Geopolitical tensions are accelerating trade regionalisation and aligning capital with strategic priorities. Governments are steering investment towards AI and critical sectors, while companies increasingly prioritise resilience over pure cost-efficiency. Growth momentum is shifting to emerging markets, and Asia Pacific’s STEM scale is strengthening its position as the global hub for advanced technical talent.
Delivery
This report comes in PPT.
Key findings
Global trade shifts towards new directions and regional blocks
Geopolitical tensions are accelerating the regionalisation of global trade. US tariff policy has prompted partners to diversify exposure, fast-track free trade agreements and redirect supply chains towards alternative corridors. Global container port traffic fell by 1% in 2025, signalling reduced long-haul flows. Cross-border trade is increasingly shaped by resilience considerations rather than pure cost-efficiency.
Capital flows become politically aligned
Government intervention is redefining where and how capital is deployed. In 2025, subsidies, tax incentives and industrial strategies directed investment towards AI, automation and critical minerals. Manufacturing geography selection increasingly reflects geopolitical alignment and risk mitigation, favouring trusted and geographically proximate markets over traditional low-cost destinations.
Emerging economies gain growth leadership
Incremental business expansion is shifting towards emerging markets. Economies in Asia Pacific and Latin America are attracting new company formation and investment as developed markets slow. The Philippines, India and Vietnam posted business registration growth above 5% in 2025, while Brazil and Argentina climbed four places in global competitiveness rankings amid improving macro stability.
Talent concentration becomes a strategic advantage
AI adoption and automation are reshaping global labour competition. Companies demand fewer but more specialised workers, particularly in science and engineering. While developed markets lead in higher education attainment, Asia Pacific’s scale and strong STEM (Science, Technology, Engineering and Mathematics) output make it home to roughly three quarters of global science and engineering graduates in 2025.
Our expert’s view of business dynamics in 2025
Key findings
Global businesses to see significant shifts in trade, investment, labour and technology
Top five trends in business dynamics
Top five trends in business dynamics uncovered
Drivers of consumer markets and impact on business dynamics
Trade and geopolitical uncertainty reshapes global supply chains
Capital allocation shifts towards strategic regions and industries
Business growth shifts towards emerging and developing markets
Labour costs constrain business expansion and supply-chain shifts
Engineering skills gives Asia Pacific a strategic advantage in AI and automation shift
Leveraging global urban shifts for future growth
Opportunities for growth
Ease of doing business and new business density
Expenditure on R&D
Freight traffic, 2024-2025
Unemployment rates
Employed population
Wage per hour, and wage per hour in manufacturing
Higher education attainment and study programmes
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