For better or for worse, technology defines global transactions. While technology has connected the world and brought everyone closer, it also has a polarizing effect when it comes to international social, economic, and geographic issues. Intellectually, most thought leaders might agree that geopolitics and technology are inextricably intertwined, but many businesses fail to give geopolitics the attention it deserves when considering digital transformation and modernization.
According to a recent EY study, 63% of Forbes Global 2000 chief executives said technology and digital innovation topped the list of trends impacting their organizations. In that study, the same leaders ranked geopolitics as the least important factor affecting their companies. Perhaps a short-sighted view. For organizations to thrive in a global landscape, leaders need to shift their thinking to understand and address the global impact of geopolitics on technology operations. With an intentional geopolitical mandate, companies can use technology to mitigate risks and stay ahead of the competition.
Waging Geopolitical Conflicts
There are positive and negative uses of tech power in geopolitics. Currently, a $7 billion IT outsourcing agreement backs relations between India and the USA. Similarly, diplomatic relations between the USA and China heavily revolve around the IT manufacturing industry. These and many other technology partnership agreements between countries forward diplomatic relations.
Geopolitical sanctions (the cancel-culture of technology) can add or subtract. Some countries use their technology soft power to restrict other countries from using their technological expertise. Their dependency fans their fear of being canceled and forced out of play — their economy and the companies in it would suffer. The positive aspect of sanctions comes when sidelined companies and countries re-invent themselves and build their own local technology, such as internal payment and transactions processing networks to back up Visa and MasterCard.
Tech Companies as Battlegrounds for Geopolitical Influence
As the 5G industry approaches more than $13 trillion in value, businesses competing for a piece of this lucrative pie run into the countries that are themselves clashing over the selection of implementation companies like Ericsson, Huawei, and Nokia. Another example is the aviation industry, run by all but monopolies. They regulate the international aviation codes and policies, which gives them “soft power” to restrict other countries from developing their own aviation technology.
Tech companies and social media concerns like Twitter have found themselves in the crosshairs of geopolitical controversies. Twitter executives had to apologize for errors between China and India where contested borders made a Twitter user’s post (not a Twitter employee) requiring Twitter execs to take international action. Google Maps is another tech giant application that has stepped into geopolitical muck. More recently, Intel and other companies have pulled out of Russia under political pressure since the Ukraine invasion.
Impact of Technology on Society and Democratic Processes
According to Our World in Data and the World Economic Forum, 3.5 billion of the 7.7 people were online in 2019. Statista.com reports that as of April 2022, five billion individuals use the internet out of a population of almost 8 billion. The number of social media users has grown to 4.65 billion. As a result, the geopolitical dangers are on the rise and include issues such as:
- Increased risk for cyber espionage through social media because people still trust online information.
- Greater potential to inappropriately decide election outcomes.
- More likelihood that world leaders and third parties can manipulate sovereign countries’ internal affairs.
The dangers are growing exponentially. One reason is because users are not being prudent in how they interact with the internet and across social media. The geopolitical and social implications are real. Two recent cyberattacks are but a tiny portion of the assaults on government IT infrastructure, hospitals, power plants, airports and more, as listed in The Center for Strategic & International Studies. In May 2022, hackers targeted Greenland’s healthcare system, causing networks to crash throughout the island. In April 2022, Russian hackers targeted the Costa Rican Ministry of Finance in a cyberattack, crippling tax collection and export systems.
Data Privacy and Localization Norms and Regulations
The internet and the tech industry are highly unregulated because of their relative newness. Tim Berners Lee invented the World Wide Web in 1989, which could hardly have foretold our progress since. However, with time, the Web and its offspring have expanded to every corner of the world, enabling data flow across geographical boundaries. Every country should assess and regulate the data being shared, sent, and stored outside their geographical boundaries. But it appears they are not. Cybersecurity attacks remind us of the continuing problem. Recognizing the problem is the first step to fixing it.
Implications for IT
Addressing geopolitical issues for technology companies and IT departments in every organization transcends politics. The stability of society and democratic processes are at stake.
In the article “Democracy, Technology, Geopolitics,” the authors Sameer Patil and Vivek Mishra say, “Technology is at the heart of contemporary geopolitics, shaping global alignments and defining the contours of global engagements. Frontier technologies, in particular, are inducing a rapid Fourth Industrial Revolution led by emerging technologies such as Artificial Intelligence (AI), blockchain, and 5G.”
Spiderman’s Uncle Ben said to Spidey’s alter-ego Peter Parker, “Remember, with great power comes great responsibility.” Forbes Magazine calls it, Tech-Diplomacy. With porous borders and unlimited access to people’s computers worldwide, companies with great power need to be intentional in exercising responsibility. The responsible thing to do is to develop and enforce international regulations for data sharing and common standards for the underlying technological infrastructure.