Digital trade is crucial for almost every company, but it also introduces new complications. When products or services that contain a computer or can be connected to the internet — which nearly every product or service does — cross borders, cybersecurity risks emerge. Growing concerns that foreign states or corporations can abuse digital products to collect privacy data, plant vulnerabilities, or otherwise cause harm mean that digital products sold across borders are subject to increased scrutiny and controls, and can be targeted for bans — fairly or not — by host governments. Navigating and mitigating these risks needs to be a part of every transnational company’s digitalization strategy.
Navigating Cybersecurity Risks in International Trade
For companies that sell digital products internationally, cybersecurity concerns can have a devastating impact on business — companies can be barred from national markets, get tangled up in politics, and have their reputations maligned across the globe. It isn’t easy to navigate this issue however. Rules and anxieties differ country to country. In general, how a country might react is driven by: national capability in managing cyber risks, the level of trust between the government and business, and geopolitics. Companies can’t control these factors, but they can prepare for them. Specifically a good strategy should involve: building a strong cybersecurity governance culture; preparing to play politics and burnish your cybersecurity image; developing an exit plan for markets, and a re-entrance plan; helping host governments improve their cybersecurity capabilities; and building up your bargaining powers.