Is it just me, or do others have the same challenge that I do recently, in determining if updates about the global economy will be found in the Business or the Politics section of news subscriptions?
It seems we are in a state of heightened business and economic disruption and sociopolitical activism. It is a reminder of why I prefer to analyse the world with a 'political economy' perspective, which looks for connections between individuals, institutions and systems of political and economic power.
There is a tremendous variety of social, political, environmental, economic and institutional trends and narratives playing out now that can be viewed individually and separately, but should be viewed as a suite of inter-related and inter-connected forces. For readers of this magazine, these cross-currents must be examined regarding their positive and negative impacts on global investment decisions: the industries affected, magnitudes of investment, preferred locations and the quality of investment execution over time.
What are some of these story lines I’m referring to? There are many, all with contrary and opposing forces.
They include: trade agreements and near-agreements but also new tariff and trade wars (for example, France, India). More competitive government pursuits of global investment attraction (globalisation) but also concerted efforts by many countries at investment repatriation (retrenchment). Broad populist political movements on the left and the right, but also many examples of emboldened authoritarian leaders. Modest progress on environmental protections but even greater and growing perils regarding the climate, oceans, fresh water, habitat, species and more. Rethinking and destabilising certain global and regional multilateral institutions, while also recasting bilateral economic and trading relationships – most notably between the US and China.
Social charitable awareness raising and climate strikes are notable, but political fundraising, trade association promotion and chamber of commerce advocacy are also (even more) powerful forms of activism. And there is a seemingly conflicting search afoot for greater economic competitiveness and social equity that is represented, in part, by sometimes chastened – but no less dominant – multinationals.
Paying attention to these interlaced themes produces a view of the global political economy being realigned in real time. They relate to a broader question recently posed in an editorial titled: 'What kind of capitalism do we want?' by Klaus Schwab, chairman of the World Economic Forum.
The battle between shareholder capitalism, state capitalism and stakeholder capitalism is taking place before our eyes. We should expect that clash of philosophies and policies to intensify in 2020.
Gregg Wassmansdorf is senior managing director, consulting, at Newmark Knight Frank, a global real estate services firm. He is a member of the Site Selectors Guild. E-mail: firstname.lastname@example.org