A catastrophic software failure from a private entity recently led to widespread disruptions in the global economy, impairing air travel, banking operations, business activities, and research labs. However, this turmoil was not borne of a malicious cyber attack or acts of terrorism. Instead, it was the result of subpar corporate operations. As noted by journalists David Streitfeld and Kate Conger in The New York Times, the debacle unfolded when Texas-based company CrowdStrike – a firm dedicated to shielding corporate clientele from cyber vulnerabilities – ironically became the root cause of the problem, due to an ill-prepared response to a threat originating from within its operations.
Disaster struck following the distribution of a minor Windows software update to CrowdStrike’s customers on a Thursday evening. An unexpected glitch resulted in system-wide crashes for every computer that received the update. Allegedly, the company did not thoroughly scrutinize the update on a broad range of Windows systems, a step that industry insiders argue could have helped identify and alleviate the issue before the roll-out.
Thankfully, the principal fallout of the incident was inconvenience rather than catastrophe. However, several hospitals were forced to withhold some medical services because they were unable to access patient records. What can we glean from this unfortunate incident? A key takeaway could be the importance of dedicating resources towards redundant systems so as to have a backup in place when the primary one fails.
A further lesson, relevant to regulators and policymakers, is the call for more stringent supervision of software updates, making comprehensive testing a prerequisite before deployment. In pursuit of profit and operational efficiency, companies sometimes expediently overlook these crucial steps. While the companies like CrowdStrike and Boeing are brought to the limelight, we lack sufficient knowledge to gauge just how prevalent these practices are.
The introduction of redundancy or regulatory oversight to prevent similar incidents in future comes with additional business costs. However, the political climate, particularly in the United States, appears to overlook the reality of globally intertwined technological frameworks. A persistence of the flawed vision of America as an insulated fortress continues to be fervently popular, a sentiment that harks back to the 1930s.
Continual focus on the potential drawbacks of global interconnectedness, rather than appreciating its numerous benefits, is a common mindset. Unfounded narratives regarding the crime rate among immigrants and causes of deindustrialization are used as diversions, instead of formulating strategies that can ensure the attraction of skilled immigrants and fostering businesses suitable for the 21st-century economy.
A substantial downside of this global interdependence, however, comes in the form of cost-cutting measures adopted by large corporations, which possess significant economic power. These shortcuts can result in devastating incidents – a plane plummeting from the sky due to technical failure, a toxic train derailment, or a worldwide data infrastructure collapse.
The dynamics of the global economy can cause some job roles to be outsourced overseas, but globalism, on balance, creates more employment opportunities than it eliminates. Nonetheless, advancements in technology have led to the creation of more jobs requiring specialized skills and qualifications. In such a scenario, many US citizens find themselves sidelined in this burgeoning economy.
While measures like job training, enhanced unemployment insurance, and infrastructure investment can help address this issue, our current political climate and skewed tax policies hinder us from tackling these core problems arising from the rapid economic transformation due to technology. The United Nations Development Programs (UNDP) in its Human Development Report for 2023-2024 emphasizes the sustained growth of global economy and the increasing global interdependencies.
As per the report, in many ways, international interconnectedness is on an upward trajectory, even as economic integration seems to steady. Goods now travel twice as far as they did six decades ago and cross more borders before they’re finally consumed. The smartphone manufacturing process of today looks starkly different from the assembly lines of the yesteryears, involving various global inputs and leaving detrimental social and environmental footprints in their path.
Global financial dependency is also soaring ever higher, despite the pace of integration slowing post the financial crunch of 2007/2008. Cross-border information flows set new records annually, and digital service exports now hold a majority share in global commercial service trade. The contribution of exports and imports to the Global GDP has steadied above the 50% mark.
A strong preservation of national sovereignty indicates our interdependent global economy is primarily governed by tariffs, non-binding treaties, and market dynamics, leaving us susceptible to errors caused by cost-cutting practices or pure negligence. The UNDP report acknowledges the surge in warfare, immigration, and growing mistrust in institutions associated with anti-globalization.
The increased skepticism in institutions is strengthened by a lack of trust in scientific expertise, as seen in the COVID-19 crisis and the misguided backlash against vaccines, masks, and isolation. This skepticism was fueled by the hesitance of scientists to acknowledge scientific uncertainties, leading to lower public trust as scientific knowledge and policies evolved over time. Visible deindustrialization and its unequal distribution of costs and benefits only further challenge the public’s faith in these institutions. We need to stop pointing fingers and turn our focus to building a sustainable future instead.