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Cultural differences a growing bugbear for IT

High-tech companies looking to expand globally will face increasing difficulties navigating cultural and political sensitivities in various regions, notes analyst.
Written by Victoria Ho, Contributor on

Google's conflict with the Chinese government underscores an increasing difficulty high-tech companies will face as they expand globally, in resolving cultural issues that differ across regions, an industry analyst has cautioned.

In a research note Friday, In-Stat's chief technology strategist Jim McGregor, said local customs and government restrictions in Asia appear to be an issue for IT firms today, and that the Middle East is "sure to create additional problems in future".

McGregor pointed to recent reports of actions by Muslim governments against Western visitors in their countries, such as a case last week where a British woman was charged with indecency in Dubai for kissing in public.

"These cultural differences are sure to highlight other issues as the high-tech industry expands into the region," he noted.

He added that the Abu Dhabi government has made significant investments in IT firms for the expansion of high-tech jobs in the region, and this will bring issues including cultural limitations and censorship, as well as government protectionism, to light--"just as they have in China".

Google has threatened to leave China, following conflicts with the Chinese government on censorship and an alleged hacking, which Google said originated from China. The U.S. search company earlier this week stopped censoring search results in China, throwing down the gauntlet and displaying an open defiance of the government's censorship laws.

In spite of the cultural differences, countries such as China, still hold much growth opportunity for the global IT industry, noted McGregor.

China's rapid gains in high-tech manufacturing, combined with its economic growth and sheer market size as home to the world's largest population, has increased focus and foreign investment in the country, he said.

"The days of the high-tech industry flying under the political radar are long gone," he said.

IT players in foreign markets must increasingly navigate the "global political maze", as well as deal with issues such as censorship and cyber threats, in order to reach the next billion Internet users, said the analyst.

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