The professor at the renowned French business school discusses the impact of geopolitics on global businesses in the age of disruption
US president Donald Trump’s war on global trade; growing tensions between Washington and the axis of China, Russia and Iran, and the three countries’ cybersecurity threats across multiple US industries; and the UK’s Brexit legislation—crises are brewing around the world. With factors such as geography, economics and demographics influencing the politics and foreign policy of a country, geopolitics is affecting businesses at an international level.
“In geopolitics, geography and politics go together. You look at factors such as natural resources, locations and national identification with a certain territory. But people often have a restricted view of geography, and only talk about why land is valuable. For countries like Singapore, which has zero natural resources, you have to look at its strategic location,” explains Cédomir Nestorovic, professor of international marketing and geopolitics at ESSEC Business School.
Geopolitics is important to global businesses, so much so that the topic is included in the curriculum of executive education programmes such as ESSEC & Mannheim Executive MBA Asia‑Pacific, and discussed alongside core management topics and the latest business trends.
Nestorovic, who is also the programme director, discusses the impact of geopolitics on global businesses in the age of disruption, and what it takes to be a leader of tomorrow.
How can businesses thrive in the age of disruption?
Cédomir Nestorovic (CN) Disruption, so far, is understood as technology. But you also have disruption in politics and the global economy, which causes havoc. The biggest disruption in international trade is that the path towards further globalisation has been affected by Trump and some other countries are pulling out of international trade agreements. Companies must find ways to protect themselves. Recently, the CEO of Rio Tinto, the world’s largest mining company, proposed a United Nations of companies, and this raises a very interesting precedent.
What is the biggest global risk of 2018?
CN I would say the inconsistency or uncertainty associated with the US. We cannot predict what will be the next step, and it is difficult for companies to propose their short-, medium- and long-term plans based on scenarios. But the Trump administration is consistent on one thing: protecting the American people. How will this be expressed? Will we have sanctions, quotas or tariffs? It also means that the US will pull out of a lot of regional and global agreements.
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