Nearly 75 years ago the term ‘Iron Curtain' was coined. We were told by then-British Prime Minister Winston Churchill that it was descending across Europe. And for the next 40+ years it would divide the US and western Europe from the USSR. Today, a technological divide looms in a similar way: a Digital Iron Curtain.
Cybersecurity, data protection and international trade laws the world over are becoming tools to force companies onto one side or the other of this digital iron curtain. Europe did its own [lighter] version of this several years ago when it announced its GDPR regulations and in the aftermath more than 1,000 news outlets stopped their availability in the European Union.
More recently measures creeping into day-to-day business emanate from the US or China (of course that's not to say that they cannot emerge from elsewhere). The nature of geopolitical instability means that one international event, trade embargo or general policy change could create a series of ripples, affecting how businesses operate day-to-day.
The looming inevitability of a digital iron curtain has not impacted the economy in a major way yet, but some enterprises are seeing increasing signs of division. Huawei is being frozen out of various sectors of the US, with some European countries following suit. In addition, the US Commerce Department announced restrictions to TikTok and WeChat access.
Why you should be concerned about geopolitics
The challenge with a virtual phenomenon is that it's difficult to clearly see where it's descending, who it will affect and how it will affect them. Characterizing the divide as Alibaba vs Amazon or Tencent vs Facebook definitely misses the point.
In practice countries such as Kazakhstan, Uzbekistan, Kenya, Sri Lanka, Vietnam and Indonesia are anchoring themselves to Chinese technology (powered by Chinese funding). Higher levels of dependency mean any changes to international trade policy or technology standards could affect sales, data or even the workforce. The US has moved ahead with similar ‘expansion' plans, such as its Clean Network program. Technology, like any other resource, is being used as a tool of persuasion by all sides — affecting not onlycompanies from those countries, but also anyone who does business with them.
This is why businesses should be concerned with geopolitics and issues of international relations. The trajectory we're on suggests that the world may have to live with two competing technology standards, which will strain businesses who need to maintain operations on both sides. Whether it's for sales, supply chain or product development, companies have been international since the Internet became ubiquitous…how long can they stay that way?
Underneath the surface of geopolitical instability lies the well-known challenge of building resilience. How can an organization structure its IT, its workforce or its processes in order to help lessen the impact of unexpected change? Technology may be the nature of this particular problem, but it is also inherent to the solution.
Businesses have been investing in multiple cloud platforms for a few years now and in ways to keep them unified. A fractured, non-digitalized enterprise cannot hope to survive, never mind compete across this digital divide, of course. The pace of regulatory change and the reaction time needed will be too fast. However, an organization will win if it can operate in two connected ‘siloes' — using an independent integration layer to operate across a multi-cloud environment. It must have full visibility of both sides but allow no crossover of the core technology. Continually evaluating the effectiveness of those processes is also essential.
Resiliency across geographic fault lines — an enterprise action plan
It is important that these geographic fault lines or regulatory differences do not hamper global enterprises' access to global markets.
To ensure this, enterprises should:
- Get a picture of what software is deployed and where; what data is stored and where; which territories do these things transit through? Practise Enterprise Architecture Management for a polarized world
- Conduct a global, geo-political IT risk assessment including regulatory impact and IT 'source of origin' analysis
- Thoroughly define business processes exposing any fault lines or breakages in their supply chains that now lie across the political-geographic divide
- Stress test their integration technology to establish whether it can cope with competing and possibly contradictory demands. Can they operate two business models simultaneously?
- Assess their independence — customer lock-in has traditionally been software vendor driven but now is more complex. Does the business have enough independent technology or a diverse enough portfolio of systems
The nature of instability is that it's hard to know what's coming next. The best that businesses can do is to take steps that shield them from the worst effects of change: can we keep operational, if only partially? Can we keep the business going?In practice that means using data in a smart way, integration across the business and using technology to carefully manage and monitor processes.Being resilient to external forces is definitely the mantra from 2020 that should carry us forward.