The growing importance of big data is threatening to become a geopolitical battleground leaving tech companies on the front line.
Broker Willis Towers Watson has warned the move toward economic nationalism resulting from the Covid-19 pandemic, along with the EU technology regulation, is causing increasing concern to the technology sector, and may result in lasting impacts on supply chains and IP.
Speaking at the launch of the broker’s White Paper into Managing Political Risk in the Technology Sector, Laura Burns, US Political Risk Product Leader, Financial Solutions, said the tech sector faced geopolitical volatility as the worth of data increased.
“If ‘data is the new oil,’ as the saying goes, might Big Tech be the new Big Oil? Today, it appears that competition for dominance in high technology may become central to geostrategic competition, just as oil did from the 1850s to present,” she explained. “As these Big Tech companies operate, increasingly they may collide with the geopolitical objectives of Host Countries and Home Countries. The technology sector will continue to develop and adapt but its ability to work in a volatile business environment is critical, as the last year has shown.”
The broker’s white paper has been developed in conjunction with country and sector analysts from Oxford Analytica and outlines some of the key factors which are creating growth in technology companies seeking political risk insurance. Based on in-depth interviews conducted with a panel of external affairs and risk management professionals at the world’s leading technology companies.
It identified a range of geopolitical threats facing technology companies in 2021.
These include the rise in economic nationalism and the growing wave of EU tech regulation. There are also concerns over growing levels of political uses and abuses of technology, against the backdrop of political aftershocks of COVID-19.