The changing face—and force—of globalization

“All of a sudden, geopolitics is intruding [into the business world] in a very, very substantial way that it did not … 10 years ago.” That’s how David H. Petraeus, retired US general and former CIA director, framed one of the many pressing challenges that boards and C-suites now face.

Petraeus, now a partner at US-based global investment firm KKR, kicked off a recent Deloitte Global Boardroom Program webinar on critical issues that boards are grappling with, including resilience, climate change, populism, leading in a post-truth world, and the changing face—and force—of globalization. He was joined in the discussion by David Miliband, president and CEO of the International Rescue Committee, and a former foreign secretary of the United Kingdom; and by moderator Rana Foroohar, a global business columnist at the Financial Times and global economic analyst for CNN.

“Global risks are crashing into the front room and the boardroom of every company around the world,” Miliband said. “You’ve got a globalization of risk but a nationalization of resilience. … You’ve got a geopolitical order and a globalization order that are, themselves, unstable.”

In this new era of great power rivalries, geopolitics and its attendant risks have become the independent variable determining economic outcomes. Resilience is further complicated by the evaporation of the three key drivers of smooth or “benign” globalization we have enjoyed for four decades: cheap capital, labor, and energy.

Petraeus summed up the impact of this shift: “What we've got to do is identify those [risks], mitigate them, and ensure that these can still be successful in this very transformed world. Globalized trade … will continue to grow, but it’s going to grow much more slowly. We’re talking 1% a year, instead of the pretty substantial growth that we were seeing back in that era of benign globalization.”

The views expressed herein are those of the panelists and not necessarily the views of Deloitte.

The Deloitte Global Boardroom Program hosts a series of webinar discussions with eminent panelists to help global companies’ boards and management teams stay current and challenge perceived wisdom. The recording of this session is available to members of the Global Boardroom Program until December 20, 2022. If you’re a board member or a C-suite executive who would like to join future webinars—become a member of Deloitte’s Global Boardroom Program by contacting globalboardroomprogram@deloitte.com.