top of page


Updated: Oct 16, 2023

Last week, I discussed the fundamental trends (as opposed to events) that would require businesses and individuals to plan for over the next year or two. This is a brief summary.

Global dynamics are either ‘trends’ or ‘noise’. The first are long-term directional developments for which you need to respond strategically; the latter, shorter-term oscillations requiring a tactical response.

It is key to distinguish the two. For example, you might feel that a country or geopolitical relationship is improving whereas what you’re actually observing is a short-term positive oscillation on a longer-term downward trend. You can take advantage of this tactically (e.g. from an investment perspective) but if you’re investing in long-term returns, it’s probably not a good bet.

So, here’s my assessment of what’s happening today.


1. China’s trajectory: Despite common Western rhetoric, China’s decline is more likely and probably more consequential than its rise. On the upside, China has a huge market, it has an authoritarian’s ability to direct investment to long-term objectives (e.g. infrastructure) and it is politically stable (at least until it isn’t). However, on the downside risk, its population is aging fast and shrinking, it has some underlying structural economic challenges, not least of which is that a state-led economy isn’t as good a decision maker as an open market. President Xi’s coalescing of power means there is no political release valve (at national and local levels). Its international friends are weak, it leads through fear, and has simmering tensions on its borders. Thus, while its trajectory remains uncertain, China’s downside potential is greater than its upside.

2. US-China relations: The US-China relationship is trending downwards for the next period even as political oscillations might look otherwise. Among the US political cognoscenti on both sides of the aisle there is real fear that China might surpass the US in strategic areas (most notably technology) and thus containment is key. On the Chinese side, Xi has explicitly dismissed Deng Xiaoping’s policy of hiding strengths and biding time. China wants to stand up and lead, particularly in its region. They also need growth (see above). And so, until the current zero-sum thinking is overcome, you have a negative trend as the two great geopolitical behemoths jockey for space.

Source: Equinor

1. Energy and the environment: Security, sustainability and affordability is the energy trifecta. Where you are positioned in this Venn diagram at any time depends on where you are located, the moment you are in, and your income or wealth. The inexorable replacement of hydrocarbons by renewables will not be a smooth transition. There will be faults and mismatches. Different locales will manage at different speeds. Availability and price will oscillate. But, geopolitically the implications are clear. Renewables such as wind and solar have a bigger global footprint than hydrocarbons and thus can be directly accessed by more nations providing greater energy security. Prices have also declined which makes them, in many cases, more affordable than increasingly hard to reach (and thus expensive) oil and gas. Power, long held by the hydrocarbon-rich Middle East (and Russia) will be spread over new and wider geographies – those that have access to, and the processing capabilities for, the new minerals needed for new technologies. While China currently holds many of these key assets today, others are investing. Meanwhile, the consequences of global climate change will worsen, impacting societies and countries unequally.

2. Rising societal expectations: Over the past two decades, attention on the E (environment) of ESG has been rising. Focus on the S (social) has lagged but early signs are beginning to appear (e.g. Black Lives Matter and the #MeToo movement), particularly in the US and parts of Europe (including the subsequent backlash). As with the environment, a limiting challenge faced by those with social expectations is how to measure progress – if you can’t measure it, you can’t manage it. This will change. In the absence of effective governments’ action, the public is looking to corporates to step up. As the Edelman Trust Barometer indicates, corporates remain the most trusted type of organisation (over government, the media and NGOs). Today, therefore, all corporate (or other entities) need to be aware of, and ready to respond to, the changing social context. While this is very location-dependent (if you have insufficient food, social concerns are less important to you), and there may be oscillations, this is certainly a rising trend.

3. Technological change: Technology has the potential to transform our lives in a multitude of ways, of which many haven’t even been conceived yet. Some of the key arenas today and in the coming years are in data and information access, how we travel (and thus where we live), health care, and communication. In some areas the impact will be direct: self-driving cars and communications advances might lead to a slow down or even reversal of urbanisation (which I have written about before). Technology can also boost other trends, such as the decline in US-China relations. It is, if you will, in the air we breathe and thus its effect can be in almost any arena (just as the industrial revolution was in its time). However, technological change can, and will, have both positive and negative implications. And this can create volatility. Communications technology diffuses power to a much wider audience, but also enhances division and enables disinformation. Data dissemination provides equality of access but also raises privacy concerns. Technology is a super-charger of both trends and noise.

4. Demographics: In brief, Europe is shrinking and aging. So too, China. Africa and the Middle East is growing and still young. India is about to surpass China as the most populous country in the world and still has a demographic dividend to which it can look forward. These major demographic trends (dynamics in population numbers, dependency ratios etc.) will have ripple effects causing changes in market interest, economics, health provision, resource use and more. All this will have implications on geopolitical power.

Source: UN University

1. Inequality (and democracy): Inequality between countries has been declining for decades, even as it slowly rises within countries. Relatedly perhaps, division and partisanship are also growing in many parts of the world (transparent in the voting patterns of US Congress over the past five decades, Pew Research Center). The social contract many western populations signed up to many decades ago no longer adds up. Until a new model is built, inequality in these countries is unlikely to be adequately addressed and thus its slow upward trend will continue. Meanwhile, while many might believe that democracy too is on a downward trajectory, it is more accurately characterised by an oscillation, which has been negative since 2016 but last year plateaued (see Economist Intelligence: EIU democracy index).

What’s not here – and thus an event or noise?

Most obviously absent from the trends above is the Russia/Ukraine war. If you live or work in the region or have any association with it, whether business or personal, it is hugely consequential – in many cases far more so than many of the trends named above. However, with one clear and two possible (if not probable) exceptions, its geopolitical consequence is unlikely to be significant. The clear case is the impact it has had in hastening the energy transition discussed earlier. The first possible one is over whether the invasion will meaningfully change the way states consider, and respond to, other territorial grabs; given how few states outside the west have been willing to take a position thus far, this seems unlikely. Finally, is about whether a Russian use of nuclear weapons would change norms towards their use in the future. Were it to happen, the breaking of an almost 80 year prohibition does seem likely to do so. On a separate note, while food flows have been disrupted, the recalibration to return to the status quo is already taking place. Thus, while the war is a terrible event that has horrific consequences for many millions, it is unlikely to change trend lines.

Other key events about which an observer of geopolitics should be aware of, and able to respond to, include the continued rise in health crises to humans and animals (the rise does follow a trend but one likely less consequential than those listed above, while the events are spiky). So too, climate events as noted earlier, which can cause severe oscillations in specific locales as well as more broadly.

Two additional hotspots to watch are Taiwan and Iran. While changes in either might be contained, they could also have broader repercussions on some of the trends noted above.


There are two key conclusions from the analysis above. The first is that the world is highly complex and, given the diffusion of power, getting more so. The second is that how these trends and events impact an individual or entity is highly dependent on location. A mitigating or managing action for one situation could be very different from that for another. There is, unfortunately, no one-size-fits-all response, and given the constant dynamics, you can’t ever consider the job done.

Of course, it is possible I am biased – this keeps my services in demand from organisations looking to understand the implications for their operations. It also happens to be true.


Recent Posts

See All


Avaliado com 0 de 5 estrelas.
Ainda sem avaliações

Adicione uma avaliação
bottom of page