Since last week, the Wall Street Journal story has been haunting me, sitting on my desk awaiting my response. The story explains how China has sharply dropped the importation of U.S. grain, notably genetically modified varieties that are viewed with considerable concern. Grain companies are reporting losses of tens of millions of dollars and lawsuits are everywhere because the grain that was grown used seeds for which the genetic composition had not yet been approved by Chinese officials (or, it turns out, the seed control authorities of other nations).
What is fascinating to me is that we are now seeing the same battles over information—the small packets of data that grow and blossom into knowledge. National borders are becoming new firewalls that are intended to protect the interests of those behind the walls and thwart the carriers of those packets of data from achieving entry. It turns out the embedded genetic variations within the seeds are not much different than a computer virus or two—once inside the border, they can render irreversible change in the conditions of what lies within.
Industry representatives—the companies that make the seeds—are calling for global trading standards and more transparent documentation of the origins of seeds, and their adaptation into the current varieties. Standards and transparency would enable, in theory, more rapid regulatory approvals and, as a result, access to larger global marketplaces. After all, the GMO seeds are being altered merely to inhibit weed resistance and improve yield.
But, in the midst of the current oil wars, perhaps there are other forces and considerations at play. Is China properly concerned if, for example, they fear the inbound seeds actually could fester and fail, causing widespread famine and hunger, because of intentional, adverse modifications? Is China merely delaying the importation of new varieties so they can genetically dismantle the new varieties and create competitive equivalents (like generic pharmaceuticals) so they do not have to import at all (and export the cash required to pay for the imported seed)?
Dow Chemical is willing to sell a new GMO corn to American farmers, but only if they feed the corn they raise to American animals and not to grain companies! So, now we are seeing a supplier impose restrictions on the resulting products made with their raw materials? It takes a heartbeat for me to envision similar restrictions on the use of information assets—oh, wait, that is what privacy laws represent—public law export restrictions that limit the use of personal information to only disclosed purposes and under controlled security.
According to the Journal article, China’s market is so important as a percentage of the market that other manufacturers have announced they will not release new seed varieties unless and until approved by China itself. That is real market leverage—keeping GMO products from US and European markets even when they may improve yield and productivity.
So, what are the lessons of this story for digital trust?
First, the national borders serve as filters. But they are no longer filtering the physical asset, they are filtering at a genetic level of detail, the composition, provenance, and forecasted utility of the asset. To do so, the rules have become much more extensive, but the discretion of their application also seems opaque—no one really knows what the Chinese are evaluating for the reported 7-10 years it takes to secure approval.
We are doing the same with data; building new rulesets that serve to administer the borders of our systems and restrict the entry of data assets that do not meet our rules (e.g., malware filters are the simplest illustration). But, as with seeds, the more complex the rules, the slower the velocity of transit across the borders. With both seeds and data, corporate wealth projections are disrupted, income (and profits) are lost.
Second, accountability has become paramount. The lawsuits are flying—seed companies against the “patient zero” manufacturer of the new strain, farmers against seed companies—because the grains purchased, grown, and then re-exported are allegedly new strains, not previously permitted by China. No one can buy, grow, harvest, export, or import grain without a new level of transparency into the full supply chain of the genetic production process itself.
With data, the same patterns are emerging. Our systems are demanding greater reporting and transparency into the sources of information, the rules by which the data has been governed, the authenticity of representations as to its completeness, accuracy, and authorship. New rules, new complexities, slower velocity, and slower income.
Third, as we are seeing with seeds, there is always the basis for questioning the real reasons for transparency and accountability. In a global market, competitive differentials are narrowing; time to market is compressing; and financial success often is awarded to those who narrowly avoid being caught stealing innovation. Customers who demand transparency can quickly become tomorrow’s competitors—consultants see this all behavior all the time. They transfer knowledge on how to do X, and the next thing they know their clients are offering X2 to their competitors.
Standards can help, of course, to level the playing fields. But if everyone plays by the same rules of play, competitive advantage will always be found in the smaller parts for which no rules have been authored—like the genetic make-up of the seeds.
To me, what will be fascinating is which appetite paves the path forward. Will it be our human appetite for food (and the grains that we and livestock eat) or our human appetite for knowledge (served in the form of digital information)? Without both, life will not be sustainable. But if our borders become even stronger barriers, we will not cooperate but will fight to get what is on the other side of those borders. And, in that scenario, life is also not sustainable.
The alternative is to author governance structures that enable trust to be placed in the products of our manufacturing (whether seeds, automobiles, or information) from inception, open borders with open knowledge and transparency, and rigorously enforce the misrepresentations of truth.