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Dear SCM Managers,
Last week, we explored building resilience in supply chains amidst shifting geopolitical tensions. This week, we’re diving deeper into future trends shaping geopolitics over the next decade. As CEOs and procurement leaders, understanding these trends can be crucial for strategic decision-making and maintaining competitive advantage. Let’s explore what's on the horizon and how you can adapt and thrive.
Here’s how:
In today’s email
This Week’s Topic: Future Trends in Geopolitics: Preparing for the Next Decade
SCM Takeaways
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Recommended reading
C2B Takeaways
This Week's Topic:
Future Trends in Geopolitics: Preparing for the Next Decade
1. Technological Arms Race
The intense competition among global powers to develop and deploy advanced technologies, influencing economic and military dominance.
Case Study & Analysis: The U.S.-China rivalry in semiconductor technology, highlighted by the export controls imposed by the U.S. to restrict China’s access to cutting-edge chip technology (The Wall Street Journal, 2022).
Examples:
Semiconductor Dependency – Taiwan Semiconductor Manufacturing Company (TSMC) plays a crucial role in global supply chains (Financial Times, 2023).
AI Development – Countries are racing to lead in AI, with implications for international competitiveness (Brookings Institution, 2022).
Cybersecurity Concerns – Rising cyber threats have prompted stricter measures worldwide (Cybersecurity & Infrastructure Security Agency, 2024).
2. Shifts in Global Alliances
Changing relationships between nations that reshape economic and political landscapes.
Case Study: The BRICS group's strategic expansion and its implications for global trade (Reuters, 2023).
Examples:
EU-ASEAN Trade Relations – Strengthened partnerships to boost mutual trade (European Commission, 2024).
India’s Alliances – Efforts to enhance partnerships to reduce dependence on single nations (The Economic Times, 2021).
USMCA Impact – The trade agreement's influence on North American trade (Office of the United States Trade Representative, 2023).
3. Economic Power Redistribution
The gradual shift of economic influence from established powers to emerging economies.
Case Study: India’s rapid growth as an economic leader and its impact on global trade (World Bank, 2023).
Examples:
Manufacturing Shifts – Companies moving operations from China to Vietnam (Bloomberg, 2024).
China’s Belt and Road Initiative – Strengthening trade links across continents (Taylor and Francis, 2024).
Economic Sanctions – Effects on global players like Russia and their strategic responses (BBC News, 2024).
4. Climate-Driven Policy Changes
Environmental challenges that push nations to adopt green policies affecting trade and economy.
Case Study: The European Green Deal’s goals and its repercussions for global imports (European Parliament, 2024).
Examples:
Carbon Border Adjustments – Taxes impacting non-compliant exporters (World Economic Forum, 2021).
Sustainability in Logistics – Companies investing in eco-friendly supply chains (DHL, 2022).
Resource Management – The strategic importance of rare earth elements (United Nations Conference on Trade and Development, 2023).
How political and social instability influences trade and supply chains.
Case Study: Free Trade Between Coups and Civil Wars (Konrad Adenauer Stiftung, 2024).
Examples:
Labor Strikes in Europe – Europe’s strikes threaten supply chain delays (Lloyd’s List, 2023).
Investment Challenges in Emerging Markets – Emerging Markets Show Resilience Despite Global Monetary Tightening (International Monetary Fund, 2024).
Inflation and Protests – Economic strain leading to global supply disruptions (The Guardian, 2024).
Sources:
The Wall Street Journal. (2022). U.S. tightens chip exports to China. Retrieved from https://www.wsj.com/tech/u-s-tightens-curbs-on-ai-chip-exports-to-china-widening-rift-with-u-s-businesses-3b9983df
Financial Times. (2023). How Taiwan became the indispensable economy. Retrieved from https://ig.ft.com/taiwan-economy/
Brookings Institution. (2022). Succeeding in the AI competition with China. Retrieved from https://www.brookings.edu/articles/succeeding-in-the-ai-competition-with-china-a-strategy-for-action/
Cybersecurity & Infrastructure Security Agency. (2023). Cybersecurity trends impacting global supply chains. Retrieved from https://www.cisa.gov/topics/information-communications-technology-supply-chain-security
Reuters. (2023). What is BRICS, which countries want to join and why. Retrieved from https://www.reuters.com/world/what-is-brics-who-are-its-members-2023-08-21/
European Commission. (2024). Association of South East Asian Nations (ASEAN). Retrieved from https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/association-south-east-asian-nations-asean_en#:~:text=Trade%20picture&text=The%20EU%20is%20ASEAN's%20third,accounted%20for%20%E2%82%AC400.1%20billion.
The Economic Times. (2021). India’s diversification of global partnerships. Retrieved from https://economictimes.indiatimes.com/news/india/india-has-key-role-to-play-in-contributing-to-diversification-of-global-supply-chain-singapore-deputy-pm/articleshow/85239293.cms?from=mdr
Office of the United States Trade Representative. (2023). USMCA and its economic impact. Retrieved from https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement
World Bank. (2023). India’s economic growth and its impact on global trade. Retrieved from https://www.worldbank.org/en/country/india/overview
Bloomberg. (2024). India’s True Manufacturing Rival Is Vietnam, Not China. Retrieved from https://www.bloomberg.com/opinion/articles/2024-02-07/india-s-true-manufacturing-rival-is-vietnam-not-china?embedded-checkout=true
Taylor and Francis. (2024). The Belt and Road Initiative and its global impact. Retrieved from https://www.tandfonline.com/doi/full/10.1080/17538963.2024.2345532
BBC News. (2024). Economic sanctions and their global effects. Retrieved from https://www.bbc.com/news/topics/cg6d1ekrxxqt
European Parliament. (2024). Green Deal: key to a climate-neutral and sustainable EU. Retrieved from https://www.europarl.europa.eu/topics/en/article/20200618STO81513/green-deal-key-to-a-climate-neutral-and-sustainable-eu
World Economic Forum. (2021). Carbon border taxes and global trade. Retrieved from https://www.weforum.org/stories/2021/10/what-is-a-carbon-border-tax-what-does-it-mean-for-trade/
DHL. (2024). Sustainability in logistics and supply chain practices. Retrieved from https://www.dhl.com/de-en/home/insights-and-innovation/thought-leadership/case-studies/sustainable-supply-chains.html
United Nations Conference on Trade and Development. (2023). Technical note on critical minerals. Retrieved from https://unctad.org/system/files/official-document/ditcmisc2023d1_en_0.pdf
Konrad Adenauer Stiftung. (2024). Trade Without Boundaries? Retrieved from https://www.kas.de/en/web/auslandsinformationen/artikel/detail/-/content/handel-ohne-huerden
Lloyd’s List. (2023). Ports and inland transportation affected by industrial action. Retrieved from https://www.lloydslist.com/LL1144481/Europes-strikes-threaten-supply-chain-delays
International Monetary Fund. (2024). Emerging Markets Show Resilience Despite Global Monetary Tightening. Retrieved from https://www.imf.org/en/Blogs/Articles/2024/07/12/emerging-markets-show-resilience-despite-global-monetary-tightening
The Guardian. (2024). Inflation and economic protests affecting global supply chains. Retrieved from https://www.theguardian.com/business/2024/oct/02/global-supply-chains-are-under-pressure-again-will-inflation-start-rising
SCM Takeaways
Understanding these trends ensures that SCM and procurement professionals can proactively strategize for disruptions, ensuring resilience in sourcing, logistics, and supplier relationships. For instance, learning from Taiwan’s semiconductor lead helps organizations diversify their supply sources.
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Recommended reading
"Prisoners of Geography: Ten Maps That Tell You Everything You Need to Know About Global Politics" by Tim Marshall
This best-selling book provides a compelling analysis of how geography influences global politics. Tim Marshall breaks down complex geopolitical concepts into understandable narratives, making it an essential read for procurement and SCM professionals who need to grasp the broader strategic landscape influencing trade and logistics. The insights help readers understand why nations make the decisions they do and how these choices impact global supply chains.
"The New Silk Roads: The Present and Future of the World" by Peter Frankopan
A follow-up to the acclaimed "The Silk Roads," this book explores how the world is adapting to the shifting global center of power from the West to the East. Frankopan highlights the economic, cultural, and strategic developments along these new trade routes, offering valuable insights into the dynamics that procurement and supply chain managers must anticipate to remain competitive. It’s perfect for those looking to understand the evolving geopolitical landscape and its implications on trade.
"The Technology Trap: Capital, Labor, and Power in the Age of Automation" by Carl Benedikt Frey
This award-winning book examines the relationship between technological progress, economic growth, and labor market shifts. Frey discusses how past technological revolutions have affected economies and societies and draws parallels to today's rapidly advancing tech landscape. Procurement and SCM leaders will find this book insightful as it highlights how automation and technological changes can impact global supply chains and operational strategies.
C2B Takeaways
The global geopolitical shifts that impact businesses also influence personal decisions. Understanding these trends can help individuals make smarter financial, lifestyle, and career choices.
Diversifying Personal Investments - Just as companies are diversifying their supply chains to mitigate geopolitical risks, individuals can adopt similar strategies with their investments. Instead of relying solely on stocks from one region, consider building a portfolio that includes international stocks, ETFs, and commodities. This can help protect against regional economic shocks and currency fluctuations.
Example: For instance, adding investments in emerging markets such as India or Vietnam can provide exposure to fast-growing economies that are benefitting from the shift in global manufacturing.
Sustainability and Eco-Friendly Choices - Geopolitical trends are pushing businesses toward sustainability due to climate-driven policy changes. Adopting eco-friendly habits can align with future regulations and reduce personal expenses. Simple actions like energy-efficient home upgrades, sustainable transportation options, and choosing products from eco-conscious brands can make a difference.
Example: Switching to solar panels or energy-efficient appliances not only reduces your carbon footprint but can also lead to cost savings in the long run, preparing your household for potential future energy regulations and incentives.
Staying Updated on Technology Trends - The technological arms race has a direct impact on the tools and services available to individuals. Staying informed about technology trends such as cybersecurity best practices, AI, and digital finance helps you make better choices, from protecting personal data to taking advantage of new tech opportunities.
Example: Using two-factor authentication for your online accounts or investing time in learning new tech skills can improve your digital literacy and keep you secure and competitive in the job market.
We Learned Today
Key takeaways:
The future geopolitical landscape will be driven by technology and alliances.
Climate and social changes will heavily influence SCM and procurement.
Adaptability will be key to thriving in the next decade.
Thank you for reading this week's edition of ProcWee! We look forward to sharing more insights with you next week. Have a great week ahead!
PS: What’s the #1 thing that made you want to check out this newsletter? Reply and let us know. We read every reply.
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