Technology governance issues arising from the political relationship between countries have led digital geopolitics to quickly become an issue that the Chief Information Officers (CIOs) of multinational companies must manage, warns the Gartner, Inc., world leader in business research and advice.
According to the most recent survey on the subject, 41% of the Boards of Directors consider changes in geopolitical power and the turmoil generated by these conflicts as some of the greatest risks to the performance of their operations. Gartner predicts that, by 2026, 70% of multinational organizations will adjust through hedging to the countries in which they operate to reduce their geopolitical exposure.
Brian Prentice
“Digital geopolitics is now one of the most disruptive trends, with many IT leaders having to deal with trade disputes and legislation coming from different countries that affect global operations, as well as restrictions imposed by governments on the acquisition and use of digital technology. ”, explains Brian Prentice, Vice President and Analyst at Gartner. "CIOs will need to familiarize themselves with this new reality and prepare for the impact."
Gartner indicates that CIOs should play a key role in assessing enterprise risk and, if necessary, re-architecting systems. They will need to manage or explore four distinct facets of digital geopolitics:
1. Protect Digital Sovereignty- Digital sovereignty will be a primary source of complex, dynamic and expanding compliance obligations for multinationals. Governments address this issue through their legislative and regulatory powers, with privacy laws (such as the LGPD in Brazil), in addition to focusing on extraterritorial legislation. Companies that deal with the citizens of a jurisdiction are required to comply with its regulations, regardless of where their headquarters are located or where their customers reside. CIOs should be proactively engaged to ensure that the IT organization's operating model and practices reflect the prevailing legislature and regulations. The role of these leaders is to be aware of the legal environment and explain to other executives how the IT organization is prepared to offer technology support and compliance for the entire enterprise.
2. Build a local technology industry– The technology industry is of great interest to policy makers around the world due to its size, rapid growth, strategic importance, tax revenue, employment possibilities and lack of requirement for a specific advantage of national resources. Many governments are investing in the development of local technologies. For example, the United States is encouraging regional chip production through the creation of the Useful Incentives to Produce Semiconductor Act (Chips). Another important example is that of Australia, with the formation of the Australian Government Digital Economy Strategy to 2030, which includes the building a dynamic and emerging technology sector as a fundamental pillar.
Efforts to establish a national technology industry offer CIOs new opportunities to proactively engage with their governments. They must localize specific initiatives from different countries to find the best integration between local knowledge and access to government co-innovation support. In power relations in international affairs, the resulting competition between nations occurs in many ways. Theareas, including economic, military and social. Due to the growing importance that technology plays in each of these areas, digital geopolitics establishes itself as an important category.
3. Achieve the Required Military Capability – The increasing digitization of national military and security operations will limit the availability of some technologies in many countries. Organizations and CIOs are impacted by the emerging sphere of cyber warfare, as well as by digitizing existing security and combat technologies. CIOs can no longer rely on the availability of resources used by the organization for its operations in whatever country it operates in, and will likely face restricted and mandated vendors. To minimize disruptions, they should establish an accredited technology risk and vendor center of excellence with a regular assessment of key vendors' exposure to evolving government restrictions.
4. Exercising direct control over the governance of cyberspace – National competition for control of cyberspace governance will impact the operations of multinational corporations. As digital technology weaves itself into every aspect of society, nations are looking to ensure that their own resources reflect and support their core values and their citizens. Governments are increasingly realizing that they need a secure national digital infrastructure. Government plans to control cyberspace governance are beyond the influence of CIOs, but will have profound impacts on a company's ability to operate internationally. These managers can advance the executive team's understanding of overseas competition and impacts on company operations by working through an annual cyberspace environmental update briefing.
