‘Digital fragmentation’ – the rise in restrictions on the free flow of data, IT products, IT services and IT talent across country borders – is disrupting the global business environment and could inhibit companies’ strategies for growth and innovation

This was the finding of a report, released today, from Accenture, although it concluded UK business leaders are leading the response to the challenge.

The findings suggest that the global trend towards ‘digital globalisation,’ powered by free-flowing data, is giving way to ‘digital fragmentation,’ driven by increasing barriers to globalisation.

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It found that 90% of UK chief information officers (CIOs) and chief technology officers (CTOs) feel their IT strategies and systems are vulnerable to these increasing barriers; 52% extremely so. Asked whether these increasing obstructions make it likely that their company will choose to exit a market or to delay or abandon market-entry plans in the next three years, 84% of UK respondents agreed, compared with 74% of global respondents.

Alert to the risks

UK business leaders seem more alert to the risks that this fragmentation presents to digital growth, with 70% believing that it compromises the ability to use or provide data and analytics services across national markets (compared to 54% of respondents globally), and 62% believing the same about cloud services.

UK respondents are also at the vanguard of taking tangible action in response. For example, 62% are already in the process of reorganising their global IT architectures and governance structures in response to new barriers to globalisation, compared with 51% of global respondents. The majority of UK respondents are already investing in automation to offset potential labor restrictions, compared with 67% of global respondents.

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Commenting on the report’s findings, Armen Ovanessoff, principal director at Accenture Research, said: “Contrary to the rhetoric of many digital evangelists, national borders do matter. Business leaders are waking up to their responsibility in helping shape the rules for our digital future. When we consider the profound transformations ahead in areas like artificial intelligence, bio-technology and the Internet of Things, it is clear that this is just the beginning of a complex journey that demands cross-border and cross-sectoral cooperation.”

“UK business leaders seem acutely aware of these trends. Recent political upheavals may have made them more sensitive to the need to adapt business strategies and operations to the evolving global geopolitical and economic landscape.”