Competitiveness in an age of uncertainty: what difference will a half-decade make?

No country or company has ever sustained economic growth without continually sharpening its competitive edge.

Yet, the tools traditionally used to do this are being blunted by today’s heightened levels of geopolitical and economic uncertainty, mounting fiscal constraints, and deepening policy challenges.

In the face of these threats, competitiveness has become a focal point of national and corporate agendas, with renewed pushes for accelerated innovation, reform, reskilling and investment.

Nations and businesses see a critical need to revive faster growth and bolster resilience, but their ability to achieve this will require them to anticipate how the future may play out, particularly when it comes to geopolitics and regulations.

Mapping these potential scenarios is the focus of Global Economic Futures: Competitiveness in 2030, the second edition in a new series published by the World Economic Forum in collaboration with Accenture. Designed to help decision-makers understand trends and vulnerabilities, stress-test strategic assumptions, and develop strategies for navigating uncertainty, it explores four scenarios for competitiveness that could unfold over the next five years.

The white paper highlights how different levels of geopolitical volatility and regulatory stringency could create not just risks, but also opportunities. By analysing various cross-sections of these metrics – high levels of geopolitical turmoil and regulatory tightening, low levels of both, and a mix of high and low on either side – it aims to help leaders optimize their plans for a range of eventualities.

The first scenario is Fortress Economics, where stringent regulations and geopolitical instability create a world of protectionist competition. The global economy in this situation would be increasingly shaped by strategic insulation, uncertain alliances and the weaponization of resources, rules and policy tools.

The next scenario is Negotiated Order, where geopolitical stability and stronger regulatory oversight create a more predictable business environment. It is regulators, not just market dynamics, that would shape the contours of economic activity in this future. Competitiveness would be less restricted by strategic alliances and increasingly shaped by the ability to navigate and influence regulations, including through cross-border regulatory arbitrage and long-term investments and strategies.

A third scenario is Survival of the Fastest, where a disruptive interplay of regulatory easing and international fragmentation creates a volatile, opportunistic and high-stakes environment. A lack of institutional safeguards, an intensification of strategic competition, fractured markets and compliance gaps would drive a “race to the bottom” on standards, norms and business practices.

In the last scenario, Fluid Order, geopolitical stability and reduced regulatory barriers enable rapid innovation, economic dynamism and open competition, halting the growth slowdown of recent decades. However, lower safeguards and an uneven distribution of benefits would eventually erode prosperity and convergence.

Every sector would be impacted by these geopolitical and regulatory trends, and some sectors might fare better than others. Exploring the patterns of exposure provides a way to identify key risks, opportunities and strategies.

Drawing on analysis of selected enabling and constraining factors across 12 sectors, Competitiveness in 2030 presents a high-level snapshot of the potential headwinds and tailwinds for output and competitiveness in each of the four scenarios.

Several patterns emerge. The regulatory easing and geopolitical stability of the Fluid Order scenario offers benefits for all sectors, while the heightened geopolitical volatility in the Fortress Economics and Survival of the Fastest scenarios is likely to generate broad-based headwinds – although the degree of exposure would vary.

Sectors with a strong regulatory baseline and high degree of domestic orientation – including education, agriculture, medical and healthcare, and engineering and construction – appear more resilient to fragmentation and regulatory risks. However, those reliant on physical cross-border flows – such as manufacturing, supply chains and transportation, and leisure and travel – are more exposed in scenarios involving geopolitical volatility, particularly where regulation and economic policy may be used as tools of strategic competition.

The situation is markedly different for digitally driven and asset-light sectors, such as IT and digital communication, and financial, professional and real-estate services. While the less physical nature of these sectors may shield them from disruption to trade and supply chains, their deep international interconnectedness means they may face headwinds from the fragmentation of digital and talent flows or poor regulatory calibration.

Other sectors may be insulated in scenarios involving volatility if they are of high strategic importance. This could include energy and materials, as well as some manufacturing segments – which are more likely to benefit from state support in volatile scenarios – and from stronger incentives and capital support in more stable ones.

In a world of unprecedented uncertainty and volatility, competitiveness has become a national and corporate priority. Turning this goal into reality will require an ability to strike various delicate balances – between openness and protectionism, between short-term, reactive strategies and long-term objectives, and between protecting the public interest and accelerating business dynamism.

It will also demand renewed focus on what the report calls “no regret” strategies, from strengthening core capabilities and developing geopolitical muscle to add resilience, to building foresight and strategic agility to enable flexibility as situations change.

Competitiveness in 2030 aims to help decision-makers find ways to do all of these things – not by predicting the future, but by equipping them with the tools to prepare themselves for whatever may lie ahead.