Geopolitics can completely upend your business.
Case in point:
The US department of commerce announced this week that it wants the US to ban Chinese software and hardware for vehicles with a built-in internet connection, a move that would effectively ban Chinese vehicles in the US market.
It comes after growing concerns from the Biden administration about Chinese companies collecting data on American drivers and infrastructure and the potential for foreign adversaries to remotely manipulate connected cars on US roads.
Why does any of this matter, especially if you’re not in the automotive sector? Because it serves as a live example of how geopolitical developments can completely derail an entire industry.
The impact? Businesses in this sector will need to rapidly asses their supply chains, partnerships, and technological dependencies.
This is not an isolated policy, but part of a broader US strategy to decouple critical industries from foreign influence. The immediate effects could mean increased costs as companies find alternative sources. Longer-term? A more resilient supply chain in the US. Companies that can pivot quickly may gain a competitive edge. But only if businesses in this industry adapt quickly.
Which is why geopolitics matters to business.
If you’re slow to respond to these developments, the entire operating landscape can move around you and put you out of business. In this case, we’re taking about industries in the connected technology space. Businesses that are in, or adjacent to the connected vehicle space need to factor in the geopolitical risks associated with their technology partners.
The risks of being caught in a diplomatic crossfire or international trade dispute means that businesses must be proactive in understanding the political landscape in which they operate.
And that’s the lesson for every business leader, especially if your industry is globally connected: you need to understand geopolitics better than any analyst.
Geopolitics is business