20/04/2025

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What this means for businesses For companies navigating this new reality, adaptability is key. The assumption that “global is always better” no longer holds. Instead, businesses must strike a balance between international expansion and local resilience. It is no longer about being everywhere but in the right places. The companies that will thrive in this new era are not the ones blindly following the old globalisation playbook. They are the ones rethinking their strategies, investing in agility and recognising that globalisation is not a tide that has receded but, rather, one that is shifting its currents. Successful businesses will need to deepen their understanding of local mar kets, cultures, and consumer expectations. This involves not only adapting products and services but also aligning values with community priorities. Building trusted lo cal partnerships, maintaining operational flexibility, and continuously innovating will become essential practices for staying competitive and relevant. Moreover, proactive risk management and scenario planning will be critical to swiftly respond to geopolitical shifts, regu latory changes, and unforeseen disrup tions, further enhancing organisational resilience. The question is no longer if globalisa tion will continue but how businesses will navigate its new form. Those who can adapt to this evolving landscape – em bracing digital connectivity, diversifying supply chains and prioritising sustain ability – will be advantaged in this new global order.

Globalisation isn’t dead; it’s just changing THE idea that globalisation is collapsing is an oversimplification. The world is still profoundly interconnected, but the way businesses engage with it is shifting.

The assumption that ‘global is always better’ no longer holds. Instead, businesses must strike a balance between international expansion and local resilience.”

Supply chain diversification: Companies are spreading their operations across mul tiple regions instead of relying on a single country for production. The “China plus one” strategy – where businesses main tain operations in China but also establish factories in other countries is becoming the norm. This shift helps mitigate risks associated with geopolitical tensions, trade restrictions and unexpected disruptions like pandemics or natural disasters.

The great retrenchment The past decade has seen a series of events that have forced a re-evaluation of globalisation’s trajectory. • Trade wars and nationalism: Countries that once championed free trade, such as the United States and the United Kingdom, have pivoted towards economic self-reliance. Tariffs, sanctions and protectionist policies have become tools to safeguard do mestic industries. “Made at home” has become a political slogan rather than an economic afterthought. Gov ernments across Europe and Asia have similarly begun prioritising local industries, sometimes at the expense of global trade. • Supply chain shocks: The Covid-19 pandemic exposed the vulnerabilities of global supply chains. When factories in China shut down, companies world wide faced shortages of essential goods, from electronics to pharmaceuticals. The crisis made one thing clear: depen dency on a single country or region was a risk many businesses could no longer afford. • The rise of regionalism: Instead of a singular, global marketplace, we are seeing the emergence of strong regional hubs. Southeast Asia, Eastern Europe and Latin America are all positioning themselves as viable alternatives to the traditional powerhouses of global trade. Businesses are increasingly looking to regional partners to avoid geopolitical uncertainties and logistical disruptions. • The rise of regulation: To contend with the ambiguous nature of busi ness practices while protecting local industry players, many nations began to impose “soft barriers” to trade. Some of such barriers translated into regulatory and compliance impositions that further stifled competition while protecting latent “local production”. Competition gave way in some man ner to localisation, thereby reducing emphasis on excellence. While these shifts may seem like a retreat from globalisation, they are an adaptation to a more complex and frag mented world economy. The intercon nectivity remains – it just looks different.

Digital globalisation: While the movement of physical goods may be slowing, the movement of information is accelerating. Remote work, digital services and cloud computing have allowed businesses to expand globally without the need for a physical presence. A startup in Malaysia can now serve clients in Europe without ever opening an office there. Global e-commerce, virtual collaboration and cross-border fintech solutions are redefining what it means to operate on a global scale.

Sustainable and ethical sourcing: Consumers are demanding more accountability from brands. The days of chasing the cheapest labour, regardless of working conditions, are being replaced by a focus on ethical sourcing and sustainability. Companies are under increasing pressure to ensure fair wages, improve the living conditions of workers, reduce carbon footprints and engage in responsible production practices. Businesses that fail to adapt to these expectations risk losing consumer trust and long-term viability. Imposing global responsibilities through standards like UN Global Compact, TCFD regulations, CCS guidelines, etc, is crucial for businesses to comply with.

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Reshoring and nearshoring: In response to supply chain vulnerabilities, some businesses are bringing manufacturing and services closer to home. This trend is gaining traction, known as reshoring (returning production to the home country) and nearshoring (relocating to a nearby country). While this does not mean the end of globalisation, it signals a shift towards a more balanced, risk managed approach to global operations.

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Bobby Varanasi is a respected global thought leader in globalisation, economic sustainability, and business transformation. Recently, he won the Innovation Leadership Award at the World Innovation Congress 2025.