For more than three decades, globalization was driven by a simple principle: let markets decide. Governments dismantled trade barriers, outsourced production to wherever costs were lowest and assumed that economic interdependence would, sooner or later, reinforce political stability. Efficiency became the overriding objective, while geopolitics was largely treated as a relic of the twentieth century. That assumption no longer holds.
The change has not arrived because globalization failed. On the contrary, it became so successful that it created new forms of vulnerability. The concentration of semiconductor manufacturing, critical minerals, pharmaceutical ingredients or battery materials in a handful of countries has revealed that efficiency often came at the expense of resilience. The disruptions triggered by the pandemic, followed by Russia’s invasion of Ukraine and the growing strategic rivalry between the United States and China, exposed how fragile many supposedly optimized supply chains had become.
The response has not been deglobalization, despite the popularity of the term. Global trade continues, multinational companies remain deeply interconnected and Asia is still the world’s manufacturing centre. What has changed is who increasingly shapes those flows. Industrial policy has returned. Governments are subsidising strategic industries, restricting exports, screening foreign investment and encouraging companies to relocate production of critical technologies. The invisible hand of the market has not disappeared, but it now shares the stage with the visible hand of the state.
This transformation is particularly evident in Asia. Japan is investing heavily to secure supply chains for semiconductors and critical materials. Vietnam seeks to position itself as an alternative source of rare earths. South Korea and Taiwan are strengthening strategic partnerships that would have seemed unnecessary only a decade ago. Even companies that continue expanding in China are reorganising their manufacturing networks so that production for the Chinese market remains in China while exports are increasingly supplied from Southeast Asia or elsewhere. The objective is no longer to produce at the lowest possible cost, but to ensure that production can continue under almost any geopolitical scenario.
For business leaders, this marks a profound shift. Decisions that once belonged exclusively to procurement or finance departments are now discussed alongside geopolitical risk assessments. Questions about tariffs, sanctions, export controls or diplomatic tensions have become as relevant as labour costs or logistics. Competitive advantage increasingly depends not only on producing efficiently, but on anticipating political disruption before it occurs.
Globalization, then, is not coming to an end. It is entering a different phase—one in which states have reclaimed a decisive role in directing the world’s economic architecture. Markets will continue to matter, but they will operate within boundaries increasingly defined by national security, strategic autonomy and political priorities. The next era of globalization will not be less global. It will simply be governed by different rules—and by different owners.
