Published on October 29, 2023, 9:52 pm

TLDR: Cross-country politics and geopolitical power shifts are causing digital geopolitics to become a major concern for multinational CIOs. Governments are imposing restrictions on digital technology acquisition and usage, trade disputes and legislation impacting global operations are common challenges. CIOs need to focus on protecting digital sovereignty, building local technology industries, achieving necessary military capability, and exerting control over cyberspace governance to navigate these challenges effectively. By addressing these four facets of digital geopolitics, CIOs can mitigate risks and seize leadership opportunities in this dynamic landscape.

Technology governance issues arising from cross-country politics are causing digital geopolitics to quickly become a concern that multinational CIOs need to take the lead on. According to a Gartner survey, 41% of Boards of Directors consider geopolitical power shifts and turbulence as one of the biggest risks to performance. Gartner predicts that by 2026, 70% of multinational enterprises will adjust their operating countries to hedge against geopolitical exposure.

Digital geopolitics is now one of the most disruptive trends that CIOs must address, with trade disputes, country-specific legislation impacting global operations, and government-imposed restrictions on digital technology acquisition and usage becoming common challenges. Brian Prentice, VP analyst and Gartner Fellow, emphasizes the need for CIOs to familiarize themselves with this new reality and prepare for its impact.

Geopolitics refers to the influence of geography on power relationships in international relations. This competition between nations extends to various areas such as economic, military, and society. Due to the increasing significance of digital technology in these areas, digital geopolitics has emerged as a distinct category with its own unique impact.

CIOs have a crucial role to play in assessing corporate risk and potentially rearchitecting digital systems. They should focus on managing or leveraging four key aspects of digital geopolitics:

1. Protecting Digital Sovereignty: The concept of digital sovereignty introduces complex compliance obligations for multinational enterprises. Governments exercise their legislative and regulatory powers, including privacy laws like the GDPR and extraterritorial legislation, to address this issue. CIOs must proactively ensure that their IT organization’s operating model aligns with current laws and regulations while communicating how IT supports compliance across the enterprise.

2. Building a Local Technology Industry: The technology industry attracts attention from policymakers worldwide due to its size, rapid growth, strategic importance, tax revenues generated, employment opportunities provided, and absence of specific national resource requirements. Governments are investing in nurturing their domestic tech sectors. CIOs can engage proactively with governments by localizing initiatives in countries where there is a strong integration between local expertise and government co-innovation support.

3. Achieving Necessary Military Capability: Growing digitalization in national military and security operations creates limitations on the availability of certain technologies within different countries. Enterprises and CIOs are influenced by cyber warfare developments and the digitization of existing warfighting and security technologies. To minimize disruptions, CIOs must establish a vendor and technology risk center of excellence, responsible for regularly assessing key suppliers’ exposure to evolving government restrictions.

4. Exerting Direct Control Over Cyberspace Governance: National competition for control over cyberspace governance directly impacts multinational enterprises’ operations. As digital technology permeates all aspects of society, governments seek to align their technologies with their core values and citizens’ needs through protected national digital infrastructures. While CIOs may not have influence over these machinations by governments, they can educate the executive team about cross-national competition for cyberspace control and its implications through an annual briefing on the cyberspace environment.

In conclusion, the influence of technology governance in geopolitics necessitates action from CIOs who must navigate complex challenges emerging from cross-country politics. By understanding and addressing the four facets of digital geopolitics – protecting digital sovereignty, building a local technology industry, achieving necessary military capability, and exerting direct control over cyberspace governance – CIOs can position their organizations resiliently to mitigate risks and seize leadership opportunities in this dynamic landscape.

Note: This article is adapted from FutureCIO’s post on “Geopolitical risks present 4 leadership opportunities for CIOs.”

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