This interview was conducted for the ‘The Global Governance Futures 2025’ programme which brings together young professionals to look ahead and recommend ways to address global challenges.
MH & JS: In your view, do internet governance structures require substantial change? If so, what kinds of change are particularly important for moving forward?
TS: Private equity firms see corporate governance as the problem solving mechanism to bring about turnaround and thus create value for the corporations. Well-governed corporations are similar to creatures which can quickly adapt to any environmental changes. Although understanding of the word “governance”, i.e., “engagement among individuals and institutions about allocation of responsibility and authority to benefit stakeholders,” remains the same, we value the aspect of speed in business, and I believe that the idea is of significant importance for internet governance, given its sheer speed of technological advancement.
Given that it’s been only 20 years since the advent of global internet, a time span that is surely not enough to establish a matured governance structure, internet governance is in an early developmental stage. Also, a unique complication about the internet is that it was born in, developed in and dominated by the US. Therefore, it will surely undergo substantial changes in the future. Among these important changes will be how the US will relax its control over internet governance. A key to designing governance structure is making decision makers truly represent the stakeholders—the governing body should reflect how global internet users are. Although the US government has already stated that no single entity will control internet governance, some people do not believe that the reality will follow the promise.
MH & JS: Russia, China and other states are seeking to reduce formal American authority over internet governance by proposing UN-based governing structures. Would such a development improve, or hinder, effective internet governance?
TS: I think that it is a good move to at least question the status quo and that the US should lessen its grip on internet governance in the future. That said, I am not confident that UN-based governance structures are the solution, given the current paralysis of the UN Security Council. To be honest, I cannot think of an alternative to the current internet governance structures, especially in the next few years.
MH & JS: What is the best way of ensuring that governance does not overly stifle innovation and free speech on the internet?
TS: I think the role of governance in encouraging innovation and the role of securing freedom of speech are two different discussions. For the former, governance should be as passive as possible, while for the latter, we need active involvement of the governance body.
Throughout history, active government involvement in business has often led to chaos, or, at best, stagnation of innovation. Experience shows that the main role of governments in accelerating innovation is to work on necessary basic infrastructures such as securing intellectual property, anti-trust regulation, etc., so that corporations can invest more in research and development without any worries and so that sound competition is always in place.
The global governance body should be a guardian of freedom of speech and other fundamental human rights by, among other things, upholding the universal principle of human rights, supporting international NGOs, having discussions with some countries while respecting their independence and autonomy. Although I believe in the efficiency of market mechanism, it has not been very good at protecting human rights.
MH & JS: As someone with a successful career in finance, what do you consider the major potential risk posed by flawed internet governance schemes to a thriving private sector?
TS: First of all, I don’t think I’ve been successful in the field, as I just started my own business. So far, internet governance has not been a bottleneck in the private sector. I don’t see any internet companies suffering from malfunctioning internet governance. Although this is slightly off the topic, the NSA massive surveillance scandal didn’t leave a significantly adverse impact on the share values of US internet giants. In that sense, current internet governance structures are not doing badly at least for business.
I think the bigger foreseeable risk for the private sector is more about the deterioration of diplomatic tensions between nations due to the flawed internet governance. For example, if China and EU shut out US internet goliaths out of their antagonism against the status quo or mistrust in the independence of US corporations from national interest, that will bring about significant negative impact for the private sector.
MH & JS: You worked for the largest private equity firm in Japan and now run your own private equity company there. Where do you think Japan should stand in the growing debate between major powers on the future of internet governance?
TS: That is a tough question. It will surely stand by US given the long-term alliance, but I cannot think of any particular role that Japan can play in the debate right now, especially in politics.
Some Japanese corporations will be internet giants in the future, playing a larger role in internet governance as representatives of the private sector. For instance, LINE, a message/SNS application provider born in 2011 that has been riding on the shift from PC to smart phone in internet communication, has gained more than 500 million users in the last three and half years since its inception. Softbank, the largest telecom operator in Japan that is now trying to get into the US market, is investing a lot in robots as an internet communication device, and this could someday make it a dominant player in the sector.
Also, Japan is the first country that introduced Internet Protocol version 6 (iPv6) for commercial use. This experience and the relevant technology may help to formulate the discussion.
Taejun Shin is the founder and representative director at Gojo & Company, a company doing private equity investment and financial service development in developing countries, and a Global Governance Futures 2025 fellow. The views expressed are those of the interviewees and do not necessarily represent the views of, and should not be attributed to, the organizations he belongs to.