CIO Column

CIOs need to become geopolitically savvy

Ukrainian invasion is shifting the global economic landscape, which is likely to impact CIOs and CTOs.

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If you are reading this CIO column in Europe or the USA, then you are likely to have the impression that the world is united against Russia's invasion of Ukraine. However, in truth, this is not the case; swathes of the world are continuing to trade with Russia, therefore making an end to the war more difficult.

What does this mean for a CIO? The Ukrainian conflict demonstrates a need for CIOs to become savvy about geopolitical issues and to use that knowledge to shape their strategy and decisions because unless they do so, CIOs and organisations could be trapped in some uncomfortable compromises that increase the risk profile of the business.

In a piece pointedly tagged "Friends like these," international business newspaper The Economist revealed that the united front against Russia's invasion of Ukraine is anything but. Forty countries opposed or abstained from the United Nations resolution to condemn the invasion of Ukraine; according to The Economist, this accounts for a quarter of the world's gross domestic product (GDP) and 20% of Russia's exports. Amongst those nations not committing to opposing Russia are titans of technology and business process outsourcing (BPO) India, but also emerging economies such as Turkey, Brazil, Mexico and rapidly growing nations in Africa. Whilst the oil-rich countries of the Middle East have also, to date, chosen "not to antagonise a crucial partner that cooperated with OPEC to prop up oil prices," The Economist notes. 

There may be some distance between political decisions to sit on the fence over Russia's invasion and the large-scale use of BPO and digital development capabilities in India or communist Vietnam. But if there is one lesson from the 2020s so far, it is that global disruptions are defining this decade; they have a significant impact and carry risk. Risks that the CIO is increasingly called upon to analyse and then provide a solution to.

In technology circles, the skills and youthfulness of Asian service providers have been openly discussed, but with little analysis of the deeper foundations of these nations. To date, that has not been an issue, but the conflict in Ukraine could well change all that.

Underpinning the lack of global unity towards the Russian invasion of Ukraine is the burden of the West's past, and not so distant past. In Friends like these, The Economist reminds us that a history of Empires, and more recently, failure to effectively share the Covid-19 vaccines and war in Iraq has led to the Middle East, Africa, Asia and South America viewing the West with cynicism.

Europe and the USA have become closer allies in the face of aggression towards Ukraine, ranging from arming Ukrainian forces to US President Joe Biden agreeing on March 25, 2022 to increase shipments of liquified natural gas (LNG) to the European Union (EU). This will allow the EU to reduce its usage of Russian gas. For most of us in the CIO/CTO community, we grew up in a period of close relations, both militarily and economically, between the US and Europe. Current events could well see a renaissance of that partnership. The expansion east since the 1990s has brought many benefits but looks to have increased in risk in the 2020s. 

Globalisation is largely positive, and as a technology community, we have thrived on access to ideas, skills, cost-effectiveness, and the travel and cultural benefits all of this have brought. But globalisation is a two-way street, with or without conflict; it is important that nations and their technology communities are not just consumers but also contributors. Suppose the conflict in Ukraine has a long-lasting impact on business and economic relations between Europe, the Middle East, Africa and South America. In that case, it will be vital for Europe and the US to be at the forefront of developing technology, technology skills and creating economically viable relationships between one another.

CIOs will, therefore, need to keep a weather eye on geopolitical developments and prepare their organisations and technology for averting risk by ensuring access to skills, partners and technology in markets and cultures that are aligned to their organisation and its customers. Alignment is once again a CIO challenge, but it's global, not internal.