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| | Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms
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| | | | Business leaders continue to devote significant attention to geopolitical uncertainty and its effects on their organizations. In the face of new tariffs, changing trade dynamics, and other disruptions, CEOs are taking a range of actions to both protect their companies from shocks and create business value. These include establishing dedicated geopolitical nerve centers and adapting their business models to operate globally in a fragmenting world. This week, we look at how leaders can guide their companies toward growth and value creation amid rapid shifts in geoeconomic conditions. | | | | | | | |
| | | The tumultuous nature of today’s business environment has many CEOs feeling uncomfortable and seeking a stronger grasp on geopolitical issues than ever before. According to McKinsey experts who work with executives across geographies and industries, corporate leaders should maintain both short- and long-term views as they gauge which developments require planning and action. “Tariffs may be the current focus, but leaders should think about how multiple drivers—including broader geopolitics, global trade flows, technological advances, the energy transition, and demographics—are evolving, and the interplay between them,” says Partner and Global Director of Geopolitics Ziad Haider. Senior Partner Sven Smit adds that CEOs should find a balance between defending against near-term tariff risks and seizing opportunities to invest in growth areas such as AI, e-commerce, or robotics. Meanwhile, some organizations are moving quickly to diversify their supply chains and stake their claims in new trade corridors as the global landscape transforms, notes Senior Partner Cindy Levy. CEOs can approach this moment much like surfers surveying the ocean, observes Senior Partner Shubham Singhal: “Business leaders have to learn how to ride the waves.” | | |
| | | | | | | That’s the share of foreign direct investment (FDI) dedicated to future-shaping industries and resources, according to a McKinsey Global Institute analysis of projects announced from 2022 through May 2025. Investments in future-shaping industries include funding for data centers that power AI, semiconductor fabrication facilities, and electric-vehicle and battery manufacturing facilities. “Announced FDI can offer strategic foresight, indicating how industries, trade routes, and national competitiveness factors may evolve,” say Senior Partners Michael Birshan, Nick Leung, and Olivia White and their coauthors. “In weighing their next moves, executives and policymakers can take note of the clues that FDI yields.” | | |
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| | | Lead by seeking growth amid disruption. | | | | | — Edited by Eric Quiñones, senior editor, New York
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