The geopolitics of AUKUS + business implications

In September 2021, the United States launched an unprecedented trilateral security partnership with the United Kingdom and Australia.

A deal that calls for Australia to build a fleet of world-class nuclear-powered submarines.

A deal forged as a bulwark amid rising tensions with China over disputes ranging from the South China Sea to Taiwan to shaping the governance of the amorphous Indo-Pacific region.

Most certainly named by a bureaucratic committee and not by communications pros, the clunkily named AUKUS or Australia, United Kingdom, and United States security pact is the most significant security arrangement among the three countries in a generation.

According to the Congress Research Service, attention initially focused on the proposed transfer of nuclear propulsion technology to Australia; however, observers now say the pact’s plan to develop advanced technologies and other military capabilities over the longer term may prove to be equally significant.

AUKUS is not a submarine deal.

Forty-one nations have submarines.

Any nation that wants a submarine can get a submarine.

But only six nations have submarines that have nuclear propulsion.

Any nation wanting a submarine with nuclear propulsion needs the technology.

A nation can build nuclear technology.

A nation can borrow nuclear technology.

A nation can buy nuclear technology.

A nation can even steal nuclear technology.

In coordination with the United Kingdom, the United States is boldly moving into the future of global security.

The United States is now sharing the crown jewels of its military technology, nuclear propulsion, with an ally for only the second time in 65 years (the other time being with Britain).

The sharing of America’s crown jewels of its military technology opens the door for nearly all knowledge to head to Oz.

In April 2022, AUKUS leaders committed “to commence new trilateral cooperation on hypersonics, counter-hypersonics, and electronic warfare capabilities” in response to China’s tests of its hypersonic missiles, which Chairman of the Joint Chiefs of Staff General Mark Milley described as “very concerning.”

AUKUS is like the Berlin Wall falling.

Antoine Bondaz, a Research Fellow at the Fondation pour la Recherche Stratégique, wrote that for China, the pact between Washington, Canberra, and London is “the realization of a longstanding fear: the multilateralisation of American alliances in the region. Today, it’s Australia and the United Kingdom. Tomorrow, maybe Japan will join.”

Later this afternoon, President Joe Biden will reveal the latest AUKUS nuclear submarine plans alongside United Kingdom PM Rishi Sunak and Australian PM Anthony Albanese at Naval Base Point Loma.

Politico reports that the event in San Diego, which could include a walk atop a submarine, will feature details on how Australia aims to acquire nuclear-powered submarines.

The geopolitical business implications of AUKUS are three-fold:

1) The AUKUS alliance will further stabilize the friendship between the United States, Australia, and the United Kingdom, securing this trilateral relationship for generations.

2) AUKUS will be a lasting feature of British foreign policy and the clearest example of what the tilt to the Pacific and the talk of ‘global Britain’ actually means. Between the launch of the magnificent HMS Queen Elizabeth (R08) and this deal, the United Kingdom is sending a strong signal to its reversion as a proper global seapower.

3) For Washington, Canberra is becoming more critical than London daily. Businesses should look for continued commercial opportunities in Australia and the Indo-Pacific region.

AUKUS is a big bet.

A big bet that places energy, resources, technology, and the attention of Australia, the United Kingdom, and the United States firmly in the Indo-Pacfific for multiple generations.

If you need help with geopolitical intelligence, Caracal is here to help.

Caracal lives and breathes at the intersection of globalization, disruption, and politics, home of the world’s most savvy participants.

Caracal can help you navigate today’s interconnected geopolitical business environment. Learn more here.

Enjoy the ride + plan accordingly.

Marc

ITK Quick 15 | October 25

Here are today's actionable insights for better communications:

1. Two dozen American military personnel were wounded last week in a series of drone attacks at American bases in Iraq and Syria.

2. The White House has accused Iran of 'actively facilitating' some attacks on US military bases in Iraq and Syria.

3. Canada, the US, and the UN call for 'humanitarian pauses' in the Israel-Hamas war to get aid deliveries to Gaza civilians.

4. Danish PM said Denmark has been 'naive' about China and now seeks to 'de-risk.'

5. Finland suspects Chinese ship's anchor damaged gas pipeline.

6. The UAW is starting to strike SUV plants, focusing on the Big Three's most profitable plants.

7. Qualcomm unveils new PC chip in challenge to Apple + Intel

8. Mitsubishi confirms China exit.

9. A bipartisan group of 42 attorneys general is suing Meta, alleging features on Facebook and Instagram are addictive and are aimed at kids and teens.

10. Nearly 1 in 4 adults feel lonely, according to a new Meta-Gallup survey.

11. A third of Americans believe tipping culture is "out of control."

12. Jim Kwik advocates that you should create a not-to-do list.

13. F1 has a boredom problem.

14. The NHL will launch its version of "NFL RedZone" called "Frozen Frenzy."

15. Saturday's volleyball match between Wisconsin and Nebraska drew 612,000 viewers on Big Ten Network.

Need more?

Caracal is here to help navigate today's interconnected business environment with intelligence, strategy, engagement, and education.

Caracal works with senior executives responsible for geopolitics, corporate affairs, public affairs, stakeholder engagement, and communications.

#AlwaysBeCommunicating

-Marc

Ben Sasse, Paddy Cosgrave, and Free Speech in a Hyper-geopolitical World

On October 10, University of Florida (UF) President and former US Senator Ben Sasse dropped a note in strong support of Israel outlining steps the university would take to protect UF Jewish students and free speech on campus.

Sasse wrote, "This is always true: (The United States) Constitution protects the rights of people to make abject idiots of themselves."

The US Constitution does protect free speech and fear from arrest, lawsuits, or other legal consequences.

But as Paddy Cosgrave, founder of the famous tech conference Web Summit, discovered, the free market can regulate free speech.

Cosgrave resigned his Web Summit leadership position after major tech companies, including Meta, Google, and Intel, pulled out of the event over his comments on Israel.

In an October 13 tweet, Cosgrave described Israel's assault on Gaza as a war crime.

Though Cosgrave later denounced Hamas' attack and posted a public apology for his statements on Web Summit's website, it was too late to appease the free market.

As we live in an ever-increasing hyper-geopolitical world, not only are employees demanding that companies take a side, but global executives are in a bind over unifying messaging.

Take McDonald's, one franchise in Israel offered free meals to members of the Israel Defense Forces, while McDonald's Malaysia made statements noting it is "100% Muslim-owned" and donated money for humanitarian aid in Gaza.

In recent years, as the job approval of democratic governments globally has cratered, staff and customers have pressured businesses to speak out about political issues — from trans issues and abortion rights to Black Lives Matter — to highlight their corporate values, according to the Financial Times.

But criticism of corporate responses to the Israel-Hamas conflict shows how fraught with risk reacting to geopolitical crises has become for business executives.

The Washington Post reports Jeffrey Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management, has been tracking corporate responses to the Hamas attack on Israel.

Almost 150 corporations have spoken out, either to condemn Hamas's attacks and antisemitism or to express solidarity and support for Israel, according to his analysis, including big names such as Walmart, Pfizer, JPMorgan, Disney, Salesforce, and Starbucks.

My advice for global executives, thought leaders, and influential entrepreneurs is threefold.

One, fundamentally, you need to be more competent in geopolitics, history, and economics.

We live in a hyper-geopolitical world that shows no signs of slowing down.

Realize that we are in what CIA Director William Burns called a "plastic moment" unseen since the end of the Cold War.

A "plastic moment" is when the entire cross-section has reached its yield stress.

This moment is the maximum bending moment that the section can resist. When reached, a plastic hinge forms, and any load beyond this point will result in infinite plastic deformation.

Today, the world is far more crowded, complicated, contested, and connected.

Today, the world sees the West as no longer running geopolitics.

Today, the world is going through a "plastic moment."

This "plastic moment" will challenge the best of global leaders.

Two, realize you can say and do whatever you want if you are independently wealthy and free of securing revenue or status from multinational corporations.

But you must plan accordingly if you have business relationships with companies trading on the New York Stock Exchange or supporting the World Economic Forum. Multinational companies (MNCs) are in the business of revenue and not revolution. The favorite phrase of MNCs is "no comment."

Third, Caracal recommends using the TWIN Framework before you speak.

TWIN = Targets to Win, Influence, and Neutralize.

In a complex communications effort, you will likely have 5, 7, 9, 11, and 25 targets (audiences) that you need to win, influence, and neutralize.

This framework is classic stakeholder management, engagement, and situation awareness.

Of the 5, 7, 9, 11, and possibly 25 targets, identify them and place them into one of three columns - win, influence, or neutralize.

Pro-tip - mathematically, the win and influence audiences should be bigger.

Once you have sorted out the stakeholders and mapped where they land, this will give you a good sense of whether you should proceed freely or cautiously.

I believe that Cosgrave mapped nothing and hit send.

Whereas Sasee holds a history Ph.D. from Yale and spent eight years in the US Senate, he had the wherewithal to speak confidently, knowing how his words would land.

Global executives, thought leaders, and influential entrepreneurs need more book smarts, situation awareness, and the TWIN Framework to succeed in today's hyper-geopolitical world.

Caracal is here to help.

Caracal believes successful communications requires intelligence, strategy, engagement, and education.

Caracal is here to help you succeed in today's interconnected business environment.

Enjoy the ride + plan accordingly.

-Marc