On 17 December, the Access Partnership Advisory Board met to discuss macro currents that will shape policy for the technology sector in the next 12 months.
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.
In Europe, Nokia and Ericsson are the obvious beneficiaries of the tech cold war. In Asia, Vietnam and South Korea will take advantage of that tension as well, as popular destinations for shifting supply chains. The real danger across the board will be the collateral damage of all companies that have supply chains in China.
What will change under Biden? Biden will be less concerned about stifling Chinese innovation than stimulating US innovation and seeking to regain US leadership in tech. There will be policy efforts to ensure that US companies can get the components they need, either by ensuring that these components are “clean” or by stimulating production in the US. Otherwise, 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 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.
Social Justice: How Does Tech Respond?
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).
For tech, social justice goes two ways. Tech provides a route to improve social mobility: by using tech and online learning, less-advantaged children could have a better chance to climb the social ladder. However, tech solutions could also compound existing inequalities through bias in AI algorithms, an increased digital divide and undermined workers’ rights in the gig economy. In 2020, several companies walked away from ethically problematic business opportunities, especially relating to bias concerns over AI, while others paused government sales of facial recognition technology. This trend will likely continue in the 2020s.