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Yves here. In discussions about potential collapse scenarios, we have occasionally highlighted how our reliance on semiconductors and increasingly fragile power grids—strained by escalating demand from AI data centers—could trigger failure cascades leading to dire consequences. This article delves into more immediate vulnerabilities arising from our complex and interdependent digital systems.
By Dean Curran, Associate Professor, Sociology, University of Calgary. Originally published at The Conversation
As digital systems become more integrated into our everyday lives, users are increasingly at risk, facing growing vulnerabilities. High-profile data breaches, such as the Equifax breach in 2017 and a recent cyberattack on Marks & Spencer, illustrate how business operations and personal data on the internet remain exposed to threats.
Unfortunately, it is likely that little action will be taken to mitigate these risks until a major societal crisis unfolds.
My research suggests that our current methods of managing risk and innovation are significantly flawed. Digital technologies are reshaping social interactions through new tools, communication platforms, and AI advancements. Although these innovations are powerful, they inherently carry risks of failure and vulnerability to manipulation.
Governments often struggle to differentiate between genuinely beneficial societal contributions and those that are harmfully detrimental.
The digital economy comprises “businesses that increasingly depend on information technology, data, and the internet for their operation.” Companies dominating this landscape are conducting a large-scale social experiment, reaping the majority of the rewards while shifting the risks onto society at large.
This poses the risk of a systemic digital crisis, which could range from widespread failures of essential infrastructure—like electricity or telecommunications—following a cyberattack, to manipulative actions that compromise existing systems, rendering them hazardous.
There are striking parallels between the trajectory of the current digital economy and the 2008 financial crisis. In particular, we are witnessing in the digital arena a phenomenon described by American sociologist Charles Perrow as “tight coupling.”
Perrow argues that when systems exhibit high interconnectivity without adequate redundancy to absorb failures, it can lead to catastrophic outcomes.
Moreover, systems with high complexity are typically recognized as being more vulnerable. Unexpected risks and connections can instigate failures that propagate throughout the entire system.
Increasing Interdependence
The current digital economy shares many of these traits. Its business model is predicated on rapid expansion, prioritizing scale over sustainability.
Both the lead-up to the 2008 financial crisis and today’s digital economy are characterized by a growing interdependence coupled with diminishing redundancy. For instance, in the financial sector, this manifested through extensive borrowing to amplify earnings, leaving minimal resources available to absorb losses.
In the digital sector, the imperative to continually gather data exacerbates interdependencies amongst datasets, platforms, companies, and networks. This enhanced interdependence constitutes the core business model of the digital economy.
The decline of redundancy in the digital space is evident in the ethos of “move-fast-and-break-things,” where digital firms aggressively eliminate competitors and analog alternatives to their networks.
Additionally, the rapid growth of these digital giants contributes to the overall complexity of the digital economy and its monopolistic networks.
Despite the obvious warning signs in today’s digital economy, there is a significant difference from the circumstances leading up to the 2008 financial crisis. During the latter, a partially finance-driven prosperity masked impending dangers; today, the indicators of risk in the digital landscape are glaringly apparent.
Incidents like the WannaCry attack in 2017 and the NotPetya malware caused billions in damages. More recently, the CrowdStrike failure in 2024 resulted in thousands of flight cancellations and disrupted television broadcasts. The prevalence of hacks, ransomware attacks, and data breaches signals a fundamentally fragile system.
The emergence of AI has exacerbated these vulnerabilities, introducing new challenges such as AI hallucinations and a surge in misinformation. The pace and scope of AI technologies are projected to heighten existing threats to confidentiality, system integrity, and availability.
This is the most troubling aspect of the situation: substantial system risks are apparent, yet they are not being directly addressed, and the processes that escalate these risks continue to gain momentum.
This indicates a fundamental issue within our political framework. While we have a capacity for regulation post-crisis, proactively preventing future crises remains a significant challenge.
