The geopolitical, ideological and economic decoupling

After happy globalization, the future will be characterized by a geopolitical, ideological and economic decoupling. The phenomenon of decoupling is present everywhere and Kelony® forecasts indicate a strong and growing accentuation witnessed by these phenomena:

  • Different reactions to the war in Ukraine also within the Atlantic Alliance;
  • Diverging solutions on climate change to decorrelate economic growth from the growth of CO2 emissions;
  • Conscious detachment in Western public opinion of our dependence on Chinese production not only for masks and drugs.

The escalation of conflicts between great powers and pandemic waves show us the fragility of interdependent global production and supply chains. Economic actors are reconsidering their strategies and advocating decoupling to reduce interdependence, particularly with China and Russia. The consequence will be a strong tendency to choose diverging business models, technologies and standards. A new era of risk inflation is opening up due to growing isolationism, which will lead to conflicting trajectories with the East and Asia. A new era is beginning and, like everything that always has two faces, globalization is also increasingly showing its negative sides. The long period of abundance and economic benefits and cross-border links seems to have partially reversed. Businesses are rethinking where their products come from and stockpiling, even if this results in lower efficiency and higher costs.
If it lasts, this turnaround with respect to a well-regulated globalization will have important consequences. The world could experience higher inflation and lower productivity, but more resilient and robust supply chains because they are shorter and more local.

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