Navigating a Fractured World: Why International Business Strategy Must Now Be Geopolitically Fluent
The End of Globalisation as We Knew It
The old model, in which supply chains ran through China, capital pursued growth in emerging markets, and multinationals operated beyond the reach of politics, is unravelling. What we are witnessing is not the end of globalisation, but its reconfiguration. This is geoeconomic fragmentation.
While some economists argue that globalization will prove resilient and that market forces will ultimately overcome political barriers, the evidence suggests otherwise. The interconnected world of 2019 is not returning.
Supply Chains as Instruments of Foreign Policy
Decisions about where to manufacture, source, or ship are no longer purely commercial. They are increasingly political. The China+1 strategy is real, and companies are acting on it with remarkable speed.
Take Apple's approach: the tech giant has systematically shifted iPhone production from China to India, with Foxconn now manufacturing significant volumes in Tamil Nadu. Similarly, automotive suppliers like Bosch have relocated semiconductor assembly operations to Mexico and Vietnam, reducing concentration risk while maintaining cost competitiveness. These moves required 18-24 months of planning, significant capital investment, and careful navigation of local labor laws and trade agreements.
As our group assesses infrastructure and industrial investments, we now consider resilience, redundancy, and regulatory compatibility as essential alongside cost and scale. The cheapest option is no longer the smartest if it creates unacceptable sovereign risk.
Governments Are Now Stakeholders
You are no longer just managing global markets. You are managing government ministries.
Sovereign wealth funds, industrial policy frameworks, and capital controls have made governments active stakeholders in business strategy. It is no longer simply about managing margins, but about managing relationships with regulators, economic authorities, and sovereign partners.
In practical terms, this means developing new capabilities. Business leaders must now understand diplomatic protocol, regulatory approval timelines that span multiple jurisdictions, and the art of relationship-building with trade attachés and economic development agencies. In our own experience across the Gulf, Europe, and North America, success has often depended as much on trusted diplomatic alignment as on the strength of the underlying business case.
This requires hiring differently. We now employ former trade officials and diplomatic personnel alongside traditional business development teams. They understand how to navigate ministry hierarchies, when to engage through formal versus informal channels, and how to structure partnerships that align with national industrial strategies.
The Green Divide
Climate regulation is fast becoming the new trade barrier. From the European Union's Carbon Border Adjustment Mechanism (CBAM) to the United States' Inflation Reduction Act, compliance with environmental standards now shapes access to markets and capital.
The cement industry provides a telling example. HeidelbergCement has invested over €2 billion in carbon capture technology specifically to meet CBAM requirements, understanding that without this investment, their European market access would be severely limited. If your operations cannot withstand a carbon audit, your product may not even clear customs. Sustainability is no longer a branding choice. It is a strategic imperative.
Digital Fragmentation and AI Nationalism
AI regulation, data sovereignty laws, and cybersecurity regimes are creating a fragmented digital landscape that demands immediate attention from business leaders.
Companies now face a maze of conflicting requirements. China's Cybersecurity Law requires data localization. Europe's AI Act creates liability frameworks for algorithmic decision-making. The United States maintains export controls on advanced semiconductors. India's Digital Personal Data Protection Act imposes consent requirements that differ from GDPR.
Microsoft exemplifies how large corporations are responding: they maintain separate data centers in different jurisdictions, employ region-specific AI models that comply with local regulations, and have built compliance teams that specialize in navigating these fragmented requirements. They essentially operate parallel technology stacks across major markets.
Firms may need to maintain similar parallel systems or work through trusted digital intermediaries able to navigate conflicting standards. The race for talent, infrastructure, and credibility in this new AI era will define the next generation of global winners.
A New Mandate for Business Leaders
The emerging rules of international business require a profound shift in mindset and practical capabilities:
Think like a diplomat and act like a long-term investor.
You must grasp national interests, not just market dynamics. This means regularly engaging with embassy commercial sections, attending bilateral trade council meetings, and understanding how your industry fits within each country's strategic priorities.
Assess cross-border risk with a wider lens.
Your greatest vulnerabilities may be regulatory, reputational, or political. Develop new metrics: track regulatory approval timelines, monitor bilateral trade tensions, and assess the political stability of your key partnerships. Create scenario planning that includes sanctions, trade disputes, and sudden regulatory changes.
Form alliances rather than simple partnerships.
The identity of your strategic counterparts will increasingly determine your viability. Partner due diligence now includes geopolitical alignment assessments and sovereign risk evaluations.
Prioritise optionality.
Resilience is the new measure of return. Maintain multiple suppliers, alternative market entry strategies, and flexible organizational structures that can adapt quickly to political changes.
The Geopolitical Fluency Checklist
When evaluating international opportunities, executives should now ask:
How does this investment align with both countries' national security priorities?
What regulatory changes could emerge in the next 24 months that would impact operations?
Do we have relationships with the relevant government stakeholders beyond just commercial counterparts?
Can our technology and data practices withstand scrutiny from multiple regulatory regimes?
What would happen to this business if diplomatic relations deteriorated?
Adapting for Mid-Market Companies
Not every company has the resources for extensive geopolitical analysis teams. Mid-market firms can still adapt these principles by focusing on critical priorities: engaging with industry associations that monitor regulatory changes, partnering with law firms that specialize in cross-border compliance, and building relationships with export credit agencies and trade promotion organizations that provide risk assessment resources.
The key is recognizing that geopolitical fluency is no longer optional, regardless of company size. The tools and resources exist; the question is whether leadership will prioritize developing this capability.
Conclusion
We cannot navigate today's world with yesterday's map. As business leaders, our role is no longer merely to respond. It is to foresee. The decade ahead will reward those who understand that international business is no longer apolitical. It is personal. It is national. It is now unavoidably geopolitical.
The companies that thrive will be those that embrace this reality, invest in the necessary capabilities, and view geopolitical complexity not as an obstacle but as a competitive moat that separates serious international players from those still operating with outdated assumptions.