Top Five Trends in Global Business Dynamics

Global businesses are facing a highly uncertain environment, as growing geopolitical tensions and trade protectionist policies can accelerate the challenges of supply shortages, a tight labour market and lower productivity. However, investing in advanced technologies can help address these challenges by streamlining operations, improving efficiency, and mitigating labour and resource constraints. Meanwhile, several emerging markets with favourable business conditions represent growth opportunities for companies amid a low growth era.

Euromonitor identifies the top five trends in business dynamics that are shaping the global business landscape today and beyond.

New wave of protectionist policies

Global trade is at a turning point as protectionist policies and rising tariffs reshape supply chains. Many companies had shifted production to Mexico due to US-China trade tensions, but new tariff policies may now push them to relocate to the US to avoid trade barriers.

Meanwhile, Southeast Asia continues to strengthen its position as a key manufacturing hub, offering competitive costs and well-developed infrastructure. Exports from Vietnam, for example, increased by 10% in US dollar terms between 2022 and 2024, indicating the country’s growing integration into the global supply chain. As businesses navigate these changes, automation and efficiency will play a crucial role in ensuring long-term competitiveness.

Shifting labour markets

Labour shortages and skills mismatches are hindering innovation, particularly in STEM fields, with demand outpacing supply in developed economies. An ageing workforce and changing employee preferences, like remote work, exacerbate the issue. While remote work is popular among employees, businesses see it as a productivity challenge, leading firms like JP Morgan, Amazon, and Boeing to mandate office attendance. Rising wages in low-cost regions add pressure, prompting companies to invest in automation and streamline processes.

To address these challenges, businesses must adapt by redesigning workforces, investing in automation, AI, and STEM education partnerships to bridge skills gaps.

Innovation investments

Technology is becoming the foundation of economic growth as governments and businesses increase investments in AI, semiconductors and advanced computing.

The US and China dominate global R&D investment, accounting for 39% and 19%, respectively, of total expenditure in 2024

^{Source: Euromonitor International}

Expenditure on R&D infrastructure is primarily done by businesses, with companies building smarter infrastructure and data centres to support digital transformation. Those that prioritise innovation will gain long-term advantages, while those that hesitate may struggle to keep up in an increasingly technology-driven business environment.

Emerging markets’ competitive leap

As developed economies slow down, emerging markets are taking centre stage in global growth. Asian countries like India, Vietnam, and Indonesia are attracting investments with their expanding industries and skilled workforces.

Manufacturing and technology companies are shifting operations to these regions, creating new business opportunities. The demand for high-tech products and infrastructure is rising, making these economies increasingly important. Companies that recognise the potential of these markets will be well positioned for future success.

Tech revolution

Technology is reshaping the way businesses operate by increasing efficiency and driving innovation.

Nearly 40% of consumers identified AI technology as having the most significant impact on their businesses

^{Source: Euromonitor’s Voice of the Industry Survey 2024}

AI, along with automation and the Internet of Things (IoT), is revolutionising manufacturing and logistics. These technologies are streamlining operations, improving productivity, and optimising resource allocation, which helps businesses remain competitive amid rising labour costs.

As these technologies advance, automation and AI adoption will continue to accelerate, especially in developed markets. Companies that invest early in AI and automation will secure a competitive edge, benefiting from cost efficiency, innovation, and operational resilience in an increasingly complex global market.

Uncover more about the top five trends in business dynamics in our full report, Top Five Trends in Business Dynamics