“Nearly 60% of global CEOs expect that the world will move more towards deglobalization by 2026,” according to an international CEO and investment survey issued recently. These trends point to growing anxieties among CEOs over globally increasing tensions in geopolitics, trade breaks or divergence, supply chain shifts, or growing government interventions in global trade. Though deglobalization is hardly likely to be reversed globally, CEOs now clearly foresee a more regional or divided economic world.
The survey shows that there is a reevaluation of many traditional views concerning free trade and worldwide integration among executives in every industry today. The increasing presence of geopolitical rivalries among the world’s major trading blocs has triggered an acceleration of the trend towards “friend-shoring” and “near-shoring.” Resiliency has become a major goal of worldwide operations for many executives in place of efficiency and cost savings.
“Business leaders have pinpointed the aftermath of pandemics and wars, trade restrictions and sanctions within the last few years as significant factors that influenced the trend towards deglobalisation,” according to Pankaj Ghemawat, chief executive of the Building Effective Governments initiative at INSEAD.
“Executives are realizing that deglobalisation is not merely about ideology but about risk management,” said Martin Linder, the German business journalist who wrote ‘The Jungle of Forgetting’, adding that the deglobalisation trend is already visible through the “rise of local sourcing and the rethinking of global supply chains”.
Contrary to the outlook of deglobalization, the survey reveals that globalization will not fade away but instead change to become a multi-speed phenomenon in which trade, investment, and technology movements will depend on political affiliations and compatibility practices. CEOs believe that the complexities involved in global trade will increase with respect to compliance and tariffs.
Notably, despite the belief in deglobalization, most CEOs show optimism with respect to growth in certain countries. The US, China, and India remain among the most preferred investment options due to the immense potential and influence that each exerts in the market. CEOs seem to have a two-track approach—dealing with a fragmented world and pursuing high growth geographies.
Technology is also having a major say in the way CEOs think. Technological developments in automation, artificial intelligence, and infrastructure are making offshore production less dependent on ultra-low costs. The higher capital and technology-intensity of production will make access to markets, talent, and innovation clusters more important, and CEOs think that will contribute to regionalization, rather than full global integration.
A major contributing factor behind the expectation of deglobalization is government policy. CEOs are seeing greater government intervention in key areas such as energy, semiconductors, defense, and data. Industry policies, subsidies, and security concerns are entering into company investment decisions in a manner unprecedented in the past. Although this is a welcome trend for some CEOs, others are concerned about this factor.
The survey also points out a shift in thinking from leaders in this sector. CEOs are now transitioning from their cost-effective and globally oriented views to ideals that include efficiency, sustainability, and reputation as a major criterion for their business.
Environmental and social factors are being merged as criteria for supply chains due to government, investment, and consumer pressure that calls for responsible and green supply chains by companies.
不足
But the threat of Deglobalisation does not come without any challenges. CEOs accept that fragmentation may cause an increase in costs, a reduction in economies of scale, and lower global growth. Smaller and developing nations face challenges in integrating into a trade bloc. This may increase economic disparities. Multinational enterprises must deal with the complexities involved in having strategies for the regions. Investor sentiment, as indicated in the survey, is generally in line with what CEOs expect.
Even if investors are being quite cautious about geopolitical risks, most of them believe that investment opportunities lie with those companies which are able to thrive in the new world order. Thus, the implication that nearly 60% of the world’s CEOs predict the acceleration of deglobalisation in 2026 indicates that there is a paradigm shift in how the world’s CEOs perceive the global economy. Rather than heralding the end of the age of globalization, this trend indicates the dawn of an age where the world will witness a more regionalized resilient and politically driven global economic system. The future challenge facing the CEOs will thus entail juggling global vision with localised delivery.
