Navigating the New Nationalist Landscape: Strategies for Supply Chains – Part Two

In last week’s British elections, Labour won 34% of the vote, the Tories 24%, and Reform 14.3%. Combining the right-wing Tory vote and the right Reform vote, the British right would seem to have trounced the British left with a combined total of 38.3%. Yet Labour has emerged 411 seats, the Tories 121, and Reform, with millions of votes, 5. Labour is now in charge.

So with the French: in a historic showing, Le Pen’s Rassemblement?National won the first round of elections and became the largest party in France. In the second election, the combined alliance of all the other parties kicked them to third place, isolating themselves yet again from executive power. Macron, perhaps the least popular politician in France, will continue in the Presidency till at least 2027, just as Ursula von Leyen, receiving no popular votes at all, is expected to remain as head of the EU till 2029.

Given these results, one may be forgiven for a certain cynicism about European democracy. Clearly, the popular will is one thing, its electoral representation another. But that’s a shallow way of looking at it. In fact, what we are seeing is a very conservative phenomenon: the persistence of institutions and figures in power and their resistance to change. If not quite democracy, it is at least a sort of stability, and business always functions better under stable situations than under chaotic ones.

But does that mean that change will never come? Hardly. The nationalist parties have not won enough to overturn the existing globalist order, but they have never come as close and come closer every year. Their time has not yet come, but extrapolating from current trends, it will. Businesses still have a breathing space: They can expect the present situation to persist for a while yet. But they need to think ahead and prepare.

So what can businesses expect as they navigate the New Nationalism? What are the challenges, and what, if any, are the potential upsides?

Market Diversity

A single common currency, a single set of regulations, universal standardization, open shared borders—these things all work together to make supply chains easier to plan and map. Supply chains become more fluid and predictable. Such economic advantages were some of the original selling points of the EU, and many feel the resulting homogenous has been a net positive.

But market diversity has its advantages, too. Just as some suppliers underbid others so that some nations will offer businesses better terms than others. Nations will once again compete for business patronage; where competition exists, there is a competitive advantage. That competition will not only come at the national level of tariffs and border controls. As nations individualize, they may well deregulate or make other changes that allow their businesses and industries more leeway to attract partners and investors. American businesses often move to Mexico because Mexico offers more favorable conditions. A new European nationalism may do the same.

A Reduction in Bureaucratic Coercion

At present, European business conditions are heavily shaped by the above. When the EU leadership decides in favor of sanctions against Russia, sanctions are imposed. If the EU deems Green policies necessary, regulations making them so are put in place. These dictates from above may yet push Germany and other European nations into a thermonuclear war or complete industrial collapse.

It is not my intention to argue the pluses or minuses of these issues. I am not speaking politically; I am only pointing out that such decisions are not driven by popular vote or market demands. They are imposed from above almost arbitrarily, and businesses have to adjust as best they can. Should the result be a complete social collapse or a global thermonuclear war, adjustment may prove difficult.

Of course, a revived nationalism will have its own internal bureaucratic foolishness, but that foolishness will be more limited in scope, more responsive to its popular base, and more likely to have exceptions and variations in neighboring nations. Businesses will have to maneuver in a far more complex environment, and for supply chain analysts, it will be like riding the rapids.

But it will be an environment with more options and more freedom. A return to a Europe of nation-states will likely lead to a haphazard patchwork of fewer sanctions, regulations, resources from the East, and a more peaceful business environment overall. The European economy as a whole could find itself reborn, and that is a good thing. A thermonuclear apocalypse does not enhance profitability.

Resilience and Redundancy

As Europe returns to older models of national sovereignty, companies will need to invest more in supply chain professionals sensitive to local conditions and social and cultural nuance, just as they will need to invest more in building resilient and redundant supply chains. Just-in-case will matter just as much as just-in-time. Reductions in cheap foreign labor may need to be balanced by larger investments in robotics. Remote work will continue to trend: there are no border controls on the internet. I would not be surprised to see factory production moved not only to other countries but to sea and ocean-based production facilities. Sourcing and distribution will not cease to be global, but they will tend more and more to the regional. ?

Technological Advance

We should remember, too, that seeing a Europe “returning to older models of national sovereignty” does not mean stepping back into older and outdated supply chain practices. On the contrary, we are stepping backward and forward at the same time. The ways supply chains drive value have never been more powerful or developed. Advanced technologies from AI to Big Data to blockchain to quantum cryptography to 3D printing will provide supply chain transparency, better predictive analytics, real-time monitoring, and distribution options as never before. The progress made will not be forgotten, and the progress to come will not stop. Supply chain effectiveness will only advance, but in more local and regional contexts than before, and with a greater need for seasoned analysts in the new technologies and approaches to assist in those adaptations.

To sum up: what we are facing is not a revolution (much less a fascist revolution) but instead changes in locale and oversight. Social changes. In my novel Chaotic Butterfly, I tried to give a picture of some of the impact that social change has on the supply chain, and to bring attention to the human factor in the productive process. Never has that been on more importance than now.

There is a tendency in supply chain thinking to focus on abstract production variables and ignore the massive weight of social elements—of the human factor. We can no longer afford to do so. The recent elections serve to remind us that markets are peoples, peoples with their own unique cultures, mores, and cohesion, marked by the paradox of a collective individuality.

It reminds us yet again to look at the world and the narratives in which supply chains operate. A nationalist future requires us to be far more sensitive to the cultural nuances of the nations we operate in and learn to work not abstractly from above but intimately from within. Only by looking at their narratives and their self-understanding can we understand the worlds in which their supply chains operate, and only in that way can we bring them to optimal efficiency.

Much like the branches of a magnificent oak stem from the same trunk and remain rooted in the same earth, European nationalism is not so much tearing Europe apart as allowing it to take new individual paths and evolve into new expressions. The path forward for those in the supply chain is not to stand before these inevitable natural processes and shout, “Stop!” but to follow those developments and adjust to them so as to foster their best growth.

One size does not fit all. But this is why tailors will always be needed and why they will always make a profit.

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