Small Talk

Essec Business School professor Cédomir Nestorovic on the impact of geopolitics on global businesses

Essec Business School professor Cédomir Nestorovic on geopolitics and global business 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?

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?

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.

What is the impact on Singapore?

Trump does not pose a problem for Singapore. You have the US on one side and China on the other. Singapore is able to speak freely to both. Singapore takes a neutral stance on politics and business, and this makes the country a valuable base for foreign companies. Neutral could be perceived as isolationist, but Singapore is highly engaged on the international stage. A better term than neutral might be “equidistant”—meaning both powers are treated the same way. Singapore is fully aware of what is happening in Asia and the Asia-pacific, but it will not interfere in what other countries do, and will not accept other countries telling it what to do— this is equidistance. Singapore may have an opinion, but it will never criticise what is happening in other countries.

What is one quality a leader of tomorrow must have?

Leaders must have a vision, but in the current climate of disruption this is very difficult to establish. It is not a vision just for the leader but for their organisation as well. How a leader identifies their vision and how they endeavour to secure consensus and ownership of that vision across the organisation is perhaps the most difficult thing.

Who do you think is a leader with vision?

I would say some of the more controversial ones, like Elon Musk. He has a vision, and it is very clear: he wants to push the boundaries and he wants to explore. It can be electric cars, it can be going to Mars. He is exploring, pushing the boundaries, and in doing so, opening new frontiers of business and human development.