"A strategic inflection point is a time in the life of business when its fundamentals are about to change. that change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end." Andrew Grove
The global order has been shifting for years. An inflection point to a certain degree was inevitable. Speaking last November in London, U.S. Joint Chiefs Chairman Martin Dempsey likened today’s circumstances to the “strategic inflection point” supposedly confronted by Allied leaders at the Tehran Conference of November 1943. When asked to define his terms, Gen. Dempsey answered that the situation “feels to me like it’s a strategic inflection point and that the structures and…our effort to kind of shape the world is changing. And I don’t know what it means yet, but…I want to generate that conversation.”
What is an inflection point? An inflection point refers to a key event that changes the trajectory of a situation related to the economy or society.
The COVID-19 pandemic accelerated the realization of the need for change and pinpointed the fragile nature of our global order. Rapid digitization, disrupted supply chains, nascent technologies, global trade realignments, great power competitions, and significant demographic shifts are morphing Western hegemony. For example, by 2050, those ages 60 and above will outnumber those ages 14 and under in the United States, an epic shift.1 Social safety nets in the US and the rest of the West will strain under the weight of old promises to be kept.
Economically speaking, interest rates are rising in the face of persistent energy inflation while most nations look to secure iffy supply chains reversing decades of globalization. Climate issues are triggering investments in decarbonization and sustainability, while geopolitical instability has increased overall uncertainty and political risk. As COVID-19 restrictions fade out, the world is left wondering when will next pandemic hit our extremely dense urban centers as our highly mobile societies mingle. Even with a resolution to the war in Ukraine, unresolved conflicts with Russia and China over spheres of influence will keep our diplomatic discourse brittle.2 Therefore, economic and social disruptions will continue to prey on our manmade bridges of civility with profound effects on our social fabric and the world economy.
At a minimum, despite our interconnectedness, our world will polarize around Washington, DC, and Beijing in the near term.3 I fear we could see a far more fractured world stage in a balkanization of interests around water, energy, and collective security. This is undoubtedly the end of the Post-World War II order, including Francis Fukuyama’s “End of History and the Last Man” vacation of the last three decades. Fukuyama was surprised at liberal democracy’s fragility since the triumphal days after the end of the Cold War.4 I am not sure that liberal democracy was too fragile or that authoritarianism continues to have true staying power under the communist banner as the dictatorship of the proletariat.
Until next time. Travel safe.
1 (article) Eberstadt, Nicholas The Future of Global Population National Affairs Number 53, Fall 2022 https://www.nationalaffairs.com/publications/detail/the-future-of-global-population
2 (web source) CBS News Hal Brands on the potential of future conflict with China "Intelligence Matters" https://www.cbsnews.com/news/hal-brands-on-potential-of-future-conflict-with-china-intelligence-matters/
3 (Article): Kempe, Frederick. “Op-Ed: A New World Order Is Emerging - and the World Is Not Ready for It.” CNBC, CNBC, 5 Apr. 2022, https://www.cnbc.com/2022/04/03/a-new-world-order-is-emerging-and-the-world -is-not-ready-for-it.html.
4 (article) Ikenberry, John After the End of History: Conversations With Francis Fukuyama Foreign Policy Oct 2021 https://www.foreignaffairs.com/reviews/capsule-review/2021-08-24/after-end-history-conversations-francis-fukuyama?gclid=CjwKCAiApvebBhAvEiwAe7mHSJRWtxWN2530qqmtN5BvfHImhubH2AwfZ60DNFEqd4D-jfIkFfML BxoC7UgQAvD_BwE