Following a year like no other, in 2021, businesses and governments will go on the offensive more than ever: to de-risk supply chains, drive social justice agendas, accelerate decarbonization, safeguard competition and insert more fairness into the relationship between those who create technology and those who need it.
In this article, I reflect on five of the top 10 trends, with a focus on the macro currents whose impacts will go beyond technology to affect governments, citizens and industries.
Covid-19 and the future of work
As Covid-19 continues to demonstrate the global economy’s reliance on the Internet, governments will begin to stimulate investment in local companies that offer to build out coverage and reduce the cost of broadband. The goal will be to enable people in every part of the world to enjoy the benefits of the Internet in their professional and personal lives.
The virus’s impact on working methods will lead to further deployment of automation and cloud solutions in the workplace. Data storage will be increasingly decentralized to support remote working, and companies and governments of all sizes will speed up cloud adoption. However, this reliance on remote access will create greater cybersecurity risks and governments will be challenged to have a coherent strategy democratizing the use of these tools rather than concentrating power and wealth in larger businesses.
As increased automation puts some people out of work (while creating new jobs), the technology sector will need to place a bigger emphasis on how it supports the upskilling of workers. This could include creating qualifications for “bite-sized” jobs, which are affordable and accessible, such as user interface design, web administration and database management.
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US-China tension and impact on supply chains
In March 2021, China will formally unveil its new Five-Year Plan, which is expected to double down on its ambition to become a global technology leader with indigenous innovation as its core driver. As it moves forward with the plan, China will continue to use soft and hard power initiatives to exert greater influence internationally over data governance, cybersecurity and technology policy. Coupled with their influence over developing countries, China’s leadership in international organizations will underpin its attempts to renegotiate global rules and standards.
The United States will seek more robust collaboration with allies, namely the EU, to address the China challenge. These trends will shape policies and regulations related to trade, emerging and critical technologies, supply chain security, data governance, data security and privacy in the US, Europe, China and globally.
What will change under Biden? Engagement methods will change, but there will be no dramatic change in policy. Expect continued but more predictable protectionism policies. Export controls, tariffs, sanctions and national security prerogatives will remain vital tools in the US toolbox as it considers a new approach to the challenges posed by China.
Antitrust push against big tech
The idea of using competition policy to regulate digital companies is becoming mainstream. In this context, pre-emptive engagement with competition authorities and their influencers will become a must for Big Tech (and for those that benefit from seeing its market dominance curbed) in 2021. In the US, antitrust is a bipartisan issue that will not go away with a change of administration. US antitrust regulators see that there are opportunities when they reach settlements: to advance not only policy changes, but also to garner significant benefits for their states.
In 2021, there will be greater demands placed on social media platforms with regards to how they conduct business, as well as increased liability for the content hosted on their platforms. There is a recognition that traditional antitrust regulation does not work for platforms, and that incoherence among competition regulators around the world does not help with clarity. This may change in 2021 with the European Commission’s Digital Markets Act (DMA), which could become a baseline for other authorities to follow.
These currents are likely to create some opportunities for smaller players: think cloud service providers who are unable to compete with Big Tech companies for enterprise and government contracts. The momentum is also growing for RegTech, technologies that solve Big Tech’s regulatory problems such as privacy-enhancing technologies, digital identity, age verification and AI content moderation solutions.
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Testing social justice commitments for sincerity
Companies are facing growing calls to ensure compliance with regional human rights and social justice standards. Investors, customers, and employees are demanding both awareness of and support for wider social justice goals. When operating across multiple jurisdictions with notable differences in privacy and democracy standards, companies will find it challenging to balance business objectives with their global social justice narrative.
In 2021 and beyond, companies will be expected to report on their human rights and social justice record, the same way they report on their supply chains or sustainability efforts today. Companies will increasingly be expected to set specific targets for hiring, board composition and promotion into senior leadership for persons from minority backgrounds.
Setting clear benchmarks and making strong symbolic endorsements will only enhance the long-term trend towards aggressive employee activism in the tech sector. If companies fail to follow through on commitments they have made, they can expect a swift reaction from their top talent. 2021 may well be a bigger year for company policy than public policy after all.
Sustained innovation to drive climate action
One of the outcomes of Covid-19 is a vastly reduced global carbon footprint for 2020 – a defining moment in the fight against climate change. Before and since, tech companies have made many promises to address their impact on the environment, but sustainability will cut both ways.
Data centers and cryptocurrencies rank among the world’s largest users of electricity, so companies using these vehicles will need to ramp up efforts to use more (and better) renewable energy while improving electrical efficiency. This will be reflected in more government calls for sustainability audit and reporting. The technology industry will need to reduce its own energy footprint by creating stimuli for energy efficiency through design, advancing energy-efficient technologies. We will also see more business-led efforts, such as industry-generated codes of conduct and best practices, to get ahead of the decarbonization curve. If the sector is unable to do this, the techlash will continue to intensify.
Data and connectivity technologies, such as mobile Internet, video conferencing, cloud computing, AI, and the Internet of Things are accelerating decarbonization and sustainability. Moreover, solutions fueled by AI can also offer environmental benefits beyond decarbonization, such as waste management, cleaning up oceans, and preserving biodiversity. As leadership in these areas is absent from many countries, the technology industry will take a central role in shaping international and national regulatory frameworks in a way that links climate solutions to technology.
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Matthew McDermott, Chief Business Development Officer, Access Partnership