10 - Looking Ahead

Summary

With the rise of strategic rivalry and geopolitical competition, governments turned to economic policy to gain influence, power, and resources. The defining feature became the pursuit of national interest, which was invoked to introduce investment screening policies, increase tariffs, prevent cross-border M&A deals, expropriate assets, restrict technology transfer, provide preferential subsidies, and create national champions. To respond effectively, global companies must recognize the systemic changes underway and develop capabilities to address them. Companies need to acknowledge that they will come to be defined by their nationality and innovation is an important battlefield. Government policies to contain the influence of foreign firms from adversarial countries cluster around four levers: market access, level playing field, investment security, and institutional alignment. To actively manage geopolitical tensions, companies need to assess how geopolitics will share their resources, competitive advantage, and firm organization. They need to develop skills to scan the global landscape, personalize the information, plan the response, and pivot if there are headwinds. Impact on employees, who works, how work is performed, and where it takes place need to be evaluated. Managing policymakers becomes a crucial part of managing a global business.