Why leaders must understand the geopolitical context of their key markets

Inform your discussions and decisions this week.?The decisions leaders make today will determine how their organisations will fare in the coming years. They face many intersecting risks and challenges. Geopolitical shifts, the effects of climate change and the diffusion of artificial intelligence are the key ones.

Our recently launched New Globalisation Transition Index shows that the combination of these three drivers are now fundamental to the global economy. As part of our Trade in Transition research programme, supported by DP World, we examined whether these drivers differed from those of past decades. Our evidence suggests they do. We referred to globalisation’s previous chapter using the term “Washington Consensus”, associated with efficiency, liberalisation and deregulation themes. By using natural language processing on the EIU’s global reports over the past three decades, looking for specific terms, we found that the forces of what we call new globalisation began shaping the global economy in the latter half of the 2010s. After the covid-19 pandemic disrupted the world economy, these drivers are accelerating.

As President Trump upends the global order, geopolitics is now top of mind for every leader and boardroom. Leaders need to try and understand the geopolitical context of their key markets—are they West-leaning, East-leaning or in the middle? Are these geopolitical groupings stable, and could any kind of neutrality in fact become well-nigh impossible to achieve in globalisation’s new chapter? Our New Globalisation Transition Index suggests that the leadership challenges of this period are set only to intensify.

Also in this issue, watch Dario Amodei , chief executive of Anthropic, explain his predictions on AI and what it may mean for business and society to The Economist’s editor-in-chief, Zanny Minton Beddoes , in an event programmed by Economist Impact and sponsored by Zurich Insurance, on the sidelines of the recent World Economic Forum in Davos. Also, explore some of the strategies being utilised to help urban areas prepare for climate-related risks. Plus, as the insurance sector grapples with more frequent extreme weather events, technological advancements and higher inflation (which has pushed the cost of claims higher) – what should industry leaders do to address the growing global protection gap?

Learn how companies are shifting their supply chains in response to geopolitics in our Trade in Transition programme.

How can executives create successful businesses in today’s volatile world? The ultimate aim for a successful business is to deliver high profitability in a resilient fashion, without negatively impacting communities and the planet. Adopting a “net positive” approach fits with this goal.

Join us in New York on June 11th - 12th 2025 to explore how businesses become sustainable faster. Discover new features, including the Energy Transition Summit, one-to-one meetings and our Energy Leaders Club.