The current geopolitical outlook is fraught with uncertainty, and global businesses are feeling the impact of these risks. Sir Douglas Flint of Abrdn and IP Group plc, and Thomas Friedberger of Tikehau Capital, discussed several key geopolitical and economic trends at the 2024 Page Spring Seminar in Paris. Here are some insights from the event that will help communicators better understand and strategize for a complex global operating environment.

The Rise of Regionalism

The narrative that "globalization is dead" is countered by emerging trends that show globalization is changing, not ending. As Friedberger explains, the true opposite of globalism is nationalism, and while nationalism is on the rise, the overriding trend we are witnessing is a shift toward more regional trading partnerships. Flint pointed to Europe's rapid uncoupling from Russian energy supplies and the rise of Vietnam and Mexico as significant trade partners with the U.S. due to diversification away from China, as evidence of this point.

Nearshoring and Friend-shoring

Following the lead of their home countries, companies are increasingly looking to relocate sourcing and production closer to home ("nearshoring") or to politically aligned countries ("friend-shoring") as a strategy to mitigate risks and align with geopolitical friends. The pandemic and geopolitical conflicts have stress-tested global supply chain resiliency, and multinational companies are now looking to shore up supply chain weaknesses.

Challenges for Europe in a Multipolar World

Europe faces unique challenges in this shifting landscape, including energy dependence and the need for strategic autonomy. European companies may need to focus more on integration and resilience within the European market to maintain competitiveness. As Flint explained, a rising tide of nationalism and polarization could very well threaten a country’s ability to cooperate with regional neighbors, a fact illustrated by Brexit.

Impact of Global Demographics on Economic Growth

Global demographic shifts, including aging populations in developed countries and youthful populations in emerging markets, will significantly influence global economic growth patterns and potentially lead to labor market challenges. This will possibly lead to migratory pressure to the U.S. and China, especially as AI technology concentrates economic growth in those regions, which may well strain industries like housing and healthcare in these countries.

Ultimately, this conversation reinforced the fact that communication plays a crucial role in shaping public perception and policy outcomes, particularly in international economic relations. Businesses need to adapt their communication strategies to address a multipolar world. As the remit of the CCO expands into more strategic responsibilities, understanding these delicate relationships is of critical importance.

Note: This blog was written with the assistance of generative AI.