“Don’t become a victim of the populist rear-guard fight“
As a CIO (Chief Information Officer) you will be called into the boardroom where the Board asks you how to deal with the technology war between China and the US! Should your organization, perhaps working worldwide, watch out for Chinese technology because it may have embedded logic that could lead to espionage? Or because the US can ban your company? Because your current systems contain both Chinese and American components and it is not clear whether either the US or China will prohibit the use of each other’s stuff in the next round? Do you have to exchange your beautiful, cheap Chinese Android smartphones for something more expensive American?
It can just happen to you as CIO in the coming months. The technology war between the US and China is starting to get serious, with an impact on thousands of companies. It is unlikely that this will just happen, for various reasons.
First of all, this is a game of power between the two largest powers in the world. Both parties want to be the most important economy in the world. America was the strongest in the economic field for decades. But China has built up a formidable position at an almost frightening pace. Not only economically, but also technologically.
Unfortunately, Europe is sinking completely. China argues that it may not have played a significant economic role in the last hundred years, but the three thousand years before. In short: this is pushing your arm at a high level.
And then the second point. Neither Xi nor Trump has a personality that draws back quickly. Trump considers himself the best deal maker in the world and thinks he can push on, so that China will draw back. Perhaps he underestimates Chinese nature: China will never bow to any foreign power. Loss of face is something impossible for the President of China, who recently had himself appointed for life. He will undoubtedly think that he can do everything, even if Trump is re-elected, because the Chinese are never in a hurry.
That does not look good for the rest of the world, who can only watch.
Both powers are well aware, unfortunately also better than Europe, that the economic future depends on technological strength. The future “fluid society” depends on digital wires. Whoever controls the technology is a real buyer.
A problem for both Xi and Trump, however, is that the industrial world has been working together increasingly internationally for decades. A car, smartphone, air plane or MRI scanner consists of thousands of electronic parts that are made all over the world, in turn from raw materials from many different countries. In short: a Chinese smartphone is not purely Chinese, and an American car is certainly not purely American.
“This is pushing your arm at a high level”
The technology war between China and the US will in the short term lead to both parties trying to ban each other’s technology. However, the question is whether that can be sustained in the long term. The global agreements between thousands of companies are not for nothing. Companies have no interest at all in national borders or by which country something is made. They have a sole interest in getting the parts they need, on time, at a good quality and price. They are only bothered by national borders, because it costs money, time and administration.
Back to an autarkic China or America is therefore a dead end. The world is already so entangled that many industries would be hit hard if China and the US actually block each other’s technology.
Both Xi and Trump will no doubt find out that they will have to take a different course in the long term. That will not be simple. After all, what matters is that both powers want to be the most powerful country in the world. This endeavor does not go hand in hand with a global cooperation model, in which organizations and countries are becoming increasingly entangled, as has evolved over the past decades. Here political, national ambitions clash with the new reality of globalization. The digital society where the world goes is different from the classical world of strong nation states.
In the digital society, the hyperconnected world, countries are increasingly cooperating together. Differences between countries, including incomes, are getting smaller. We are in the middle of that process, in which phenomena exist such as the “yellow vests” – directly related to globalization effects – large migration flows (people leave where it is better) and tech platforms that provide uniform services at the expense of national services.
Politicians are responding to this with total cramp, with populist and protectionist actions. But this process of digitalisation cannot be stopped, not even by Trump or Xi, because the benefits for citizens and businesses are far too great.
It would be better to face the new reality. For example, provide more and better IT training and retraining programs to cope with the many vacancies, promote international mobility instead of frustrate, work towards equality of tax systems so that tax competition disappears, eliminate unnecessary trade barriers and eliminate national differences instead of eliminating them. throw.
Messrs. Xi and Trump are both stubborn, so for the time being the world will suffer a lot from their rearguard battles. As a CIO you must therefore prepare yourself for difficult questions from the boardroom. But how? More about that next time.