International Economic Relations Expert
The goal of any internationalisation process in a world in conflict is to pursue a strategy of expansion that helps to reduce risks.
2022 has been a year of continuous shocks with news such as the destruction of lives and property in Ukraine, rising fuel prices, runaway inflation, threats to widen the war in Europe and climate change affecting many parts of the world.
The reality is that we live in a complex world, with political, economic, religious, ethnic and other conflicts that have real effects on the economy and impact on internationalisation processes. Investing and exporting companies feel the pressure. Institutional policies must develop and implement strategies that respond meaningfully and creatively to situations that cause mistrust, deep uncertainty or violence.
The world is undergoing changes never before seen in human history. We face four transformative transitions. The energy transition: from fossil to renewable, technological transition: from physical to digital, economic transition: from west to east and demographic transition: from ageing nations to young nations. These are the new challenges that lead us to a global change, a different future.
An understanding of the risks is as critical for businesses and governments to make smart decisions as it is for exporters or investors to choose the right options or projects. The options for governments are manifold, from protectionist policies to free trade. On the other hand, money is protected, so investors also have the freedom to choose where they want to put it.
The goal of any internationalisation process in this conflicted world is to develop a strategy for international expansion that helps to reduce risks. It is possible to adapt the approach to new operational complexities, to understand the political relationships between countries, the options for creating synergies and securing favourable agreements.
The health crisis of recent years and the war in Ukraine have made it clear that companies need to design their supply chains around risk competitiveness, rather than just cost, with shorter and more agile supply chains, and the creation of trade flows that are not dependent on destinations too far away.
Businesses are operating in these increasingly challenging times. Geopolitical uncertainty, highly complex markets and an ever-changing regulatory environment contribute to the proliferation of commercial and regulatory risks. To overcome the challenges, you need to have strategies based on extensive market knowledge and develop the skills and knowledge to anticipate change and disruption. Be agile to react to changing market conditions, because even in times of crisis and uncertainty there are opportunities.
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