Geopolitical Volatility on the Rise: Implications for Businesses and Investors

Geopolitical tensions are on the rise, with a new era of uncertainty and opportunity for businesses and investors. According to the latest data from EIU, the increase in inter-state tensions has been most pronounced in Europe, but all regions have been affected. This shift in global power dynamics is expected to weaken US primacy and lead to a more competitive, fragmented world.

The implications of this new geopolitical era are significant for companies and investors. Higher inflation and interest rates, changed fiscal priorities, and intense state-led technology competition are just some of the challenges that businesses will face in the coming years.

The impact of these geopolitical pressures is being felt across the world. Europe, once considered a zone of peace, has seen a significant decrease in stability due to Russia’s actions in Crimea and Ukraine. The rivalry between China and the US has also intensified, leading to higher exposure to international disputes in both countries.

Finding safe havens in this era of geopolitical contestation will be challenging, but not impossible. Countries like Indonesia, New Zealand, and Singapore in Asia, and Ireland, Norway, and the UK in Europe have been able to distance themselves from the global tensions and attract investment through adroit international diplomacy.

Changes in the global distribution of power have been driving these tensions, with the US no longer holding absolute primacy and rising powers like China seeking greater influence. This shift will have economic consequences, including higher inflation, changes in fiscal priorities, and a focus on technological innovation.

Overall, businesses and investors should expect more geopolitical volatility in the future. Understanding the implications of this new era of geopolitics will be crucial for navigating the risks and opportunities that come with it.