book No Ordinary Disruption: The Four Global Forces Breaking All the Trends, the directors of the McKinsey Global Institute name three of the same four, only electing for aging demographies over non-state actors. Meanwhile, private equity investors like the Dubai-based Abraaj Group have built multi-billion-dollar portfolios in the same markets focused on companies using technology to serve urban customers.
 
Given the scale and scope of the forces at work, perhaps it shouldn’t surprising that one army’s threat is private equity’s next fund-raising opportunity. In the next installment of this newsletter, we’ll introduce you to a place that ticks all the boxes on McKinsey’s checklist and could double as a plot line on Game of Thrones. As it turns out, these things are not unrelated. (Skip ahead if you’re dying to know who plays the Lannisters and the High Sparrow.)
 
We introduced Ungoverned Spaces and these factors in more depth in a recently published paper. Next time, we’ll visit the site we chose: the Emirate of Kano.

 

More from Storm King Analytics:
  • Out of Nowhere: Grace Mugabe could be the next president of Zimbabwe. The New York Times was shocked when Robert Mugabe’s much younger second wife emerged as a potential kingmaker. But we weren’t. Two years ago, we concluded the old lions in the president’s inner circle were too old to hang on. Grace’s rise has proven us right.
  • Using Networks to Improve Entrepreneurial Ecosystems. “This is a relationships business,” says every entrepreneur ever. They’re right, of course, but how? The story of how we adapted techniques from peacekeeping in Afghanistan to map the startups ecosystem of sub-Saharan Africa — and which incubators you should apply to.
  • A West Point Cadet Returns to Rwanda. We brought a pair of cadets with us on our May trip to Kigali to map local infrastructure networks. One of them was John Mugabe, a Rwandan Defense Forces cadet who brought personal experience to the notion of “ground truth.”  
Other interesting tidbits:
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