A 10-Year Heads Up On the Next $3.3 Trillion Market

As I discussed in my previous essay “The Greatest National Security Challenge of the 21st Century”, high-level strategists are starting to build a consensus that poor, densely populated and fast growing cities across the world are the number one threat to overall global stability and our future national security.

In other words, large, unstable cities are evolving into the world’s number one security threat.

We have a chilling picture from no less than authority than Dr. David Kilcullen — veteran of many anti-guerrilla campaigns in the Australian Army, who helped write the U.S. Army’s book on counterinsurgency. He’s the author of Out of the Mountains: The Coming Age of the Urban Guerrilla.

We’re nearly helpless to avoid “small wars,” states Kilcullen.

“…Note the long-standing historical pattern in which the United States conducts a large-scale or long-duration counterinsurgency or stabilization operation about once a generation and a small or short-term mission about once every five to ten years — far more often than it gets into declared wars against other nation-states.”

According to Stephen Graham, author of When Life Itself Is War: On the Urbanization of Military and Security Doctrine, the “new normal” has another aspect: these insurgencies will operate in densely urban terrain instead of their traditional haunts — mountains, swamps and jungles.

“Western military strategy was long premised on the avoidance of urban combat, with air strikes the preferred method of subduing large conurbations. Cities were seen as targets, not battlefields. But today, the cityscapes of the global South have emerged as paradigmatic conflict zones.”

“Paradigmatic conflict zones.” Whoa! That term stopped me cold. I had to reread the sentence several times, and boot up the Naval War College part of my brain to figure it out. In short, the term implies that street fighting, and house-to-house, room-to-room advances will be the norm in 21st century conflict. But not the kind we saw in, say, World War II, even at Stalingrad or such.

No, the modern “enemy” will look like any other man on the street until he opens fire. His base will be a hole-in-the-wall restaurant, or a garage or an office building. His outposts will be vendors’ stalls, or even harmless looking children playing in the street.

And against this kind of enemy, we’ll need a new plan.

According to the future policy study, War, Citizenship, Territory, edited by Deborah Cowen and Emily Gilbert,

“U.S. military theorists have asserted that [war plans based on high-tech tactical weapons, like smart bombs] will either fail, or be substantially undermined by global processes of urbanization, especially in the global south cities where they imagine U.S. forces being most often engaged.”

In other words, the next Osama bin Laden won’t hide in a mountain cave or a rural compound — he’ll hide in plain sight… in a Third World city. This makes command of the urban battlefield our top priority.

I could continue with much more background on this new global trend in warfare. But I’ll sum up the idea with a gripping quote from a recent publication by no less than the U.S. Army Chief of Staff.

“High-tech warfare at knife-fight ranges: that’s the ugly future of urban combat. If you thought Baghdad was bad, with its roughly six million people, imagine a ‘megacity’ of 10 or 20 million, where the slums have more inhabitants than some countries. Imagine a city of the very near future where suspicious locals post every U.S. military movement on Twitter with digital photos and GPS-precise coordinates. Imagine roadside bombs that fly because the bad guys downloaded blueprints for a kamikaze mini-drone and built it with their 3-D printer.”

That’s why the idea I’m going to show you today may be central to coming up with the next new weapon in the global war on terror in the coming age of mega slum.
It’s called the “smart city.”

Despite past failures, bureaucrats who run Rio de Janeiro seem to have grasped reality: for a city well on its way to becoming a mega slum, the only solution is to become the world’s first “smart city” — and accomplish the task before that happens.

What is a smart city, exactly?

Think of all the things it takes to keep a city running: power generation, water, road and rail grids, traffic control, waste disposal, policing and emergency services, constant maintenance… the list goes on and on.

Now, imagine that all those things could be tracked by computers based in a central command post. Furthermore, imagine that the city’s computers could make intelligent, immediate adjustments to the flow of utilities, traffic, public safety systems and much more.

Throw in an experienced team of city planners and staff, working shifts around the clock, making decisions the computers aren’t qualified to make, and effecting solutions quickly and remotely, at the touch of a button.

For example, there’s a control room near Rio’s eastside waterfront that looks like it should be managing space flight launches.

Staff in white jumpsuits man computer terminals, while one wall is completely covered with flat screen monitors, showing an ever-changing picture of the city around them. To say it looks futuristic would be an understatement. It looks like something straight out of Star Trek (pictured below).

Rio de Janeiro's Center of OperationsRio de Janeiro’s Center of Operations, courtesy of thenextweb.com

The applications of this kind of control technology to future military conflicts are manifold. For example imagine the edge this type of system would have on monitoring — or suppressing — insurgencies in, say Cairo or Kiev; or planning the defense of, say, Baghdad against an invading Islamist horde. Then again, it might come in handy to deter terrorists in a city like, say, New York.

Of course, we could dwell deep on the overall morality of “Big Brother” looking down, controlling things. Not here, though.

The point is that the tech has already happened. It’s here. It’s out there. And it’s brought to you by familiar names such as Cisco Systems, General Electric, Honeywell and Siemens — just to name a few.

Just to be clear… a “smart city” is NOT just a research program, based on diagrams on the back of a napkin from the local fast food joint.

This is a story you won’t get in mainstream media, either among sports fans or military planners.

Software program monitors utilities through sensors in water pipes, as well as via the electric grid. Sensors even extend out to Yosemite National Park — not a city, obviously, but the same technology — where the tech alerts rangers to fires and other emergencies, and helps coordinate the response. Smart city platforms should be customizable to suit the unique needs of each municipality where it’s installed.

That means in the really dangerous cities of the Third World — the ones most likely to be mega slums in 2050, in other words — the system could be designed to deal with greater than usual threats. Think of massive, armed, swarming mobs like we saw in Somalia in 1993 — leading to the “Black Hawk Down” incident.

But the tech also can work in a much safer, western city, because the system could be much more benign, and designed to focus on different threats, like organized crime and “lone wolf” terrorists.

To be sure, I foresee U.S. military interest in this idea, both encouraging it among our allies and taking advantage of its use in foreign cities where the United States might have a future conflict.

For example, imagine a theoretical U.S. military operation in, say, a large nation in southern Africa in 30 years. If we could access the capital city’s “smartnet” and gain that kind of real time insight into the traffic patterns, the population’s activities and other data, it could make a “hot” hostage rescue far less dangerous for U.S. forces, or aid an interventionist police action.

Remember, in the 21st century, urban warfare has been an Achilles’ heel of the modern U.S. military. To curb violence in Baghdad after 2003 we practically had to shut the city down. Fallujah in 2004 was the toughest street fighting for the U.S. Marine Corps since the Battle of Hue, South Vietnam in 1968.

The point is that urban warfare is an area in which the U.S. military desperately needs to improve, and better conventional weapons and training just won’t be enough.

Heck, in cities you need smaller bombs, not bigger bombs. As smart cities catch on, you can bet the defense establishment will find a way to use them to help our friends, and to work against rivals and enemies.

Independent analysts have pegged global smart city spending at between $100-400 billion in the next five or six years. And with the smart city market expected to reach $3.3 trillion by 2025… well you get the idea.

With the emerging threat of global “mega slums,” and a shortage of answers to the rise of the urban guerrilla, this is a good niche to dominate!

Best wishes,

Byron King
for The Daily Reckoning

Ed. Note: Whether it’s Rio de Janeiro, Baghdad or the U.S., Byron sees opportunities to get ahead of the curve on big defense ideas that will absorb more and more government spending in the years ahead. But mil-tech is just one facet of the investment ideas we share for FREE in our daily e-letter, Tomorrow in Review. To receive the best ideas from the fast-paced ocean of information that’s being produced in this day and age, and to stay ahead of the curve in science, medicine and technology, sign up for Tomorrow in Review right here.

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Byron King

A Harvard-trained geologist and former aide to the United States Chief of Naval Operations, Byron King is our resident gold and mining expert, and we are proud to have him on board as the editor of Rickards’ Gold Speculator and a contributor to Rickards’ Strategic Intelligence.

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