Globalization Has Evolved. It’s Time for Businesses to Pivot

For many governments and organizations, the world is getting smaller, not bigger. The rise of economic protectionism after several decades of movement toward open markets is shifting the picture for many businesses, prompting some to retract or reorient overseas expansion.

While understandable, this mindset is misguided. Maintaining—and growing—a global presence should be encouraged. Adapting with the changes and playing to the strengths of a global presence, rather than shying away from the challenges the new world poses, will ensure businesses are positioned to generate value for today and tomorrow.

In an eye-opening report, UN Trade and Development found that global foreign direct investment fell by 11% in 2024, the second consecutive year it has decreased. Despite the current turbulence and the decline of multilateralism, international trade will likely remain broadly intact for a significant majority.

Supposing tariffs and sanctions are principally targeted to pressure Russia, China, and Iran, business can be conducted as usual in about 85% of the world economy even if the paradigm has shifted. The best companies around the world will continue to transact and operate internationally, and having the means to do so will only enhance their competitiveness.

Globalization isn’t dying; it’s being presented differently. We’re moving into an era when trade won’t be dominated by a single nation, but by constellations of influential regions. The shift of current power structures has encouraged conversation at a regional level, leading to stronger relationships between certain trade blocs.

This process is evolving, and it would be premature to speculate who the winners and losers will be. What we do know is that running businesses successfully from multiple jurisdictions around the world requires a substantially different approach than leading from any one hub.

In my experience, time in market beats timing the market. If a business has well-established international practices, the hard-earned relationships and reputation will far outlast the benefits of a sudden retraction due to current market conditions.

As a business leader, my job is to see around corners for our clients and understand the long-term strategy before making decisions in the short term. In our firm, we continue to nurture our global presence, leveraging our multijurisdictional footprint to guide clients through these tumultuous times.

Having the depth and breadth across geographies positions us to better understand the complexities our clients are grappling with—whether in Bogota, Berlin, or Brisbane. While globalization once bore the promise of lower labor costs or taxes, these incentives have lost their sheen, even drawing penalties in some cases.

The benefits of maintaining an international presence run much deeper today, allowing companies to connect with more customers as they expand their scale and market share.

Here is what we’ve learned about making this work:

• The importance of mobility is as much intellectual as it is physical. The executives who will thrive in this era are those who will constantly learn from the markets they serve, can pivot when conditions change, and understand that the best ideas—and the best people—rarely stay confined to one geography.
  With the world as volatile as it is, solutions to problems developed in one part of the world may be readily adaptable or relevant to another. Mobility allows a company to redeploy talent and ideas, shift production or provision, and adapt strategy at the speed of geopolitics.
• Prioritize empowerment rather than control. Global enterprises must trust local leaders to make decisions informed by regional context, clear frameworks, and shared values. I think of my role as a conductor, guiding local sections of an orchestra that together produce global harmony. This approach not only accelerates decision-making but also strengthens cultural alignment across geographies.
• Invest in local relevance. Global reach means little without local resonance. In addition to being familiar with local regulations, political dynamics, labor markets, and consumer expectations, the most successful businesses invest in relationships on the ground and cultivate teams that are attuned to the communities they serve.

Naturally, the bigger and more diffuse the business, the harder it becomes to ensure everyone swims in the same direction. But getting it right can make breadth a catalyst rather than a source of anxiety or weakness.

Globalization is evolving, but it’s surely here to stay.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Kate Barton is global chief executive officer of Dentons.

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