Table of contents for 18. June-August 2025 in I by IMD

Dear Reade Some leaders have always studied geopolitical shifts very carefully, understanding that the environment we are operating in is as critical and often more critical than the firm's strategy. In this edition of I by IMD, we focus on geopolitics – more precisely, the frames that help leaders identify, interpret, and address the geopolitical changes that impact their organization. Jerry Davis starts this issue by sharing with us what's behind President Donald Trump's many surprising moves and how the tech oligarchs are undermining the basic tenets of democracy. In their article “How to thrive in a fractious world”, David Bach, Richard Baldwin, and Simon Evenett advise leaders to accept the new normal, to design for uncertainty and make risk management a strategic advantage, to protect internal team cohesion from…

Whatever happened to the architect of the rules-based global trade system? The answer is not as simple as “Donald Trump” and lies in a much longer story. The American Dream was underpinned by Franklin D. Roosevelt’s New Deal policies: government should help people navigate hardship and build better lives. In the 1980s, Reagan recast government as a barrier to growth, not the guardian of fairness. The national narrative shifted from “help the little guys” to “the little guys have to help themselves”. And then came globalization and automation. While other advanced economies pulled policy levers to protect their people, US workers faced those shocks alone: a three-pincher middle-class squeeze. Automation replaced them, globalization undercut them, and offshoring displaced them. Wages fell, millions of jobs disappeared, and factory towns wasted away.…

The Trump 2.0 presidency has triggered significant geopolitical realignment. India believes this is best understood not as an isolated trigger, but as a manifestation of a sweeping, decades-long upheaval in international economic and political dynamics. This upheaval has been propelled by an uneven model of globalization that, while generating unprecedented prosperity for some, has also introduced new layers of insecurity and uncertainties – conflicts, pandemics, climate emergencies, etc. – and by rapid technological integration that binds nations ever more tightly together even as it weaponizes trade, markets, and financial instruments. There has been growing disenchantment with the UN and other post-Second World War institutions that have failed to adapt with time and no longer reflect the emerging international political and economic order. Trump has swiftly re-implemented and expanded his “America…

When Loh Chin Hua became CEO of Keppel in 2014, the company epitomized a not-uncommon Asian conglomerate model: diversified across sectors, asset-heavy, and driven by project-based revenue. Its operations – offshore rig construction, shipyards, infrastructure, real estate, and telecommunications – had long contributed to Singapore’s economic development. But by the mid-2010s, investor expectations had shifted. Markets increasingly favored focused companies with higher returns and scalable recurring income. Keppel’s complexity and exposure to cyclical industries meant its valuation lagged behind the sum of its parts. Over the next decade, Loh led one of the region’s most ambitious corporate reinventions – transforming Keppel into a global alternative asset manager and operator with deep expertise in sustainable urbanization and digitalization. This was more than a portfolio shift; it was a strategic and cultural…

In 2023, the traditional rug market faced saturation, particularly for hand-knotted rugs. Jaipur Rugs was a leading player in the handcrafted rug industry, but they sold mainly to retailers, which limited their reach to end consumers and control over brand messaging and pricing. To grow, they would need to reach new customer segments directly. Part of the company’s ambitious pivot was to start selling to individual households not just in India, but globally. Instead of highlighting technical aspects like design and durability (important for B2B), Jaipur Rugs recognized the importance of connecting with consumers on an emotional level. Repositioning the brand necessitated moving the focus from their product (carpets) to the stories of the artisans who create them. This storytelling highlighted the heritage, craftsmanship, and social impact behind their rugs…

Every air traveler has heard the flight attendant’s instruction: “Put your oxygen mask on first before helping others.” It’s a survival principle, yet leaders often do the opposite – they sacrifice their well-being in the pursuit of results. What if prioritizing self-awareness, breath control, and resilience wasn’t a luxury but a competitive advantage? In the past, leadership was about command and control, but the role has shifted from providing answers to enabling others to find them: asking the right questions, empowering teams, and fostering a culture of collective intelligence. It’s no longer about accumulating knowledge but expanding self-awareness and nurturing adaptability and innovation. This calls for a new set of leadership muscles: emotional intelligence, self-awareness, and intuition, in addition to strategic thinking. It’s not easy to be emotionally intelligent, self-aware,…

Adecade after the Paris Agreement, the consensus on climate action is showing signs of strain. The energy transition is underway – investments in renewables are rising, net-zero pledges abound, and sustainability is on the agenda in boardrooms – but the context has changed dramatically. A sharp rise in energy prices due to COVID-19 and war in Ukraine has jolted markets. For many governments, climate ambitions have been tempered by the need for energy security and energy affordability. Corporate leaders need to understand how energy impacts their businesses at the macro (energy markets) and micro levels (energy consumption and usage). Energy security in Europe was taken for granted for years. Underinvestment in domestic capacity and overreliance on imported fossil fuels, particularly Russian gas, left the region vulnerable. Soaring energy bills made…

The challenge Mario is VP of sales with a multinational pharmaceutical company headquartered in Brussels. He leads a large, dispersed team and is well-known for his vibrant leadership style and commitment. While Mario has enjoyed sustained success over his career, something has happened that is causing him severe stress. Quarterly metrics reveal that Mario’s team has failed to meet sales objectives in a couple of product lines. A meeting with his boss, Louis, to discuss the team’s performance leads to some stringent feedback; Louis emphasizes that the organization has high expectations for sales in the coming quarter and hopes that Mario and his team will “step up”. Coming out of this discussion, Mario feels triggered. He takes Louis’ comments to heart and struggles to see them as objective feedback, interpreting…

How does business get its way with politicians? And how does this dance between business and politics change when the regime is authoritarian rather than democratic? The second Donald Trump administration offers a revealing case study in how political leaders respond to business interests, whether through direct influence from elite donors, the structural incentives of capitalism, or feedback from financial markets. This article explores competing theories of business influence, from overt oligarchy to more diffuse market-based pressures, and asks whether corporate elites truly rule, or whether politicians simply act in their interests without explicit orders. By examining the early months of Trump’s return to power, we can assess whether he served his business backers, responded to market signals, or followed a more autocratic model in which loyalty matters more than…

China is more than a manufacturing heavyweight; it is the only manufacturing superpower. When it comes to gross production, China’s share is three times that of the US, six times Japan’s, and nine times Germany’s. China’s industrialization is unprecedented. The last time the global manufacturing crown changed hands was when the US overtook Britain before the First World War. That transition took the better part of a century, while China dethroned the US in 15 to 20 years. China’s rapid rise began with a strategy of joining global supply chains by opening up on the import and export sides to become the workshop of the world. It welcomed foreign firms – mainly from the G7 – to set up operations that slotted into global production networks. It made China attractive…

1. Investments in next-generation technologies. 2. Providing access across Europe to design tools and pilot lines for the prototyping, testing, and experimentation of cutting-edge chips. 3. Certification procedures for energy-efficient and trusted chips to guarantee quality and security for critical applications. 4. A more investor-friendly framework for establishing manufacturing facilities in Europe. 5. Support for innovative start-ups, scale-ups, and SMEs in accessing equity finance. 6. Fostering skills, talent, and innovation in microelectronics. 7. Tools for anticipating and responding to semiconductor shortages and crises to ensure the security of supply. 8. Building international partnerships with like-minded countries.…

2018 March: The US imposes 25% tariffs on steel and 10% on aluminum imports globally. July: The US implements 25% tariffs on $34bn of Chinese goods; China retaliates similarly. September: The US adds 10% tariffs on $200bn of Chinese imports; China responds with $60bn. 2019 May: The US increases tariffs on $200bn of Chinese goods from 10% to 25%. 2020 January: The US and China sign a Phase One trade deal; some tariffs are reduced or suspended. 2025 February: The US raises tariffs on Chinese imports by 10%; China retaliates with 15% on US goods. March: The US imposes additional 10% tariffs; China responds with tariffs on US products. 2 April: The US increases tariffs to 54% on Chinese goods; China retaliates with 34% tariffs. 9 April: The US escalates…

Cynthia Hansen: We've been thinking about geopolitical and economic uncertainty and how people are quick to blame institutions when they do not feel heard. What underpins this feeling of disenfranchisement, and how does that relate to trust? Richard Edelman: We're living in an age of grievance, and grievance is a lack of belief in the future. It's also a sense that the system doesn't work, that I don't have an equal chance and that it’s rigged. It's reinforced by an immensely changed information ecosystem, where two-thirds of our respondents across 28 countries (2025 Edelman Trust Barometer) believe journalists lie to them to achieve their goals, such as clicks. It's a rebellion against the establishment. In 50 elections in the past year, most were won by the opposition because they were different:…

Even seasoned negotiators can hesitate when addressing sensitive issues in difficult situations. Take the following simulation exercise: participants were tasked with confronting a military commander about serious allegations of sexual violence committed by soldiers under his command at a displaced persons’ site. Despite the gravity of the situation, the negotiator – fearing that a direct confrontation could jeopardize humanitarian access for critical services like food deliveries – softened the message, saying something along the lines of: “Commander, I just want to raise a small issue about a few violations that we heard about.” In doing so, they unintentionally diminished the severity of the crimes, jeopardizing not only justice for the victims but also undermining their credibility during the negotiation. The military commander likely interpreted the message as referencing unconfirmed rumors…

Why no one foresaw the impact of the ‘thumbs up’ button The seemingly inconsequential digital thumbs-up icon we know as the like button originated around 2000 and had unexpectedly momentous consequences. Today, we collectively click the like button around seven billion times a day. It became the core of the social media business model and triggered the disruption of the $700bn advertising industry and the rise of digital marketing. It changed how we pay attention, communicate, relate, create, promote, and transact. And, as with other pervasive innovations, it also created a host of unanticipated social side effects, like social anxiety and polarization. Who invented it and what accounts for this meteoric rise? Despite three years of research, it’s hard to say who should take credit. Facebook popularized the button in…

Crafting a powerful and authentic story to support transformation is a great start, but it must be supported by the right skills, mindset, and environment. • Storytelling skills. Few people are naturally gifted storytellers. Narrative competence cannot be learned just from theory; it must be consistently practiced and refined over time. Consider seeking external help to hone your skills. • Persuasion, not coercion. Leaders might be tempted to use their hierarchical position to force strategic change through directives or coercion, but what might appear quicker and easier will soon backfire. Instead, focus on empowering individuals to embrace change. Changes should be chosen to align with individuals’ goals, which they are already committed to achieving: help them see themselves as the “heroes” in their own story. • Opportunities for personal experience.…

As an executive and leader, you may influence your team members and followers more than you realize. The phenomenon of emotional contagion shows that the way leaders feel, think, and act profoundly influences the group dynamics of their teams. Emotions are highly contagious, especially when they originate from leaders. Studies show that shared positive emotions enhance cooperation, reduce conflict, and increase task performance, while shared negative emotions have the opposite effect. Similarly, how leaders care for their health often has an unexpectedly strong influence on their followers. The health-oriented leadership approach identifies leaders as key players in enhancing health within an organization. Leaders serve as role models for their followers even if this process happens unconsciously for both parties. If a leader is constantly stressed, overworked, staying late at the…

AFFORDABILITY BASF, the world’s largest chemical producer, announced in 2022 that it would significantly downscale its European operations due to the cost of energy. The German firm’s margins had collapsed as Russian pipeline flows stopped and gas prices soared. The company decided to shift investment and production toward China and the US, where energy prices were lower and supply more secure. The case illustrates how energy security and energy affordability can overpower sustainability commitments in the face of shocks. In addition, it highlights how energy price volatility can become a deindustrializing force, raising broader questions about Europe’s ability to lead the clean transition while maintaining competitiveness unless access to affordable energy is secured. SUSTAINABILITY Apple has made ambitious climate commitments, including a pledge to achieve carbon neutrality across its supply…

Anchor yourself and be aware of your own state: In an intense situation, bring yourself back into the moment physically. You’ll gain time and prevent yourself from reacting to your triggers. Concentrate on your breathing or try something like feeling how your feet are touching the ground. Focus on your breath or posture to avoid getting carried away by too immediate a reaction. Use your emotions as a reminder to anchor yourself. Listen deeply and observe non-verbal cues: Pay close attention to verbal and non-verbal cues, listening for the context and the purpose of what the other person is telling you instead of immediately reacting to what they say. Ask yourself why they are sending these messages and whether or not you agree. If you spot something inaccurate, don’t be…

1. What is your personal motto? “Chess is cool!” 2. Name three traits that make a great leader. Strong communication skills, intuition, and the ability to anticipate what's coming next. 3. What experience has had the greatest influence on your leadership style? I’ve mostly been leading chess pieces in my life, so I can’t say I have a defined leadership style outside of the chessboard. But I’ve always believed in the power of leading by example. 4. How do you balance your well-being and personal life with performance? To perform well in chess, I need to feel good mentally and physically and have the support of my family. That's why I try to dedicate enough time to every aspect of my life. Of course, my number one priority is my…

Alesson learned from my leadership faculty colleagues is that a leader must watch her energy levels. What energizes me? And what drains energy from me? The balance has to remain positive if you wish to be an impactful and inspiring leader. As I approach the nine-month mark of leading IMD, I have found that engaging with alumni and our institution’s many friends greatly energizes me. I have been able to participate in about 25 alumni events since September. These include in-person meetings with alumni in Hong Kong, Shanghai, New Delhi, The Hague, Amsterdam, Riyadh, Kuwait, Abu Dhabi, Mexico City, and Monterrey, as well as closer to home in Zurich, Geneva, and, of course, Lausanne. In addition, there have been virtual exchanges with alumni from Australia to South America. Particular highlights…

Geopolitics has returned to the top of international business concerns, exacerbated by Donald Trump’s return to the White House. The President’s on-again, off-again confrontational trade policy is a case in point. “Liberation Day” on 2 April will be hard to forget. Despite its intensity and relevance for business leaders, geopolitics’ re-emergence is widely misunderstood and treated as a continuation of traditional political or country risk. That is a mistake. Geopolitics introduces a different logic, one with sharper edges, deeper implications, and longer shelf life. For companies engaged in international commerce, recognizing this shift and its differentiating factors is essential to understanding the structural forces now shaping market access, supply chain design, team management, and commercial footprint. Without this understanding, companies are more likely to be tripped up by geopolitical risks…

In conjunction with the World Economic Forum and Boston Consulting Group, we have been exploring how companies can most effectively scan, anticipate, and respond to geopolitical risks through radar techniques to detect state acts and events, and sonar techniques to surface root causes. Too heavy a focus on the cut and thrust of acts and events can result in a lack of attention paid to potentially more materially significant trends and drivers shaping the future. Based on interviews with executives from 25 major companies, our most recent white paper, From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business (scan QR code below to read), highlights six commercial benefits of developing these capabilities (see right). Our interviews identified more than 80 geopolitical risks that executives viewed as relevant…

We’re not navigating a new world order. We’re leading through a new world (dis)order. From global conflicts and climate disruption to economic volatility and digital acceleration, every system we rely on is being stress-tested. Change is no longer linear but exponential. In a world evolving at warp speed, traditional leadership models are struggling to keep up. The future isn’t business-as-usual; it’s business-as-possible. We need a new blueprint designed for complexity, fueled by adaptability, and powered by human connection. This is the era of exponential leadership where bold vision meets intentional design to drive innovation, resilience, and sustainable growth. At The Female Quotient, we’ve always believed in evolving how we lead. We started with conscious leadership, raising awareness, and making the invisible visible. Then we moved into brave leadership, choosing action…

The Regional Comprehensive Economic Partnership (RCEP) Launched: Negotiations began in 2012; the agreement was signed in November 2020 and entered into force in January 2022. Members: 15 Asia-Pacific nations, including the 10 ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and five of their FTA partners (Australia, China, Japan, New Zealand, and South Korea). India was initially involved but withdrew in 2019. Purpose: To create the world's largest free trade area by harmonizing and building upon existing ASEAN+1 FTAs, aiming to reduce tariffs, streamline trade, and enhance economic integration among member countries. Belt and Road Initiative (BRI) Launched: Announced in 2013 by President Xi Jinping. Scope: As of early 2024, over 140 countries have joined the BRI, encompassing nearly 75% of the global population…

The Donald Trump roller-coaster ride throws into doubt the quest for a new nature of business. Can it still be achieved, or will we be thrown back into harmful and wasteful old ways? I remain optimistic: science doesn’t change because of regulations any more than climate change stops because of an executive order. The early signs from Washington were not hopeful. In January 2025, the US left the Paris Agreement on climate change for the second time in a decade. Weeks later, the US government announced funding cuts for everything from UN agencies to the Environmental Protection Agency. Some of the world’s most important climate research sites, including the National Oceanic and Atmospheric Administration, were also affected. However, censorship is the biggest cause for concern in Trump’s agenda, with major…

1. How often do you get a good night's sleep? a) most nights, b) sometimes, c) rarely. 2. How healthy is your diet from a nutritional point of view? a) very healthy, b) mixed, c) not healthy at all. 3. How often do you practice breathing or mindfulness techniques? a) daily, b) sometimes, c) rarely or never. 4. How often do you feel stressed at work? a) rarely, b) often, c) most of the time. 5. How often do you do meaningful exercise? a) daily, b) sometimes, c) rarely or never. How did you do? Mostly As: Congratulations – you are caring for your brain, enabling it to cope with uncertainty. Mostly Bs: You’re doing some things well, some of the time – you just need to commit to a brain-healthy…

• The energy trilemma – sustainability, security, and affordability – is back at the center of global strategy. • Recent shocks have exposed infrastructure gaps, political contradictions, and economic trade-offs. • Firms must assess their energy exposure and scenario readiness across geographies and supply chains. • Innovation, foresight, and geographic agility are emerging as sources of resilience. • Strategic leadership means embracing instead of avoiding the tension at the heart of the trilemma.…

Chinese EV manufacturer BYD edged out Tesla to take the top spot in our Future Readiness ranking released in May. It came as a report showed that BYD outsold its US rival in the European market for the first time. The feat is all the more impressive given that the EU has recently imposed tariffs on Chinese-made EVs. So, what has changed? Elon Musk has promised many innovative products over the past decade, including robotaxis, humanoid robots, and fully autonomous driving. However, he has consistently missed deadlines, and some experts predict that most of these projects will be years in the making. Conversely, BYD’s Wang Chuanfu has remained focused on developing the company’s capabilities. Today, it is the world’s biggest EV manufacturer powered by batteries with an impressive range. In…