Technology and globalization. The two go hand-in-hand, right?
Do a quick search on the internet and you’ll find a lot of articles, like this one, suggesting that technology brings the world together.
But not so fast! Let’s take a look at what is actually happening.
If we look behind the scenes, at the macro events going on it the geopolitical environment, we’ll see that we are on the verge of a very interesting, very powerful and very under-reported sea change.
The world governments, sometimes intentionally and sometimes unintentionally, are actually taking actions which are going to pull us back into regional and separated spheres again.
We have been watching this trend as part of our commitment to the future of business on the Future Done Right™ Show. This is such an important part of the shaping of human history that we should all be knowledgeable about what is happening and plan accordingly.
This is really different than what people predicted for a long time.
Let’s jump into what’s really happening right now after a little history.
A Lot of Globalization Was An Accident
A lot of the globalization we see today was an accident. It’s not like there’s been any major effort by world powers to actually globalize the world. Actually, for the most part, the opposite has been true. Most countries, and the EU, work to protect their interests. We don’t see countries actually giving power away to some mythical world government. Sure, there were some efforts to communicate between countries and create peace, but on one global power was intentionally trying to unite the human race as one.
Instead what has happened is that technology, largely unchecked, has pulled the world together. It’s gotten easy, and cheap, to communicate globally. And many of us have enjoyed getting to know our global neighbors and how much we have in common.
Meanwhile technologies have been rolled out on a global scale. More and more we all use the same stuff pulling us together. Microsoft Word, Gmail, SAP and Sage are all software platforms that are global in name recognition and use. Some American, some Europoean.
Until recent events most people around the globe all used the same software and no one thought where any of it came from. But as we’ll see the word is changing a lot more people are paying attention to the where and why of software and regulations.
Regulations Are Soon Going To Pull Us Apart
The Global Data Protection Regulation, commonly referred to as GDPR, set off a chain of events which may work to pull the globally coordinated technology world apart. Under the GDPR anyone that controls or processes the data of an EU citizen, regardless of their location, is required to comply with EU regulations for data safety.
Many companies around the world implemented GDPR protections and complied with EU law. But some didn’t. Some smaller companies, including some clients of my law firm, determined that the compliance cost of the GDPR was just too high.
What does a US company do when GDPR compliance cost is too high? They instruct EU citizens to not use their software or block them from using their software. The separation of the globe into regions begins.
At the same time many have not been happy with how the US has dealt with cryptocurrency particularly on the capital raising side of building such companies. This has lead some companies international companies to stop doing business in the US.
As you can see more and more companies are going to their global “corners” and starting to disengage internationally.
As fines are handed out internationally for companies like Facebook and Google we can expect that more and more countries and the EU will start to have their own unique regulations. At some point, unlike in the past, the same software won’t work across the globe without significant modifications. This will mean that each region of the globe may find that it has its own unique software, and perhaps, software companies.
We Haven’t Even Had The Global Fight On Regulations, Yet
Earlier we mentioned the GDPR. The GDPR states how companies and users, anywhere in the world, have to treat the data and information of EU citizens regardless of the holder’s global location.
How can the EU tell an Africian company what it has to do with its computers in Africa?
Well under traditional notions of international law they can’t. Subject to international treaties each country generally gets to regulate what happens within its borders. It is a true land grab for the EU to potentially fine companies that are not in the EU.
Expect, at some point, to have some fun cases of international law when enforcement actions start crossing continents and oceans.
The result of such cases? I would guess it will mean more international division.
It’s becoming clearer and clearer that the global gloves are off. In December, 2018, US authorities asked Canadian authorities to arrest the Chief Financial Officer of Huawei, one of China’s largest tech companies.
All of this stems from US charges of fraud and obstruction of justice which are being levied against Huawei. As this global drama plays out the battle between the world’s superpowers becomes something for all to see. The US states it seeks accountability while the Chinese claim unfair play.
Companies, like Huawei, are more and more being pushed back to their home country where they are protected by their home government.
Maybe this gives us more of an idea why Facebook is getting such a low fine from the US government. They are playing on home turf.
A New Tech Arms Race?
Some are speculating that we are at the start of a technology arms race or a new cold war. In an excellent piece Michael K. Spencer talks about the coming technology cold war between the world’s superpowers.
Could it really be that the international superpowers are ready to fight each other for technology dominance? Could we really be ready for a new cold war?
I don’t think it’s as crazy as it sounds. In fact I think the warning signs are there are we moving that direction.
Some Are Speaking Out And Acknowledging It
Make no doubt world leaders are taking this issue very seriously. Valdmir Putin, of Russia, has made it clear that he believes the country that controls Artificial Intelligence will control the world.
If Russian leadership is so clear and outspoken on his views of the power and need for technology could other countries be far behind? It seems clear that if Russia has the memo on the power of AI that the Chinese, Americans and the EU are thinking the same thing.
Everyone country wants to be on the right side of this.
But what about individual companies? Surely they are safe, right?
Companies Are Picking Sides
In an employee memo released in October, 2018 Microsoft stated that the US Military will have the full support of Microsoft. In the memo Microsoft recognizes they are a US company and that while they have to balance global needs that their loyalty is to the United States.
Meanwhile, Huawei, after being expelled from the US, we can guess where their loyalty will be.
Add to this mix that the EU has handed massive fines to Facebook and Google and it starts to look like the era of a level global playing field may already be nearing an end. Every company needs to get aligned with its home country to ensure its long-term survival.
What Does This Mean For The Future?
My personal bet is that we are already seeing hints of the future. Technology, and tech companies, are about to be pulled into regions and countries. Soon it will be harder and harder to be a true global player and participate in the entire world.
Each country and region may soon have its own social media platforms meeting the demands of local regulators. Some in the US already are arguing that Facebook should be treated as a utility with public access. If the regulations continue to grow it may be impossible to truly have a global social media again.
Whether we are on the verge of another cold war or whether this is just economic protectionism is yet to be seen. What does seem to be clear, however, is it is getting more and more complicated to be a truly global company. With the fines and regulations it is not for the faint of heart.
We may not be far from the days where there is no longer any such thing as a “global tech company.”
What We Need To Be Aware Of
We as business owners, and global citizens, need to be aware of these macro trends. The ideal of limiting information flow and technology access globally surely seems like a step backwards.
Not knowing and understanding other countries and cultures, seems to the author, to be a giant step back for humanity. This could lead to more misunderstandings and even war.
But no one is thinking about humanity. Each actor is thinking about themselves and their best interest.
What should we do about this trend? I think it’s time for a global conversation we are not having.
What do you think? Do you think we have a cold war coming?
What do you recommend?
Join me in the comments below with your thoughts.
By: The Our Shawn McBride, a speaker, trainer and consultant on The Future of Business, the host of The Future Done Right(TM) Show and long-time business attorney. If you want regular content on the future of business subscribe to get new blog posts from us here.
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