Dictators are taking a new approach in their responses to use of the internet in popular uprisings, according to Google’s executive chairman Eric Schmidt.

“What’s happened in the last year is the governments have figured out you don’t turn off the internet: you infiltrate it,” said Schmidt, speaking at the SXSW conference in Austin, Texas.

“The new model for a dictator is to infiltrate and try to manipulate it. You’re seeing this in China, and in many other countries.”

Schmidt was interviewed on-stage alongside Jared Cohen, director of the company’s Google Ideas think tank. The session, moderated by Wired journalist and author Steven Levy, took the pair’s The New Digital Age book as its starting point.

Levy wondered whether their enthusiasm for technology’s potential role in popular uprisings has been dampened in the last year by events in Egypt, the Ukraine and elsewhere.

“We’re very enthusiastic about the empowerment of mobile phones and connectivity, especially for people who don’t have it,” said Schmidt. “In the book, we actually say that revolutions are going to be easier to start, but harder to finish.

He suggested that governments have realised that simply trying to block internet access for citizens is unlikely to end well – partly because it shows that they’re “scared” – which may encourage more people onto the streets, not less. Hence the infiltration approach.

Cohen talked about a recent visit to the Syrian border, where he heard about checkpoints where military personnel demand people hand over their devices and passwords, so they can check what they have been posting on social networks – or even what their friends have been posting.

Schmidt was pressed on the last year’s revelations of surveillance by agencies including the National Security Agency (NSA) in the US, and GCHQ in the UK.

“The solution to this is to encrypt data at multiple points of source. We had already been doing this, but we accelerated our activities,” he said.

“We’re pretty sure right now that the information that’s inside of Google is safe from any government’s prying eyes, including the US government’s… We were attacked by the Chinese in 2010, we were attacked by the NSA in 2013. These are facts.”

The conversation moved on to leaks, with Cohen talked about leaking, and the fact that leaks are age-old, but what’s new is “the ability to do it in bulk”, adding that “there’s a danger in people self-appointing in relation to the task of what should be known and what shouldn’t be”.

Schmidt and Cohen met WikiLeaks founder Julian Assange on their global travels, and debated that exact question.

“I think both of us felt who gets to decide what information is made public is a pretty fundamental issue in a democracy… I don’t think we want random people leaking large amounts of data,” said Schmidt.

“I don’t think we want random people leaking large amounts of health records or tax records, for example … The information, once disclosed, is there forever – and can be used against people.”

It was a logical leap to Edward Snowden, with Cohen citing studies of the public perception of Snowden over the last nine months to suggest a new aspect to leaks.

“There’s a celebrity factor around the people that are doing this now, which lends itself towards more copycatting,” he said. “There’s a real concern, which we talk about in the book, about the nature of celebrity driving more and more of these.”

Why is that a problem, if there is a public-interest argument in the information being made public? “People get hurt,” said Schmidt, suggesting that the more documents are leaked at once, the harder it is to identify individual references that may put someone’s life at risk.

Eric Schmidt and Jared Cohen on-stage at SXSW. Photograph: Stuart Dredge/The Guardian Photograph: Stuart Dredge/The Guardian

The conversation turned to the potential for “autocratic countries” (in Cohen’s words) to band together to “edit the internet” as it’s seen by their populations. Schmidt said such “balkanisation” is a big concern for Google.

“Imagine if the Arab world decides to delete all references to Israel?” he said, before pointing to current examples elsewhere in the world.

“It looks like people are going to use child safety as the starting point. Russia just passed a law nominally about child safety which pretty much allows arbitrary takedown of videos,” said Schmidt, noting sardonically that based on takedowns so far, Russian children must be particularly interested in videos expressing opposition to the regime there.

“There’s something strange, or at least duplicitous, at starting from something where we all agree, and then using it for other purposes,” he said.

Cohen suggested reasons for optimism: the internet in its current state is trans-national in nature – even if Iran and a group of other countries (for example) try to balkanise the web “they’re not just up against their own citizens: they’re up against people around the world”.

The pair also talked about the impact the internet is having on young people, with Cohen suggesting that wherever they visited in the world, feedback from parents was that “kids are coming online younger than at any other time in history, and the things they’re saying and doing are far outpacing their physical maturity”.

“At the end of the day, parents maybe need to have the data permanence conversation years before they have the first sex conversation, because it’s going to be relevant,” he added, noting that he is due to become a father himself in five weeks’ time.

Schmidt joked about some of Cohen’s more far-fetched plans for regulating his child’s digital activity. “When she is a teenager and her friends come round, they are going to all have to hand over their cellphones!” admitted Cohen, to laughter from the audience. “I didn’t say it was a good idea. I said it was aspirational…”

Levy asked about the current unrest in San Francisco, where some local residents are pushing back against tech companies – Google included – over real estate prices, but also over the culture around the tech industry.

“In San Francisco the gentrification story has been going on for a very long time – as long as I’ve lived in the Bay Area, which is 40 years – but it’s clearly gotten worse, and the tensions can get worse,” he said.

“A longer term solution is to recognise that you can’t hold back technology progress… You’re much better off organising society to take advantage of that technology.”

Levy wondered whether stories like WhatsApp, with 50 employees, selling to Facebook for up to $19bn, might just provoke some of these tensions? “Let us celebrate capitalism!” said Schmidt. “19 billion dollars, 50 people? Good for them! Congratulations.”

He also defended the move towards more automation in manufacturing, while admitting that it will cause tensions that technology companies must work to solve.

“In the automated world, incomes will go up for people who work with computers and work with robots, and they will go down for people who don’t embrace it,” he said. “And that is a problem.”