What Role Will Corporations Play in 21st Century Security?


I had the privilege of sitting in on a fascinating think session today put together by the U.S. Army focusing on future scenarios that could have serious impacts on U.S. national security in the coming decades and well, the role multinational corporations might play in those scenarios was one of the more interesting topics attendees were asked to look at.

Dubbed the Alternative Futures Symposium, the event asked mid-level officers and civilians from the U.S. Army and several other services and nations to look at what types of contingencies the U.S. may have to plan for in the event of a complete global economic collapse, the continued rise of Asia as an economic and political powerhouse and the proliferation of advanced military technology eroding the massive advantage U.S. forces have enjoyed for decades.  Their conclusions will ultimately be included in the Unified Quest program which is meant to challenge and inform the Army’s various “concepts” it uses to help shape itself to fight future wars. 

All these events were examined through the lens of current trends that are rapidly changing the world, from climate change and terrorism to demographic shifts, developments in computing technology and potential for fights over natural resources. However, one of the most interesting trends that participants were asked to consider in their debates about future threats was that of the growing power of  multinational corporations.

The Center for Strategic and International Studies’ Karen Meacham gave a presentation before before participants dove into the issues asking attendees to consider seven “revolutions” likely to occur in the coming decades and how they may shape the 21st Century security environment. One of these revolutions was the multinational corporation as an even bigger player in geopolitics than it already is.

Of the 50 largest economies in the world right now, seven are multinational corporation, according to Meacham. With this trend looking like it will continue to grow,  these corporations may become “almost equal to governments,” Meacham said. This means that, “in some cases, they need to figure out what they stand for.”

“We’re now well beyond the Westphalian” system of nation-state-centered government, Meacham added, noting the challenge to governance these corporations will present.

And the trend of non-state actors becoming more and more influential isn’t limited to corporations. In recent years, The Bill and Melinda Gates Foundation gave more grant money around the planet than the entire budget of the World Health Organization, according to Meacham. “Therefore, the influence they wield is staggering,” she said.

She ended her talk on the rise of multinational organizations by quoting Henry Kissenger (love him or hate him) as saying that governments must figure out how to balance the globalized economy and its multinationals with the traditional nation state construct.

One conference attendee raised another interesting angle to the multinational debate: Where do the loyalties of these extremely powerful corporations lie when their leadership is distributed around the globe? The attendee also raised the spectre of terrorists getting jobs in one of these corporations in order to infiltrate a country they seek to harm. (He, like most attendees, was speaking under Chatham House rules to encourage candid debate on a wide range of ideas.)

While massive companies influencing world affairs is nothing new, just look at the British East India Company or today’s energy companies, the number of new ones rising around the world today is. It’s interesting to see multinational corporations being looked at by the most powerful Army on Earth as it works to inform its future doctrine and operational concepts. Can’t wait to see the results of this session.

— John Reed

  • kim

    Articles like this is the most important reason I read DEFENSETECH.ORG. Incidentally, the readers’ comments is the least important reason I read DEFENSETECH.ORG.

  • Tom

    Which companies they want to defend, there will nothing there in the near future, unless the army will learn speaking Chinese

  • Matt

    Excellent topic. And like with the British East India Company, there are the military and private military forces that help to defend the corporation’s interest overseas. To me, China is definitely taking a page out of the old colonialism book. Look at their latest ventures in Africa or the various war zones?

    One of the scenarios I have been playing in my mind is one in which a corporation’s PMC/PSC would one day actually battle against a non-state actor or a nation’s army? Or even another corporation’s security apparatus? The corporation versus a country, or corporation versus a corporation? I have some hints as to how that would look like.

    In the pre-westphalian time period, it was common to see a PMC fight a PMC. Or for a country to have hybrid armies that composed of a PMC, another country’s army on loan or rented, and their own armies. It was also common for countries to use privateers and issue letters of marque and reprisal. There were all sorts of interesting scenarios during that time period.

    Probably the most relevant to this discussion was the use of private industry to colonize the Americas. Captain John Smith was a contracted soldier who was tasked to defend and lead colonists in early America, by a corporation called the Virginia Company of London. http://en.wikipedia.org/wiki/John_Smith_%28explor

    Another famous American figure is Frederick Burnham, contracted by the British South Africa Company to fight in Africa. He later became one of the founders of the Scouting movement. Frederick was also contracted to protect mining interests in Mexico. http://en.wikipedia.org/wiki/Frederick_Burnham

    Perhaps if we want to understand the forces that will impact this proposed future that challenges the ‘post-westphalian’ nation state, then we should be studying the past more? I know that is where I like to go for some answers.

    • Excellent points, but the thing with a MNC is that they transcend national borders. The Virginia Company and East India Trading company were loyal to the British Crown (primarily because of Mercantilism ). The loyalties of a MNC are ambiguous at best, but I think unequivocally they will invariably act out of self-interest. That definitely leaves room for a PMC -under the mantle of a MNC- fighting a nation or non-state actor, without the US on UN condoning or sanctioning the action.

  • Thomas L. Nielsen

    “Where do the loyalties of these extremely powerful corporations lie when their leadership is distributed around the globe?” – Their loyalties lie with making money! The almighty dollar (or yuan, euro, whatever…..).

    Regards & all,

    Thomas L. Nielsen

  • Ems

    the big diff. is current Corps. do not have their own security forces…they operate at the discretion of the governments of the respective nations. Look at Venezuela for example..the companies there are helpless against Chave’s stupidity.

  • Oblat

    >just look at the British East India Company

    The decline of the British East India company with the British empire is an ironic example. As the empire crumbled they turned to government bailouts and was just such a bailout – the Tea act that triggered the Boston Tea party and the American revolution – thereby losing Britain it’s largest colony.

    Most of the big American corporations wont survive the decline of the empire. There is nothing new to this, corporations die naturally every day and every day new ones spring up in China and India. Undoubtedly many will turn to US government bailouts to under the patriotic pretext of sustaining the empire. The rest will just shrink steadily under the increased global competition.

    The few that will survive will either be a lot smaller or switch loyalties to the larger markets. Already many of the companies that most Americans see as “American” are overwhelmingly dominated by staff in other countries with just a veneer of marketing left in the US. The American-ness is really just a marketing gimmick.

    So will we see the US military bizarrely fighting to defend Chinese commercial interests – given the recent record of supporting Iranian regional interests – it shouldn’t be discounted. We are also likely to see increasing pleas by the US military for help from foreign corporations. When they say these corporations are powerful that’s what they mean – they can help rescue us. They already cry out to NGOs in Afghanistan and the Chinese regarding North Korea help them out of those quagmires while desperately paying anybody and everybody to stave off the war on terror.

    The decline of empires is a long tortuous affair it’s not likely to be anything else this time either.

  • Matt

    One example of corporations using standing armies is the drug cartels in Mexico. They have folks who wear uniforms, use military type weapons, and they are tasked with defense and offensive actions against competitors. Each cartel is a company, and they are purely driven by profit and gaining or holding territory. Countries and/or the Mexican government just get in the way of the battles between these corporations/cartels.

    The Chinese oil companies in places like Iraq use chinese military and local security officers. In Africa, they do the same thing.

    The World Bank is another interesting one. They have a protection unit that follows the CEO and leadership around all over the world. Some folks call these guys executive protection specialists or close protection specialists. But in reality, they are a guard force that is armed and is assigned to protect the company’s assets and people. Most large companies have these types of specialists.

    Google is another example. In order for them to get their ‘street view’ stuff, they contracted with companies that protected the guys that filmed that stuff. So all the mapping done in places like Iraq or Afghanistan, was done with the help of heavily armed security specialists. Of course Google subcontracts this in order to say ‘we don’t use PSC’s in war zones’, but in reality, it is their money and product they are trying to develop.

    Google’s little tiff with China was very interesting to me, and this is a prime example of what the author was talking about. Corporations versus countries.

    Another example is the shipping industry. There are numerous companies hiring fully armed security specialists to protect their boats against non-state actors. I even found one insurer that was trying to stand up a private navy to defend the assets of their clients. Or you have countries like Yemen who offer the services of their navy, for a price, to private industry. Lots of examples.

  • Oblat

    American multinationals don’t stick around in America because they like paying the taxes. They stay because it’s worth thier while to have the head office where the customers and finance was. Both the profligate American consumer willing to sell his future for shiny consumer goods and the cash of the easy cash of the financial bubbles are not things that will last much longer.

    So the answer is that the military wont have a much reduced role. There wont be companies to defend and America’s overseas interests will evaporate.

    Of course the navy will still be sailing around “defending the seas” from everyone except anything bigger than pirates in wooden canoes and saving itself for the return of the Imperial Japanese Fleet. The Airforce will still be chattering on about maintaining a level of air adequacy and the army will be bogged down in multiple overseas quagmires that nobody can work out the purpose of. In other words change will just mean more of the same.