Geopolitics of IT Outsourcing Activities

Alex Tarasenko
Alex Tarasenko

A vivid background behind most human activities around the world – politics influences business processes in every county. Indeed, nowadays there is a policy behind every industry, and ours is not an exclusion. 

When it comes to the IT sector, its independence has always lied in the rather “cloud-based” nature, as opposed to strictly localized traditional industries. However, modern history shows us that political circumstances may affect the informational technology businesses, just as well. Especially so for software outsourcing, which involves multiple countries each with a unique socio-economical situation.

Today, it gets increasingly disturbing to see the IT industry’s birthplace and key channel of operation – the Internet – become a frequent target of pressure. The te of pressure that stems from governments’ attempts to regulate the political situation through controlling communication. Even more disturbing is the increasing number of so-called developed nations resorting to such a strategy. Not only from a purely humane point of view but from a business perspective just as much.  

Global Internet restriction map

Apart from known oppressive regimes (like North Korea) and some economically unstable countries in Africa (Ethiopia) and the Middle East (Iran), several leading international IT players are entering the internet restriction league, too.

We have already seen this happening in one of the biggest global outsource pools – India, which is breaking records with nearly a hundred cases of nation-wide internet outages this year. China, another major player in the international outsourcing arena, is also known for radically limiting web access for its citizens. And even the cradle of modern democracy – the US – is slowly but surely falling into the censorship trap with its recent TikTok ban campaign.   

In fact, it is easier to name the countries with a genuinely “free” Internet than those without it. A lion’s share of the world experiences some sort of limitations when it comes to accessing the web. Whether in terms of censorship or general connectivity. 

Speaking of which, you may find it interesting to check this up-to-date map of global internet restriction levels – just to have a vague image.

Recent events in Belarus

Now, the censorship “pandemic” has reached Eastern Europe – a primary provider of outsourced talent for companies around the world.

The recent web access outages in one of its largest IT centers have once again proven the fragility of the seemingly well-established business processes. The fragility that comes in the face of political unrest and blind superiority of the government’s executive power over enterprise interests. 

Just to follow you up on the situation – Belarus experienced network fails with both internet and cellular connection across the country last week. The outages came following controversial presidential election results that triggered outrage and protests throughout the nation. 

While it’s entirely unclear what exactly caused it, a reputed Internet observatory has come up with a rather unambiguous conclusion. According to the source, the government has used thousands of keywords to block major digital platforms. Everything from social media sites to websites belonging to big brands and even the news sites went offline. The blockage was apparently executed through deep packet inspection by compromising domains that contain any of the popular brand names. That, in turn, should have created an impression of a malfunction. However, evidence shows it was neither a malfunction nor a technical failure. More probable – a result of a well-designed plan.

Notably, the country’s state officials have fallen into a conspiracy hysteria. They are blaming vigorous DDoS attacks from the neighbors for the mass internet outages and are plain out dismissing the facts. Naturally, anyone capable of basic analytics can recognize the point where such arguments become questionable and weak, if not childish. Especially given the particular timing of the events.    

What does this mean for IT outsourcing businesses?

Apart from the protesters clashing with law enforcement, IT businesses took the biggest beating as a result of last week’s events. From missed deadlines and postponed work, to compromised production and lost contracts – both outsourcing companies and software developers within the country suffer a lot from these kinds of political moves. Consequently, the first ones often change their software development partner in favor of a more reliable service provider. Even though it may be less financially attractive, entrepreneurs understand that outsourcing to a politically-unstable country may cost one a business

Frankly speaking, the long-term effect of political instability for IT outsourcers is a lot of cash down the drain. For all parties involved. 

Right now, it is difficult to estimate the economic cost of last week’s Internet blackouts drowning the country in connectivity darkness. The situation didn’t resolve, and nobody knows what happens tomorrow. In most cases, precisely accessing these things is nearly impossible. Such geopolitical issues can potentially throw economies years back. Especially so if internet-reliable industries are among the primary sources of foreign investment, which is valid for Belarus. 

What’s already clear is that the nation’s reputation as a reliable partner for IT businesses has taken a heavy blast. And it’s a known fact that gaining reputation is nothing like losing it. 

When will the international public restore its trust in Belarus IT providers? How many companies inside and outside the country have suffered from the situation? And most importantly, who will be responsible for the losses? Will the state compensate all of it? These questions need answers. Unfortunately, the available facts make it improbable that the government will prioritize the country’s economic interests over its own. 

Is there any good in the bad about policing the internet?

There’s some truth to the argument that we need government control to keep the market stable. Many developed states have implemented successful policies to assist the IT sector. However, looking at the bigger picture, it becomes clear that the international IT market is a rather self-balancing system. And this system is suffering big-time from the unstable political situations around the world, the likes of which we see quite too often lately. 

The pillar of international trade and business is freedom of information. Limiting it can have drastic outcomes for the local economies, without a doubt.


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