Digital geopolitics of growing importance to companies
Due to the increasing importance of digital technology, digital geopolitics is emerging as its own unique category of impact. Technology governance issues emanating from cross-country politics have led to digital geopolitics rapidly becoming an issue for multinational Chief Information Officers, according to marketing and research firm Gartner.
The company says a survey shows 41% of board of directors see geopolitical power shifts and turbulence as one of the biggest risk to performance. By 2026, 70% of multinational enterprises will adjust the countries in which they operate by hedging to reduce their geopolitical exposure, the comp[any predicts.
“Digital geopolitics is now one of the most disruptive trends that CIOs must address, with many now dealing with trade disputes, legislation coming from one country that impacts global operations, and government imposed restrictions on the acquisition and use of digital technology,” says Brian Prentice, Gartner VP.
Gartner says CIOs must play a pivotal role in assessing corporate risk and, if required, rearchitecting digital systems. They will need to manage or exploit four distinct facets of digital geopolitics, the company says:
Digital sovereignty
- Digital sovereignty will be a primary source of complex, dynamic and expanding compliance obligations for multinational enterprises. CIOs must be proactively engaged in ensuring that the IT organization’s operating model and practices reflect current laws and regulations in place.
Technology policy
The technology industry is of great interest to public policymakers around the world due to its size, fast growth, strategic importance, tax revenue, employment possibilities and lack of requirement for a specific national resource advantage.
Efforts to establish a domestic technology industry provide CIOs with an opportunity for proactive engagement with governments. They must localize specific initiatives into countries that have the best integration between local expertise and access to government co-innovation support.
Government restrictions
The growing digitalization of national military and security operations will limit the availability of some technologies within various countries. Enterprises and CIOs are impacted by the emerging sphere of cyberwarfare, as well as the digitalization of existing warfighting and security technologies.
CIOs can no longer count on the availability of technology used by the enterprise for its operations in any country in which it operates and will likely be faced with restricted and mandated suppliers.
To minimize disruptions, they must establish a vendor and technology risk center of excellence, chartered with a regular assessment of the exposure of key suppliers to evolving government restrictions.
Cyberspace control
National competition for control over the governance of cyberspace will impact the operations of multinational enterprises. Governments are increasingly concluding that they need a protected national digital infrastructure.
CIOs can advance the executive team’s understanding of cross-national competition for control over cyberspace and the impacts to their enterprise’s operations by leading an annual cyberspace environmental update briefing.
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