Gartner refers now to the ubiquity and importance of digital technology as it intersects with countries’ geopolitical aspirations in “digital Geopolitics.” According to Gartner’s Research Vice President David Groombridge and his co-workers, this is a disruptive trend in digital competition among countries. 

Gartner claims executives had concerns about the location of their enterprises long before the Russia-Ukraine War. In fact, 43% said Gartner was majorly concerned by deglobalization.

Although this may not be the best solution, it is possible to stay in the region and pull current accounts from vendors. This is an issue for all companies who have large talent pools. Analysts predict that clients won’t be willing to stop working as long as there is work. However, they may not be as inclined to expand work for companies in this region with greater risk. This could impact the success of the Eastern Europe technology hub and the companies that rely on it.

The region’s companies are only trying to comprehend basic operational issues. For example, how long will they have to access funds to pay employees based in Russia. Financial restrictions from the West may limit their ability to pay workers. Also, making sure that workers have internet access. The conflict will continue for as long as it is raging. Tech firms and clients in the region, and the West, will be more concerned about the technology limitations and the implications of new product development.

Groombridge explained via email that “the current impacts on software development centers in Ukraine, and other countries around the world have made this more apparent,” and that organizations must quickly reconsider where their supply chains and IT services should come from. The answer is not to rely on reactive outsourcing, especially when there are already severe shortages in digital skills. To relocate IT services, executive must manage a complicated balance between competitive advantage, geographical concentration risks, skill availability, legal and regulatory issues and country risk factors.

The technology sector already had a severe shortage of workers. It can take as long as 70 days for a skilled worker to be hired.

According to one Wall Street analyst who had traveled all over the region, “Silicon Valley is home to the most talented people.”

The development of tech talent can be difficult. It’s not as easy as moving a factory to another location.

The people problem is a slow process. The analyst stated that these hubs can take time to build.

Intellectual concentration of resources is rare, unlike the global economic centers that are based on the riches and precious minerals found in natural resources, or the commodities used for fuel. Prior to Eastern Europe it was decades ago that a large new pool of software- and tech talent had not been created.

So far, the companies most exposed are managing — building up a cash reserve in advance, relying on data centers outside the region to begin with, building redundancies into processes in the event that systems aren’t functioning. However, stability will be at greater risk the longer this conflict continues. Although there were some cyber-security concerns and limited access to technology to fulfill core tasks, the worst has not been realized. There have been Internet outages in Ukraine, as well as Russian missiles striking key infrastructure. Russia is increasing its invasion of Ukraine, which will likely target larger populations.

According to analysts who study the region, there might be some silver lining. As other countries in the world such as Israel or South America are growing while European nations commit to higher defense budgets now than they were a month ago. Eastern European nations, such as Poland and Romania, may also see additional support for their economies and investments in the future even if Russia continues to be ignored by the international economy.