“Geopolitical competition and government regulations are poised to remake the digital economy,” notes the global consulting firm A.T Kearney in Competing in an Age of Digital Disorder, - a recent research report. “The global technological landscape is currently being reconstructed, subjecting the once-free and unfettered transfer of data across borders to new and greater digital walls. Terms such as the ‘splinternet’ and a ‘digital cold war’ are becoming ubiquitous, forcing companies everywhere to shift strategies on everything from procurement to customer engagement.” Or, in a nutshell, the world is in a period of digital disorder.
According to the report, the first stage of the world’s digital transformation started in the early 1990s, with the advent of the commercial Internet and the World Wide Web. Over the next 25 year, advances in digital technologies, big data and a wide variety of applications have led to sweeping economic and societal transitions. Over 50% of the world’s population, almost 4 billion people, had Internet access by 2018, a nearly fourfold increase since 2001.
This initial period of explosive growth, light government regulation, and what the report calls digital order, was followed around 2016 by a period of digital disorder. Governments are now intensifying their regulatory activities in an attempt to maximize the upsides of the digital economy while mitigating its downsides. At the same time, governments are pursuing national policies and escalating global competition to take the lead in emerging digital technologies, particularly in AI and 5G wireless networks. “As a result, a global battle for technological supremacy in the 21st-century digital economy is heating up, raising the risk of competing technological standards and creating the potential for an ‘islandized’ digital environment. Altogether, these actions are creating a digital disorder that is becoming more difficult for companies to navigate.”
In particular, firms are now facing a growing backlash against the increasing digitalization of the economy and society. In the past, the technology industry was largely seen as a positive societal force, enabling billions around the world to rise out of poverty and lead more productive lives. Today, by contrast, Big Tech is being challenged on a host of issues, including the dissemination of false and damaging information, the rising inequality between the digital haves and have-nots, and the growing number of cyberattacks, theft of personal data and identity fraud. “In the United States alone, identity fraud increased 8 percent in 2017, victimizing 16.7 million people and resulting in theft from consumers of $16.8 billion.”