The latest McKinsey Global Survey on Globalization reveals that a record-breaking 84 percent of executives worldwide believe geopolitical instability will have a significant negative impact on global business, yet few executives claim that their company has taken steps to address this risk. On the other hand, the same executives noted cybersecurity as another top concern for global business and, since the last survey in 2013, have focused the most energy on resolving cybersecurity risks. This shows that executives understand that securing data and digital information plays a significant role in stabilizing the geopolitical landscape and promoting global business.
The internet is now the method of choice for criminals to steal the valuable data of businesses, individuals, and the government, on and off shore. As a result, cybersecurity is now a growing component of geopolitical conflicts. To address this issue, businesses abroad are shifting from globalization to localization of their data (Top 11 Trends S&R Pros Should Watch: 2015). The reality is that the globalization of the internet has put any individual or organization’s data at risk, regardless of their global status. This has driven an increase in data localization laws in countries like Canada, Australia, France and Russia. These laws are a way for countries to protect and control the data generated within the country’s borders.
Localization of data seems like a logical solution. When broken down to the basics, it is much easier to protect something of value if it only has a single point of access, as opposed to multiple access points. With that in mind, cybersecurity is complex and there are equally as many cons to data localization. Localization increases the risk of isolation from the global network. As enterprise architect at Insight, Colvey Martin, states, “Isolating one’s self does not solve external problems.”
Alternatively, the opposition of isolation could lead to the best solution. If businesses refrain from the natural instinct of keeping data breaches and vulnerabilities in their technology hidden, companies could learn from each other. Sharing technology and data gathered from incidents with other companies and even nations can only help address the issue of cybersecurity and help to resolve the risks that come with localization. There already exists an informal forum of CISOs in the Los Angeles area that have seized this opportunity and meet every three to four months for the purpose of sharing information and learning from each other.
Business executives understand the importance of securing data and digital information in the geopolitical landscape. Now it is necessary for businesses and nations to understand the detrimental effect data localization could have on global business and recognize the benefits of collaborating among companies on data security challenges and solution. Sharing this type of information among companies will help address the cybersecurity component of geopolitical instability as well as promote global business.