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How EY can help
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Our Geostrategic Business Group (GBG) can help your business translate geopolitical insights into business strategy to manage political risk. Find out how.
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Although recent momentum had been toward Cold War II, near- and medium-term events could shift the trajectory toward another scenario. A deterioration in alliances could lead to a turn toward Self-reliance reigns. And a proliferation of regional trade agreements could precipitate a turn toward Friends first. More dramatic shocks – such as a quick end to the war in Ukraine and a strong global economic rebound – could even reverse the recent momentum and push the world back toward Globalization lite.
Of course, the future of globalization could fall somewhere between these scenarios. Or globalization could develop in more extreme ways over the next five years. For example, it could be derailed by the world veering toward a large-scale military conflict between great powers (i.e., a “hot war”). There are a variety of current tensions that make such scenarios possible. But we do not assess them to be as likely as the more moderate scenarios detailed here.
Examining our set of four scenarios can help CEOs structure the uncertainty they face, allowing them to analyze and prepare for potential consequences in a more strategic way. To help CEOs and boards assess how they may need to revise their company strategy to adapt to whichever future global operating environment arises, we explore each scenario in more detail below. The scenarios are set out in order, from (broadly) the most to the least restrictive policy environment for international business.