Small Talk

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

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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.

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