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Three predictions for 2018

Social media debate, mounting tensions with China are some topics likely to hit fever pitch next year

Shifting attitudes and heightened tensions in society, rising populism and nationalism in politics and technological change are some things that may happen over the next year.

There is a need to scan for future developments to better understand how and why they will affect business in the coming year, which is what AT Kearney's Global Business Policy Council's Year-Ahead Predictions 2018 report aims to do.

Three of the predictions could have a notable impact on the business environment in Asia.

SOCIAL MEDIA DEBATE

First, the debate around the influence social media and Internet giants have over businesses and consumers will likely reach fever pitch next year.

According to a Reuters survey last year, more than half of online Internet users get their news from social media platforms.

In Australia, the government recently announced a probe to examine the effect that search engines, social media and other digital content aggregation platforms have on media and advertising markets.

The inquiry will empower the government to demand information from Google, Facebook and other tech companies.

In the US, Europe and Asia, there are rising concerns about the future of the media sector and consumers being at risk.

This is set to reach a head next year, with legislative proposals targeting Internet companies in three areas: ability to influence public opinion through advertisements, business model of commoditising user data and monopolistic power.

The fight for taxes will also gather pace.

Encouraged by recent successes such as Indonesia's dispute with Google over unpaid taxes owed since 2015, other Asian governments will gain confidence in tax disputes in bids to rein in the tech giants.

CHINESE INVESTMENT

Second, Beijing's recent pressure on Chinese investors to moderate their foreign activities will likely cause tension in 2018.

Issuing new guidelines on overseas investments, the Chinese government a has grouped investments into three categories: encouraged, restricted and prohibited.

Those projects that align with the country's strategic interests, such as the Belt and Road Initiative, are encouraged, as well as those that boost technological advances.

Governments around the world have become wary of the influx of Chinese investment in areas of strategic interest locally, including areas such as technology and critical infrastructure.

The European Commission, for instance, has advanced a proposal for stricter review of foreign takeovers of European Union-based companies on national security grounds.Next year, this tension will come to a head.

Governmentswill find themselves in direct conflict with Chinese investments as they seek to guard key domestic industries.

A lack of reciprocity in accessing the Chinese market will also be cited by many of these governments as a reason to block Chinese investments, especially in areas such as advanced technology, artificial intelligence, robotics and augmented reality.

For most parts of developing Asia that have been eager for Chinese investment, there is likely to be greater scrutiny of such investments to ensure they are truly beneficial for the receiving country.

FACIAL RECOGNITION

Finally, facial recognition software will become more ubiquitous. It is already used more than we think, with a notable uptick last year.

It is used extensively in China to verify ride-hailing app drivers' identities, for e-payments and now to ride subways.

The use of this technology will grow dramatically in 2018.

This will raise privacy and security concerns, which will lead governments and civil liberty advocates to clash over the extent to which facial recognition can be used for surveillance and national security purposes.

Fighting crime is a clear positive for facial recognition technology.

In Singapore, there is the recent collaboration between NEC, a Japanese tech company, and the Ministry of Home Affairs, with work underway to tap Singapore's wide network of closed-circuit television cameras and drones to fight crime more efficiently and effectively

So what have we learnt from all of this? Perhaps that business can, and will, be affected by a multitude of external pressures that cannot always be foreseen or controlled.

But by taking a wider perspective on the most significant developments happening across the world - whether it is geopolitical, economic, environmental or otherwise - we can make informed business decisions at a time of heightened volatility and complexity.

The writer is managing partner 
of AT Kearney South-east Asia.
 A version of this article appeared 
in The Business Times yesterday.

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