Priorities of the global economy and threats ahead
Given the current geopolitical and geoeconomic challenges, restructuring productivity and business dynamics is vital for leading global economies
In examining the primary priorities for global economic actors and stakeholders over the next five years, five key themes emerge, as outlined in reports from international economic organizations and premier global think tanks: efficiency and business dynamics, green transformation, twin transformation (artificial intelligence and digital transformation), global supply chains and newgeneration industrial policies. Considering the geopolitical and geoeconomic challenges that the global economic system is going through, restructuring productivity and business dynamics is critical for the world’s leading economies.
Two black swans, namely the COVID-19 pandemic and the ongoing Russia-Ukraine war, require meticulous work in terms of management of production and input costs for the leading economies. The most critical pillar of cost management is increasing the efficiency of inputs. Sectors and countries that restructure their efficiency in raw materials, labor, energy and financing will succeed in distinguishing themselves in global competition. Adding a transformation focused on net-zero carbon and zero waste is among the priorities of the global agenda. The advantages that artificial intelligence and digital transformation will bring to companies worldwide, and the spread and expansion effect of technology constitute another pillar of global competition.
FUTURE TOP TRENDS
Moreover, the global supply chain has weathered the most substantial storm of the past three years, exacerbated by global and regional geopolitical tensions atop the challenges posed by the ongoing global pandemic. In response, discussions and concerns surrounding the global supply chain have intensified. Embracing a strategy of friendly and reliable inter-economy supply chain structuring, commonly known as “friend-shoring,” presents significant opportunities for countries positioned as “safe haven suppliers,” such as Türkiye. This scenario underscores the importance of new-generation industrial policies, emphasizing a nation’s capability to independently develop technology and enhance production capacity in crucial areas like semiconductors, critical minerals and mines, clean and renewable energy equipment, as well as fifth-generation machine technologies and chips.
Each of these will be a hot topic that will either take a country higher in the world economy or drag it further down in the next five to 10 years, together with the global threats that the world’s leading economies have to deal with. It is necessary to consider these global threats in six fundamental categories: economic, social, environmental, cyber, political and military.
In the economic realm, countries must contend with risks such as global inflation and the cost of living, potential declines in living standards, rising unemployment and a contraction of economic opportunities. Social threats manifest as social unrest, turmoil, and heightened polarization stemming from uncontrollable migration. Environmental challenges include extreme natural and weather conditions, pollution, the depletion of clean water and biodiversity, as well as the overarching concern of global warming. These factors collectively shape the complex landscape that the world’s leading economies must navigate in the coming years.
Cyber threats are intricately linked to political and military challenges as disinformation disseminated through cyberspace and cyber terrorism directly impact the political, military and socio-political stability of nations. Consequently, cyber insecurity stands out as one of the foremost threats confronting all major economies. To safeguard their standing in the global economic-political landscape, and fortify political stability and military strength, countries must prioritize establishing a robust early intervention network to counter cyber threats. Strengthening the cyber defense network with domestically developed technology and enhancing military deterrence will emerge as pivotal focal points in the strategic agendas of the next five to 10 years.