The Missing Global Force: Geopolitical Instability in the Digital Age

The Missing Global Force: Geopolitical Instability in the Digital Age

I agree with the point made in this week’s McKinsey articles that strategy development must envision the future as it may be, not as it once was.  However, the articles failed to address what I would argue is another crucial global force: geopolitical change in the information era. The articles took for granted (thereby contradicting their fundamental forward looking premise) that the geopolitical realities of today will exist tomorrow.  There is much to be said about the development of the BRIC countries and the ICASA regional construct, yet the articles fail to consider the likely ramifications of the emergence of a middle class, especially in China, as well as geopolitical instability at large.

Both articles are predicated on the current construct of western technical innovation supported by inexpensive assembly/manufacturing by low-wage workers.  China’s economy has skyrocketed since President Nixon formally reestablished diplomatic ties and reinvigorated economic trade with China in 1973[i]. However, how long can the West rely on inexpensive goods being manufactured in China as it’s middle class grows?  The growing middle class will result in a better educated workforce that will not settle for the low wages associated with manufacturing (there is a reason that iPhones are not assembled in Silicon Valley).  More importantly, how long can China maintain it’s impressive, yet sinister, “Great Firewall of China[ii]” that restricts the freedom to access an open internet?

What will happen to China if its growing middle class is able to punch through the firewall?  Could 1989’s Tiananmen Square massacre be replicated throughout the mainland, if China’s middle class is not as willing to tolerate the Communist Party?  Could a “subversive” quest for unfiltered information lead to political instability within China?

I don’t pretend to have a crystal ball, but the McKinsey articles lacked any appreciation for geopolitical changes when developing business strategy.  While China was the focus of this short blog post, India-Pakistan relations are dicey, the proxy war in Yemen could easily lead to a major Middle East conflict, and Russia has a propensity to acquire territory while the West is sitting on its laurels. Oh yeah, could the festering problem above the 38^th parallel (North Korea) lead to cataclysmic consequences to economic powerhouses Japan, South Korea, and China?

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[i] https://www.theglobalist.com/where-would-china-be-without-nixon/

[ii] https://www.bloomberg.com/quicktake/great-firewall-of-china