Nationalism, regulation critical risks for tech sector – Willis Towers Watson

Nationalism, regulation critical risks for tech sector – Willis Towers Watson | Insurance Business

Nationalism, regulation critical risks for tech sector – Willis Towers Watson

A move toward economic nationalism resulting from the COVID-19 pandemic and European Union technology regulation are critical risks to the technology sector that could result in lingering impacts on supply chains and intellectual property, according to a new report from Willis Towers Watson.

The report, “Managing Political Risk in the Technology Sector,” was developed in conjunction with analysts from Oxford Analytica. It outlines the top geopolitical risks facing technology companies in 2021, including:

  • Economic nationalism
  • EU tech regulation
  • Political uses and abuses of technology
  • Political aftershocks of COVID-19

The report found that regulatory restrictions may lead to expensive shifts in value chains, with examples including:

  • Data localization requirements implemented by public authorities that restrict the collection, storage and accessibility of personal, government, and other data
  • Measures to restrict the applications of machine learning and other types of artificial intelligence

“If ‘data is the new oil,’ as the saying goes, might Big Tech be the new Big Oil?” said Laura Burns, US political risk leader, financial solutions, at Willis Towers Watson. “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. And as these Big Tech companies operate, increasingly they may collide with the geopolitical objectives of host countries and home countries.”

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“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,” Burns said. “At Willis Towers Watson, we aim to help our technology, media, and telecoms clients identify and mitigate unique sets of risks to help them continue to grow.”