Trends 2021

Europe 2021: The dual threat of Brexit and Covid-19

As Europe rides out the effects of the coronavirus pandemic 2021 brings with it the added the added uncertainty of Brexit.

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Trends 2021

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At the start of 2020, there was one thing front of mind for UK and European businesses, regardless of industry, and that was Brexit but by March, it was completely usurped by the coronavirus pandemic, lockdowns and the economic fallout that came with that.

It has made 2020 one of the toughest in living memory. For tech and IT companies, it has meant restructuring of costs, layoffs and a complete re-think of growth projections all while Brexit lurked in the background.

Now as 2020 comes to an end and the world prepares for 2021, this dual threat of Brexit and Covid-19 has not gone away, leaving businesses in an unenviable task of trying to prepare for another rocky year ahead. This all creates more uncertainty.

The impacts on the data economy remain particularly muddled. Once the UK’s transition period ends, the UK will require a data adequacy agreement with the EU to ensure the flow of data can continue. Any disruptions to that flow can create massive headaches for businesses in many sectors.

Getting an adequacy agreement is not a sure bet either. The Irish Council for Civil Liberties wrote to the European Commission in October arguing that the UK’s data protection laws were below par and an agreement should not be granted. That same week a House of Lords report warned “there is a possibility that the Commission may not grant the UK a data adequacy decision”.

Companies doing business into the UK from the EU or vice versa will need to think about alternative arrangements with their customers and partners to keep the data tap on.

It’s a trend that will be difficult for some to overcome but after the tumultuous year that was 2020 and its acceleration of business digitisation, the forthcoming year will present many more challenges and opportunities in Europe.

Catching up on 5G

5G has long been hyped and 2020 was tipped to be the year where this next generation of mobile networks takes off, both through large-scale enterprise deployments, network launches and the availability of consumer devices.

Stephen Douglas, head of 5G strategy at Spirent Communications, said that 5G is “well on track” but the profile in Europe is much different than that of the US and Asia.

“5G is still very much in its infancy. It's going to be another five-plus years for maturity in terms of getting national roll-outs, getting the spectrum auctions available and the iterative standards releases which are going to come along to enable it to move out of just being a consumer type of technology and into the broader industry ecosystems,” Douglas said.

Europe is lagging behind in terms of getting coverage, compared to the arms race approach seen in the US, but it’s “playing a smarter game” in identifying key use cases rather than winner-take-all deployments.

“Is Europe losing out? Maybe consumers are losing out a little bit on not having it fully available but I don't think it's impacting the opportunity for new revenue and that whole digitisation of industry. Europe is well positioned to come out with some of the most innovative use cases around it.”

A potential snag is the European approach to Huawei. The Chinese vendor has faced a swathe of allegations of espionage by the US – claims it fiercely denies – and this has rubbed off on some European counterparts, namely the UK which has ordered Huawei equipment to be stripped out of mobile networks by 2027.

Other countries including Sweden, Romania and Poland have bans and restrictions against Huawei on the table. The Chinese company provides equipment to telecoms in many European countries and any further restrictions could hamper future rollouts.

To add to the challenges, several countries postponed their spectrum auctions in mid-2020 due to the pandemic, which will cause further delays.

Digital Services Act

The coming year will set the stage for further regulation of digital services. The EU is in the midst of thrashing out the details of the Digital Services Act, a vast and broad set of new rules that will govern digital services and update existing legislation like the e-commerce directive, making online services and regulation fit for the modern age.

The DSA will cover everything from policing illegal and harmful content online to fair competition in digital services.

While GDPR upended the way data is managed and protected, the DSA seeks to bring all other aspects of tech regulation under one ceiling with one framework.

The act is still all to play for as member states and tech giants equally jostle for position in shaping the direction of the rules.

Work from home

As the year ends, many people are still working from home and as Europe suffered its second wave of infections in autumn and winter, that trend will continue into 2021. This has introduced a whole raft of new cyber threats as people using personal devices and networks opens up a wider attack surface.

Safi Raza, director of cybersecurity at Fusion Risk Management, said that while the work from home trend will continue into the new year, organisations will need to get smarter.

“This situation is a nightmare for CTOs, and home working cyber related risks will only become greater in 2021 as CTOs and their teams relentlessly explore all avenues from employee training to the deployment of new technologies to help mitigate cyber risk,” Raza said. “In 2021, organisations will need to spend more time and money on endpoint security and end-user training.”

AI will become a more prominent part of cybersecurity strategies in the coming year, he added, as companies seek more advanced tools than traditional manpower.