4 Geopolitical Trends Businesses Need to Watch Now
The Economist has described the global economic recovery as “fast, furious – and fragile.” (Economist, July 10-16th, 2021). The author notes that while the economy is booming in the United States, the boom could be more precarious than it appears.
With this in mind, we asked our Geopolitical experts for their thoughts on what organizations need to be aware of over the coming year.
What are the most important issues affecting global businesses right now?
And how can leaders weather the storm of a fragile global economy?
Jacob L. Shapiro, Dr. George Friedman and Reva Goujon, all internationally renowned Geopolitical experts and keynotes speakers, shared their thoughts on these four topics that they deem to be the most significant factors right now:
US – China relations
Unraveling of globalization
This period seems like “an existential, occasionally manic, moment in time is because the state is reckoning with several compounding structural forces that have been brewing for at least a generation or more and are now bubbling to the surface,” according to Reva Goujon.
Tension between the US and China
These forces, including the growing tension between the United States and China as China transitions from an emerging market to a developed economy, will impact organizations with business interests in China.
As Dr. Friedman says, “The United States and China will have to find a negotiated settlement to their disagreement. Neither wants a war, but neither knows how to back down. How they get there will be vital.”
How will this be affected by Climate Change?
The impact of this tension will be far reaching and include supply chains that are already struggling from massive global shortages already compounded by the increasingly evident effects of climate change.
Jacob Shapiro clarifies the impact of this on both emerging and historically strong nations: “Changes in crop yields, food security, weather patterns, and drought frequency will reshape agricultural markets and also determine how aggressively a food-stressed country like China will behave at the foreign policy level.
“How resilient or resistant a country is to the negative effects of rising temperature will define the limits of a country’s national power, just as countries like Russia and Canada may see their positions significantly improved by a more hospitable local climate.”
All three of our experts point to the rising importance of climate politics over the next decade, bringing another element into an already complex web of important geopolitical factors affecting business.
“The wild card that might define the rest of this year or simply fade away is whether the massive global shortages resolve themselves. If they don’t, then the varying impact on nations will signal significant shifts in power, possibly for a longer term,” comments Dr. Friedman.
Is Globalization a thing of the past?
As nations contend with their individual challenges, the impacts of, as Jacob puts it, “the unraveling of globalization” will be strongly felt and lead to a reorganization of global trade, according to Reva Goujon.
“The European Union is straining between north and south, and west and east. The question is whether the EU will find a coherent course satisfying all, or whether Brexit was just the beginning of the story, “ comments Dr. Friedman.
Jacob Shapiro takes this point further: “A truly multipolar world will emerge in the 2020s, with regional powers seeking strategic relationships and consolidating political, economic, and security interests in their spheres of influence.”
A recent example of this is Russia’s move to restore their old borders, having moved into Belarus and the Caucasus, with the critical region being Ukraine, notes Dr. Friedman. “The question is whether the Russians will risk a military action or work covertly, and how the United States and Europe might react.”
This is only one part of this shake up of national strengths.
Tech wars will make a significant impact.
This multipolar world will see nations creating “spheres of influence” reshaping global supply chains based along tech adoption and innovation. The race for tech supremacy along the lines of AI, blockchain, supercomputing and big data, will definite geopolitical competition in the 2020s, according to Jacob Shapiro.
Reva Goujon agrees citing the impact of the downstream effects of tech adoption on organizations around the world as a major force over the next decade.
The answer to what organizations need to know is obvious: everything.
Jacob Shapiro summarizes this idea perfectly in his comment below:
“The real magic of geopolitics comes from understanding how *all* of these trends and forces are going to affect and interact with each other. They will also manifest very differently in different geographies, which will become all the more important as regionalization increases. If you’re only focusing on one force, you’re already behind the curve.”
For insights on how geopolitics will affect your organization, reach out to us for more information on any of our geopolitical experts.
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Derek Sweeney is the Director of Speaker Ideas at The Sweeney Agency www.thesweeneyagency.com. For 15 years Derek has been helping clients find the right Speakers for their events. Derek can be reached at 1-866-727-7555 or [email protected]