Innovation is the strategic priority over the next two years for technology, media and telecoms businesses, but increased regulatory scrutiny is a challenge, according to a WTW report.

Companies in these sectors are at the forefront of change while also facing disruptors, and they are feeling pressure from the speed and scale of advances in areas such as artificial intelligence.

“Without constant innovation, firms fear being left behind by their rivals or pushed aside by nimble growth-hungry start-up companies,” WTW says in the report, based on a global survey.

Some 51% of technology groups and 49% of media and telecoms companies named AI and machine learning among their greatest opportunities. The greatest threats to success in the next three to five years were cyber and data privacy issues, regulatory and antitrust challenges, business interruption, supply chain disruption and the speed of disruption innovation.

Ransomware attacks were the biggest cyber risk, cited by 62% of respondents, while 67% said regulation changes were the biggest supply chain risk and 55% said regulation was the biggest obstacle to achieving strategic objectives.

WTW says for much of this century, governments and regulators have given technology a “free pass”, either because of its benefits or because it has moved too quickly to keep up.

“As new technologies such as AI and 5G weave into every strand of industry and society, the stakes are becoming too high to ignore,” it says. “Governments are taking an increasingly assertive stance on technology regulation to secure their own supply chains and industries, and restrict harmful impacts on everything from child safety to the democratic process.”

In the technology sector, restrictive policies covering ownership, market dominance, data, AI and 5G are being enacted across the world’s main trading blocks.

WTW says a standout theme revealed by the survey is the increasing interconnectedness of the technology, media and telecoms sectors.

The survey, conducted in May, involved 600 senior decision-makers in the three sectors from countries across Europe, North America, Asia-Pacific and Latin America.

The report is available here.