(More on Mega-trends - 2022 - cont. 4)

4. Geopolitical Shifts

Introduction

The ongoing tensions in the Middle East-Africa, Asia- Pacific, Eastern Europe, etc are challenging countries to maintain peace and stability, and material prosperity. Consequently, there have been record levels of defence spending and increasing collaboration and co-operation across matters of security, technology and defence capability.

Impacts of this megatrend

i) rising investments in defence capabilities

The current level of military spending is the highest for decades, especially for the USA and China.

New security pacts are forming like AUKUS ( Australia, United Kingdom and USA)

ii) increasing collaboration between democratic countries

"...the Ukraine crisis has revealed the extent of cooperation, commitment and shared purpose amongst the world's democratic countries and advanced economies. There has been an unambiguous willingness to act at the national level to uphold international law, respect country borders/sovereignty and protect human rights..."
CSIRO, 2022

This has been shown by trade sanctions against Russia and selected Russians while providing military and humanitarian support to Ukraine in a coordinated manner; more European countries aiming to become members of NATO.

iii) emerging technologies are tilting the strategic defence arena

New technologies are helping the military to attack and/or defend. Some current examples
"...a) high-speed variable trajectory and precision targeting missiles
     b) artificial intelligence and advanced autonomous systems
     c) cyber/information warfare..."
CSIRO, 2022    

iv) changing trade dynamics

The pandemic resulted in global trade contraction with the restrictions on the movement of people, goods and services.

Exporters and importers are
"...looking for ways to reduce risk and diversify over the coming years..."
CSIRO, 2022

Selective use of tariffs and sanctions is restricting trade, eg China introduced tariffs and sanctions against Australian exports of coal, seafood, beef, wine, timber logs and barley.

v) reducing the risk of supply chain disruption

The impacts of the pandemic and selective use of tariffs and sanctions have resulted in supply chain disruptions. Consequently, supply diversification, onshoring and contingency contracting are potential risk mitigation strategies; other strategies include agile manufacturing approaches, use of AI, robotics, etc

vi) future supply chain risks associated with seaborne trade

As much trade travels by the sea and moves through contested waters, like South China Sea, this could result in increased disruption of supply chains. Consequently, there is more emphasis on sovereign capabilities and local supply chains plus diversification

vii) a foreseeable return to global connectivity

The pandemic had a negative impact on global interconnectedness, eg closing of country's borders, restricted travel, etc.

There is an expectation of this returning to pre-Covid levels quickly.

viii) cyber security threats and resilience

An escalating threat of cyber-crime, cyber-terrorism and cyber-warfare; this is expected to continue as the criminals become more sophisticated and more people are working remotely; increasing evidence of targeting critical infrastructure.

ix) uncertainty around future flows of scientific knowledge

Less international collaboration between scientists owing to the pandemic, emerging geopolitical tensions and travel restrictions, ie
"...silos of scientific endeavours in the future could lead to duplicated search efforts and wasted resources..."
CSIRO, 2022