Invasion of Ukraine Could Create Tech Disruptions

with Paul and myself. We've had a lot of conversations today, certainly market implications, supply chain implications, political implications, military implications.

How do you think about it when it comes to the technological side of this, Yeah, absolutely, First, thank you for having me, and as we all are thinking about the implications of the invasion in the Ukraine, the natural industry to go to his energy, but of course energy is going to be affective, but there's another industry that is going to be deeply affected in that technology and UM, I fear that there are sor three fronts where technology

is going to be affected. One is the Ukrainian I T sector, which is a pretty significant player in the I T space. They are the top I T destination for you know, in Eastern Europe, and there are many international companies that have got their I T work being done there by an excellent group of tech professionals in Ukraine, and many of those operations are going to get disrupted as the invasion moves further and further into the major cities,

and certainly into into Kiev. And so that's the first place that I think we're going to see an immediate impact, and then there's a longer term impact, and that has to do with the semiconductor chip industry. The Biden administration is already threatened that if Putting invades Ukraine, he would put a chip blockade on Russia. And the impact of that could be a lot of uncertainty in the semiconductor sector, which is already suffering from massive supply chain bottlenecks and shortages.

And what this is gonna do is it's going to create additional chaos in semiconductors, which is not good for certainly not good for Russia, it's not good for the rest of the are not good for the United States. Last year, the US last one percent of his GDP because of chip shortages, and this is going to make things worse. And the other issue regarding chips is that Ukraine is the largest supplier of a critical gas called neon that is used for semiconducted lithography and that's going

to get cut off. Russia spotifive pent supplier of palladium, another very important ingredients in semiconductors. So we're looking at a pretty significant crisis is if this war goes on for a long time. And then the Toyle issue that I worried about it is cyber attacks because when putting back against the wall, the one thing that he is really probably the world leader in is in cyber weapons.

And you can see the semi the cyber security firms UH stock prices of all valid which is a signal that everybody needs to prepare for cyber attacks across the board. So do you believe that US companies, global companies, international companies have and have they been prepared for this? Do you think? Or is this just so much out of left field? Yeah? This is you know, of course this has been building up for a while and companies have been preparing. But the problem is that there isn't that

much wiggle room. I mean, everybody's still trying to recover from all the dislocations that were caused by COVID. So we just think about the displace meant of the I T work. I mean, where is this work going to go? We are facing a massive I T talent shortage globally, and so you wonder, you know, if the Ukrainian chech whizzes are out of commission, where is this these jobs

going to be taken. In other parts of Eastern Europe are pretty saturated, places like India are are are full, you know, remote workers in different parts of the world. They already operate in circumstances that are not particularly conducive to doing a lot of high end I T work. So I worried that there isn't a lot of slack in the system and companies haven't really built contingency plans

across the bold. Is there a sense that you know, I think Wall Street might be telling you today, Is it like the financial markets came back so dramatically here in the afternoon that perhaps this will be a short lived issue in terms of disruption. Um, how long does this have to go on before you get really concerned about some of these some of these issues supply chain issues. Yeah. So you know, if there is a war, UH and and as we all know, wars can UH can take

different forms. I mean, right now we're seeing you know, some of the initial cities where you know, Russian armaments are moved in their primarily uh, you know, setting off explosions in the UH in the fringes of the cities and not in the commercial centers because Russia doesn't necessarily want to take those up. So it's possible that you could still continue to get work done as long as people can get to work, or you know, things settle down and there's just a siege as opposed to an

all out war. So it all depends on the extent to which this gets violent, the extent to which power goes out, the extent to which lives get lost and people have to start fleeing. So this is and, as

we all know, an explosive situation. You know, it's interesting and I think about here we are coming off the pandemic, and here's something that I don't think it was on everybody's worry list heading into UM dean that I do wonder UM this move to make sure that you've got domestic production of masks or semiconductors or you name it has to some extent. Do we need to kind of

roll back globalization? Can we? Or we have no other choice that we kind of need to because of what we've seen over the last couple of years and then again what happened this week. Yeah, you know, of course this is going to cause everybody to start thinking about how do we reduce our exposure to some of these more volatile parts of the world. Unfortunately, the semiconductor industry

we just use as an example. Uh, you know, American industry, it's manufacturing of semiconductors has gone down significantly in the last couple of decades, just down to about now. Much of America's contribution is in chip design and R and D and so, and you know, we are this talk about investing in American manufacturing. But as far as the Ukraine Russia situation is concerned, the primary contribution of Ukraine Russia is in critical gases that go into a semiconductors photography.

I feel like we're not going to go to produce those gases at home. I mean, that's that's a natural resource. That's a good point, right, those are natural resources, and we may not have a choice. Um buckhar thank you so much, really appreciated, bukshar Chuk Vorty. He is the Dean of Global Business at the Fletcher School at Tufts University. On the phone from Boston. So when you wake up tomorrow, what are you be looking for? Let me push my blue button. I'm gonna be looking at oil. How less

oil is gonna be trading. Yeah, and I'm gonna be watching the futures market coming off of China and into the early hours pulse. We need a pleasure to have you here. Thanks for having this fun all right, everybody, have a good and safe evening.