Are small states beholden to the coming Sino-American technological Cold War and the ripples of instability in the wake of the War on Terror? Not necessarily, based on a detailed conversation with Dr. Sean McFate, author of New Rules of War. Over a sunny afternoon, we discussed somber topics ranging from the nature of ‘asymmetrical warfare’ and the US finding itself at sea in a new era of non-conventional power projection and grey area influence peddling. This concept of ‘nexus states,’ that a convergence of geography, possession of key industrial commodities and the ownership of a technological and financial hub that arises from these factors, give certain smaller countries independent firing power in a disruptive global environment. In a sense, the global disruption might even be beneficial.

Dr. McFate outlined a reversion to an almost renaissance era landscape of agile smaller states, billionaire private mercenary armies, a persistent level of insurgency and the rise of private interest groups weaponizing the global market. While the Westphalian order will persist especially in the OECD and industrial East Asia, the global ‘periphery’ of the Third World will expand to encompass vast tracts of Africa, Central Asia, the Middle East, and Europe. But from a Renaissance perspective, this means that given their boutique legal and technological setups, smaller states like Singapore are actually ideally more positioned to act. Provided their flexibility is not constrained by the behemoths of China, India and the US.

Traditional military power in the form of size, combat lethality, and technological prowess have been miniaturized and globally distributed, thirty years after the end of the Cold War. Yet, the US is paradigmatically ‘frozen’ between the asymmetrical structure of the War on Terror and traditional power projection circa 1945. Even Washington’s traditional allies have shifted their focus to the weaponization of market forces and the non-traditional defense in order to counter versatile adversaries. Witness the British reaction to the Salisbury murders, the French and German counter-intelligence attempts against alleged Kremlin election shenanigans, the increasing levels of cyber-security collaboration between Scandinavia and the agile digital economies of the Baltics.

But the question is how would smaller nexus states survive and perhaps thrive in this landscape? Singapore has long emphasized the viability of international market access to its Total Defense framework and the traditional definition lies in territorial integrity. But in a context where a successful defense might refer to real-time retaliatory capabilities, international organizations act too slowly to enforce rules. In an era where all of the Asian industrial economies have substantial global investment arms, the integrity of market access and core technological capabilities is deeply linked to traditional nation-state interests. In essence, nexus states are pushed to act much faster to benefit from the current disruption and protect core capabilities abroad. Israel has utilized its venture capital and technological capabilities to enhance its defense capabilities in the Indo-Pacific. A recent Israeli Defense Ministry video outlines the impossibility of boycotting Tel Aviv’s technological exports given its core functions in consumer tech and basic web-functions.

Imagine an unnamed Chinese smartphone maker will be launching a $100 smartphone with top-of-the-line specifications in Indonesia, South Asia, and Ethiopia. While this is hardly news in the era of 5G and cheap manufacturing, the devil is in the details. Partnering with local law enforcement and big data firms, there will be comprehensive advertising and proprietary digital flows channeled to local and Chinese servers. Think of apps and adverts popping up before every call, email or text even via Western apps like Whatsapp, Skype, and Facebook Messenger. With the content sharing and advertising offsets, the phone boasts premium technology that is typically reserved for Samsung and Huawei’s flagship products. From a consumer perspective, the party with the ‘best product’ at the lowest prices, wins. Data sovereignty is alluring on paper but barring a full balkanization of the web, prohibitively expensive to enforce.

From a traditional Washington Consensus perspective, the solution would be to sue for compliance, implement market access denial and utilize the West’s soft-power capabilities to demonize such a product. Savvy consumers in emerging markets would just look the other way and utilize ‘more secure’ products for dealings with the West. Both sides will declare victory, while quiet players like Vietnam would be busy making accessories for all parties and absorbing the intellectual property regardless of jurisdiction. Further up the developmental ladder, nexus states would be implementing workarounds that link the Chinese e-payment universe with the West’s secure Fintech platforms while inserting strategic intelligence assets in the entire spectrum.

This newer world order is by no means a death sentence for Nexus states, but the window of opportunity is closing. All sides should expect a deadly scramble for the exit.