The rise of technonationalism. Diverging regulatory regimes. The unfold of “walled gardens.” Polarization like nothing we’ve seen earlier than. The confluence of a number of traits is poised to fully fragment our actual and digital worlds. For corporations, this raises a bunch of latest dangers, from cybersecurity threats to status danger—which, in flip, would require new responses and approaches.

The techonomic chilly conflict

A “techonomic chilly conflict” is already below manner—an ongoing, often-invisible state of battle on the intersection of know-how and geopolitics.

Competitors to dominate the following era of know-how infrastructure—equivalent to electrical autos, 5G networks, and quantum computing—is turning into more and more heated. It’s a high-stakes contest and the nations setting the principles for these applied sciences might safe vital financial benefit, a lot as america benefited over a number of a long time from pioneering the non-public pc and the web.

On the similar time, populist and nationalist leaders have been ascendant in a lot of the world. These leaders have protectionist and interventionist instincts, and a willingness to buck established norms. It’s a mixture which has resulted within the deployment of unconventional instruments to favor home corporations—not simply tariffs and commerce wars, however firm bans and new types of cyberattacks equivalent to weaponized disinformation.

All of that is resulting in the partitioning of each the actual world (e.g., commerce, labor mobility, and funding) and the digital world (e.g., tech platforms and requirements). On this fragmented future, corporations as soon as used to working on a world stage will as a substitute discover themselves restricted to working inside the spheres of affect of their dwelling states. (For extra, see “Techonomic Chilly Struggle” in EY’s Megatrends 2020 report and MIT Know-how Evaluation’s “Technonationalism” difficulty).

Regulators aren’t the one ones fragmenting the digital world. To a big extent, tech corporations have been doing it themselves.

Divergent social contracts

Know-how platforms are right this moment’s fundamental infrastructure, more and more inseparable from the economies and societies during which they exist. These platforms are more and more the place residents get information, have interaction in political debate, community professionally, and extra.

However whereas tech corporations may search to create seamless, built-in world platforms, they actually ship their choices in vastly completely different societies. The social contract of the US is basically completely different from that of China, Saudi Arabia, and even the European Union (EU). So, governments and regulators in numerous markets have been shifting to recast tech platforms within the picture of their social contracts. An early instance was China, which developed its personal platforms that higher align with its social contract than do US-developed choices.

In the meantime, the EU has change into more and more energetic and visual in regulating know-how. Essentially the most outstanding latest instance, the Basic Knowledge Safety Regulation (GDPR), is a precursor of issues to return. The GDPR tackles privateness and knowledge safety, however a lot larger regulatory points loom, from the explainability of algorithms to the protection of autonomous autos (for extra, see EY’s Bridging AI’s belief gaps report). As these applied sciences come of age and change into extra outstanding within the lives of residents, anticipate governments in numerous areas to change into extra energetic in regulating them. Over time, more and more advanced regulatory points and divergent ideologies will create both separate platforms, or platforms that ostensibly have the identical title however ship basically completely different consumer experiences in numerous geographies.

Walled gardens

Regulators aren’t the one ones fragmenting the digital world. To a big extent, tech corporations have been doing it themselves. Walled gardens—closed, self-contained tech platforms or ecosystems—have endured as a result of they’re good for the underside line. They permit corporations to extract extra worth from prospects and their knowledge whereas providing a extra curated consumer expertise. In latest months, there was a rising fragmentation of “over-the-top” media streaming providers, with particular person studios and networks growing their very own subscriber platforms. As a substitute of streaming platforms that hosted content material from all kinds of creators, platforms will provide unique entry to their very own content material—fragmenting the streaming media expertise.


It’s no secret that political polarization has been rising at an alarming price and that social media platforms—whereas not solely accountable—have been fueling the development. Filter bubbles in social media platforms have enabled the unfold of misinformation, leaving platforms with the difficult and unenviable activity of policing the reality.

Worrying as it might be, the whole lot we’ve seen thus far could also be nothing in contrast with what lies forward. As social media platforms change into extra energetic in stemming the movement of misinformation, its purveyors are beginning to search new houses free from policing. Within the weeks because the latest US Presidential election, a rising variety of Trump voters have began leaving mainstream social media platforms for alternate options equivalent to Parler and Telegram. By the point the following Presidential election rolls round, it’s not farfetched to anticipate that we might see right this moment’s social media filter bubbles changed by solely separate social media platforms catering to conservatives and liberals.

At that time, we can have moved from an period of polarization to considered one of hyperpolarization. For anybody nervous social media platforms are doing too little to curb misinformation, think about how a lot worse issues will probably be with platforms that don’t even strive.

Dangers and challenges

The techonomic chilly conflict necessitates a brand new strategy to cybersecurity. “Firms want to protect towards not simply malware and phishing assaults, however weaponized disinformation,” says Kris Lovejoy, EY’s world consulting cybersecurity chief. “We’ve seen disinformation used to assault elections, however there’s no motive it couldn’t be used to focus on corporations. Most corporations right this moment should not have the safeguards and protections they may want within the subsequent frontier of cybersecurity.”

A second problem is lack of transparency. Commerce thrives on transparency, but devices equivalent to firm bans are opaque and seemingly arbitrary. To the extent these devices undermine transparency, they create uncertainty for companies.

The regional fragmentation of platforms by regulation and divergent social contracts will increase the complexity of regulatory compliance and the danger of regulatory noncompliance. Past mere compliance, corporations face vital model and status danger if customers understand platforms to be misaligned with societal values.

A hyperpolarized future will create a number of the most important challenges of all. Shedding the final tenuous bridges between our divergent echo chambers would threaten the whole lot from social stability to the way forward for democracy and the very existence of a shared actuality.

This content material was produced by EY. It was not written by MIT Know-how Evaluation’s editorial employees.