Each year, the Center for Global Business (CGB) invites students, staff and alumni to an event of the Distinguished Speakers in International Business Series that examines trends for the global business environment over the next five years. Erik Peterson, partner and managing director of the Global Business Policy Council at Kearney and CGB advisory council member, returned to Van Munching Hall on Feb. 10, 2025, to share “World In Flux: Global Wildcards 2025-2030.” The report outlines five significant trends that will dramatically impact the world economic outlook.
The program’s host Kislaya Prasad, CGB academic director and Smith research professor, asked Peterson to share his thoughts as Prasad noted “it seems as though the bottom is falling out right now.”
“We didn’t know how much flux the world would be in now,” Peterson said. “But for some time now we’ve been able to predict that the degree of volatility on a number of levels would be rising.” The shifts that are occurring in the United States are also happening in other parts of the world.
Historically, the annual report looked at trends but as Peterson points out, this year they “recast” their approach to look at “wild cards, the discontinuous scenarios rather than the continuous scenarios.”
The Middle Powers
Prasad observed that there used to be discussions centered around the West and China, but now things are framed in terms of the U.S. and China, and he emphasized that the report talks about “middle powers”.
“From our point of view, there are a number of significant powers at the middle range that have been expressing themselves as BRICS] and BRICSPlus,” said Peterson. “In the end, they are becoming much more significant economically and politically by organizing themselves in the BRICS framework. I think they’ll have a more important influence in the future.” The founding members of BRICS are Brazil, Russia, India, China and South Africa. The group has expanded to include Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates.
Planning for Tariffs
With news of U.S. imposed tariffs, Prasad noted it is not just something that is happening in the U.S.
“Over the years as you suggest, the level has been rising on these government interventions. I think it will probably continue rising in the future,” Peterson added. His team has been looking at a number of contingencies “on a breakdown of the trading system,” but that is something he does not think is very realistic at this point. He referenced research that the International Monetary Fund (IMF) has been doing related to a potential trading collapse which, if it happened, “could lead to a decline in global output of 7% or so.” Peterson thinks that would be the absolute worst-case scenario.
Corruption, Deep Fakes and Technology
The Kearney executive spoke of an erosion of democratic systems and institutions and, “significant and institutionalized corruption across systems, across the world.” As for technology’s role, Peterson feels that it is shifting economic priorities along with values. He said AI will likely have positive and negative effects in the future.
Looking Ahead
With the average global growth estimations from Peterson’s team coming in at 3.2%, he advises clients and colleagues to look for pockets of economic growth as disparities between high-growth and low-growth economies are going to be “quite large.”
“Every major economy in the world, for very different reasons, has reached a significant inflection point. As companies all over the world think about their future investments, the current geopolitical turmoil is concerning.”
Additional topics Kearney identified in the report is a 4% growth in global electricity demand, the highest annual growth rate since 2007. Also, the impact of “super-empowered individuals” and their potential to “shape politics, culture and the economy”.
CGB’s Distinguished Speakers in International Business Series brings top business minds to Smith to talk about issues impacting the world economy, share their knowledge on these matters and answer students’ questions regarding what’s happening now and what comes next.
The Distinguished Speakers in International Business Series is supported in part by CIBE, a Title VI grant provided by the U.S. Department of Education.
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