Thumbnail photo by Oleg Gospodarec on Unsplash.
The CEO of a technology multinational company made an interesting point in an article published by McKinsey. For him, maintaining separate legal entities is no longer enough to preserve market access:
“It’s about having a completely different tech stack to comply with local regulations. The cost of doing business globally has just gone through the roof.”
In the same article, the leader of a European consumer-goods company explained that diverging standards had doubled or tripled the company’s technology costs.
Recently a report from the Hinrich Foundation warns that politicisation of semiconductors could split the industry into isolated geopolitical spheres, with competing standards and conflicting US–China regulation.
In my previous article Why a fragmented world rewrites the rules of standardization, I developed three possible geopolitical scenarios for standardization. The first scenario is managed pluralism, where major blocs keep essential economic and technical ties despite building higher walls. International standards still matter but they now share the space with stronger regional rules and private consortia. The second is hard fragmentation and digital decoupling. This is the escalation phase. Blocs build entirely separate tech infrastructures and compliance silos, forcing companies to adapt products, certifications, and compliance processes for each market. Finally, collaborative competition, where governments realize that major, systemic crises like climate change or cybersecurity require cross-border tools, using international standards as political stabilizers.
Taken together, the examples in the McKinsey article and the warning in the Hinrich Foundation’s report look increasingly like the second scenario, hard fragmentation, a direction already taken in strategically sensitive domains.
What does this shift from global interoperability to parallel technical and compliance ecosystems mean for companies, and what must standards bodies do to prevent voluntary standards from becoming part of the problem rather than part of the solution?
