Old Playbook for Globalisation Has Changed: IMD Business School Report
Why It Matters
The re‑orientation toward security and resilience forces Southeast Asian firms and governments to redesign strategies, influencing investment flows, trade patterns and the region’s competitive edge.
Key Takeaways
- •Globalization now prioritizes security and supply‑chain resilience over efficiency.
- •Southeast Asia sits on US‑China fault line, facing volatile tariffs.
- •Political risk now precedes economic factors in location decisions.
- •Energy security emerges as the region’s top vulnerability and opportunity.
- •Companies must adopt portfolio‑of‑bets strategy, not single optimization.
Summary
The IMD Business School’s new report argues that globalization’s purpose has shifted from pure scale and cost efficiency to a focus on security and reliability, a change that is reshaping how firms operate in Southeast Asia.
Professor David Bach explains that political risk now comes before economic calculus when choosing production sites. Companies are de‑risking exposure to China by spreading operations across Vietnam, Thailand, Indonesia and Malaysia, while also watching U.S. tariff pressures. The report highlights energy security as the region’s most acute vulnerability.
“First you deal with the politics, then you look for economic efficiency,” Bach says, underscoring the inversion of the old playbook. He adds that the winners will be those who treat volatility as a constant and build a portfolio of bets rather than a single optimization.
For business leaders, the shift means investing in resilient supply chains, renewable energy and digital sovereignty. Policymakers must prioritize energy reserves and regulatory stability to keep Southeast Asia attractive as the “China‑plus‑one” hub in an increasingly fragmented global economy.
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