COVID-19 as the culmination of the 3rd Information Revolution- Opinion
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COVID-19 as the culmination of the 3rd Information Revolution- Opinion

 COVID-19 as the culmination of the 3rd Information Revolution- Opinion

The Coronavirus is creating a media revolution of its own. The internet is used in ways we never imagined it could, and tech companies are at an advantage, exploiting loopholes. The internet is now a commodity, but it needn't be

  • In theory, there is nothing wrong when online trade replaces traditional retail
  • Last year the French parliament approved a 3% levy on revenues by Google and Facebook inside the country
  • The Muslim world is that it is the only major civilisation without a virtual world of its own

By: Sergey Matyunin, CCO of Salam Web Technologies DMCC

As the human toll mounts, it becomes harder to take a step back and see COVID-19 for what it really is: the culmination of the third information revolution. 

The previous one took place in the 15th century when Johannes Guttenberg invented a printing press. This created a serious of turbulences in political and economic life in Europe. On a bigger scale, the Christian West, so far dragging behind the Muslim East, leapt forward and, eventually, subjugated the East as well as the rest of the world. 

The parallels with our times are startling.

The current revolution began in the late 1960s when the computing power started to double every two years. Today computers cost one-thousandth of what they used to and about five billion people are constantly online, and many with multiple devices.

Against this background the most significant effect of COVID-19 is that it locked the whole world in their houses. People are staying inside and they spend more - much more - time online. According to Akamai, a firm that tracks web activity, global Internet traffic has already increased by more than 50%. And if experts are correct the lockdowns will continue for weeks, maybe months. 

What we are about to witness, then, is the rapid acceleration of what we have been experiencing already. Brick-and-mortar businesses will be falling even faster and their market share be taken by online competitors. More importantly, we are going to see the biggest ever reshaping of the online world itself, and with it of our real word as well. 

So who is going to be among the winners? And who will be left behind?

Europe will, most likely, be on the losing side. It does not have own Internet companies. Google, Facebook, Amazon, eBay are all based in the US. 

Read: Infographic: MBC Group reveals Covid-19 impact on TV advertising

In theory, there is nothing wrong when online trade replaces traditional retail. Arguing otherwise is almost embarrassing: in the past technological progress has always led to a rise in wages and overall welfare of society - economists call it the compensation effect. Eventually a new economy was born, new workplaces were created and new companies paid tax to support local communities, schools and hospitals. There is no need to worry.

Europeans, however, do worry and worry a lot. And the reason is simple: the old economy, the old workplaces and the old taxes will be lost in Europe while new economy, new workplaces and new taxes will be created in the US.

Last year the French parliament approved a 3% levy on revenues made by such companies as Google and Facebook inside the country. The move infuriated Americans and Donald Trump instructed his most senior trade official to conduct a so-called Section 301 investigation into France’s digital services tax, an open warning of a full scale trade war. The French backed up and postponed the introduction of the new tax. 

But why did Paris introduce the tax in the first place? Because tech companies do not pay taxes in France. They exploit numerous loopholes and keep their tax bill to the minimum. Initially, Paris was hoping that a similar tax on tech companies would be imposed at EU level which never happened and Paris decided to act alone. 

Read: Advertising in a recession- It's tough out there but brands have a way out

Last year, British members of parliament created an all-party group to investigate why Internet behemoths do not pay tax, or pay very little, from their revenues in the UK. Amazon, for instance, paid £14.7 million in corporation tax from its British sales of £2.3 billion that is only £0.63 from each £100 of revenue. Facebook’s UK operations paid £28 million despite achieving a record £1.6 billion in sales and Netflix even received a £51,000 tax rebate from the UK government despite making an estimated £700 million from British subscribers.

The situation seems pretty worrying for Europe. Essentially, it is in a position it has never been before: it will have to push for a new system of international taxation. And do it from a weak bargaining position. 

Yet, the real drama is going to unfold in Muslim countries. Again. 

What is really startling about the Muslim world is that it is the only major civilisation without a virtual world of its own. One and half billion people united by faith, rich history and long cultural tradition do not have a digital space that would be extension of their cultural identity and not that of the West. 

We tend to see Internet as purely technological and, therefore, neutral phenomenon. This is wrong, says Professor Saskia Sassen of Columbia University: the online world is the mirror image of the material world that created it. It is a value chain that promotes certain cultural identity and, as such, the most important instrument of the soft power. 

This explains why China and Russia invest so much in the creation of online reality that would be the extension of their own, not someone else’s, world.  

Read: Dubai Chamber launches a series of webinars to support business continuity

The Internet, if used correctly, can produce a kind of Muslim Renaissance similar in effect to the flowering of Islamic science, culture and economy during the Abbassid period. If not, the Muslim world will eventually be submerged both economically and culturally under the all-permeating Western influence.

One scandal after another – from Edward Snowden’s revelations to Cambridge Analytica’s unlawful harvesting of personal data – shows how Internet companies spy on their users, deceive them and distort their reality. Harmful content, which pervades all social networking sites, has been known to cause irreversible psychological damage to young minds.

As Professor Allen B. Downey has shown, the Internet has a detrimental impact on religiosity. His study attributes 20 percent of the decline in religious affiliation over the past forty years to growing Internet usage.

It is therefore, striking how few companies there are that can become a true alternative to western Internet behemoths. SalamWeb, the only Islamic web browser and Muslim-friendly ecosystem, is one. There should be more. Many Muslims don’t even know that SalamWeb exists. 

The tragic irony is that too many good Muslims, while isolated in their homes, are unwillingly and unknowingly feeding what will become their greatest and the most dangerous enemy. There is no surprise why Russians and Chinese are working hard to have a virtual world of their own. And so should Muslims.

**Opinions expressed in this article do not necessarily reflect those of Mediaquest, AMEinfo or any sister companies affiliated with this media**  

Author
AMEinfo Staff

AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.

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