As geopolitical climate heats up, SMEs look towards ‘data sovereignty’ for answers

It wouldn’t be wrong to say that new technologies like 5G, Artificial intelligence, the Internet of Things or the cloud have become an inseparable organ of modern businesses. But as business dependence grows on these innovative tools, we are witnessing more and more governments trying to take greater control of their citizens’ data and using the strategic significance of technology as bargaining tools in international trade disputes.

The risk of technology ‘balkanisation’ from government action is a real threat that businesses of all sizes should be aware of.

Some of the latest examples of government action include blacklisted tech giant Huawei and its international battle with the US government for access to its markets, the EU’s crackdown on tech giants to secure citizen privacy, Russia’s attempt to build an isolated ‘sovereign internet’, and Australia’s order to store certain health data of its citizens locally.

As a cloud industry insider who has worked with UK businesses for many years now, I believe these data-related regulations and disputes between nations are a dangerous trend and highlight the need to look at the issue of ‘data sovereignty’ more closely.

A majority of SMEs are still very much at the start of their journeys in understanding these concepts, after all an SME is less likely to be thinking at the international level. However, despite the more local nature of SME businesses, these issues are crucially important because their suppliers and customers are more likely to be using data across differing jurisdictions. I have noticed that many of them struggle to understand this changing geo-political climate and its impact on data policies.

Unlike the past when everything was straightforward – you owned the hardware and the software and also the means of protecting it — today’s cloud-led storage means that most businesses are not aware of their data security processes and policies of the vendor before bringing them on board. 

While an increasing number of business leaders are opting for cloud suppliers to store their office data, they must be careful while choosing the cloud vendor as it is a partnership of absolute trust. Businesses should be also aware where their data centres are located, or where their data is being held if they are working with hyperscalers like Amazon, Microsoft, and Google.

Summing up, I can say that no SME is insulated from the changing geo-political climate. Business leaders should safeguard themselves from heavy GDPR fines by choosing their vendor with utmost care, and by understanding where their data is located and the rules to abide by for the success of their venture.