As we look back all through 2024, it is evident that geopolitical competition and regulatory shifts are poised to reshape the global landscape. The ongoing technological advancements in artificial intelligence (AI) and the increasing prominence of the oceans will be two of the major drivers of this evolution. 

According to the EY Geostrategic Business Group’s 2024 Geostrategic Outlook, the world is entering a period of heightened volatility, and many of the themes that shaped 2023 will persist into the coming year. The global geopolitical environment is shifting dramatically, with new challenges emerging as nations navigate an increasingly complex international order.

Looking Back: 2023 and Its Geopolitical Landscape

Reflecting on the past year, the geopolitical landscape unfolded largely as expected, with key developments aligning with the predictions outlined in the 2023 Geostrategic Outlook. The year was marked by persistent geopolitical tensions, particularly in areas such as the Middle East, which became a focal point in the final quarter of 2023. This was an area not initially anticipated to experience significant disruption, yet it became one of the key hotbeds of instability.

The overarching theme of "stabilized volatility" – defined by ongoing government interventions in economies and heightened tensions between global powers – remained relevant throughout 2023. Another prominent theme from 2023 was the rise of "policy trade-offs" as governments grappled with complex decisions in areas like energy security and climate policy. The COP28 conference in the UAE was a major moment for global climate discussions, but economic concerns such as inflation and recession also played a significant role in shaping policy decisions. Meanwhile, the rapid emergence of generative AI exceeded expectations, pushing AI regulation to the top of many governments’ agendas.

Navigating the Complexities of a Multipolar World

Looking ahead, 2024 will be defined by multipolarity – a geopolitical environment where multiple global powers, including the U.S., China, and the European Union, will shape the operating environment. This increasingly complex global system will also see the rise of "geopolitical swing states," such as India, Saudi Arabia, Turkey, South Africa, and Brazil. These nations, which have not aligned themselves with any single bloc, will have a greater influence on global affairs, driving a shift in international relations and economic policies.

At the same time, smaller nations and non-state actors will continue to assert their influence, challenging traditional power structures and attempting to reshape the geopolitical landscape. The war in Ukraine, along with rising tensions in several other regions, signals that these conflicts could be just the beginning of a more fragmented world order.

De-Risking Global Supply Chains: A Key Priority

A key lesson from recent geopolitical events – including the COVID-19 pandemic and the war in Ukraine – is the vulnerability of global supply chains. The reliance on just-in-time production and the concentration of key industries in a few markets have exposed significant risks to national and economic security. As a result, governments are prioritizing the de-risking of global supply chains by promoting greater domestic production of critical goods.

In 2024, we will see further alignment of industrial policy with foreign and national security priorities. This means that economic policy will increasingly be influenced by geopolitical competition. As countries seek to secure their supply chains and reduce dependencies, businesses will need to reassess their strategies and adapt to a more fragmented global marketplace.

The Geopolitics of AI: Regulation and Innovation

Artificial intelligence will continue to be a central focus of geopolitical competition in 2024. As governments race to regulate AI and mitigate sociopolitical risks, they will also strive to foster domestic innovation in AI technologies to maintain a competitive edge. This dual approach – regulating while innovating – will be particularly evident in the U.S.-China rivalry, where AI has become a critical factor in both economic and security considerations.

AI regulation will be a driving force in shaping the geopolitical dynamics of the year ahead, with countries seeking to establish regulatory frameworks that ensure ethical AI development while simultaneously securing technological supremacy. This ongoing competition will contribute to the creation of distinct geopolitical blocs, with AI at the heart of the rivalry between global powers.

The Oceans Take Center Stage

2024 will also see a shift in the geopolitics surrounding the oceans. As the planet’s largest ecosystem and a critical resource for global trade and national security, the oceans are becoming increasingly important in geopolitical calculations. With 90% of global goods trade shipped via maritime routes, many of the world’s busiest shipping corridors are at risk of disruption due to geopolitical tensions.

The Global Elections Supercycle

Another defining feature of 2024 will be the "global elections supercycle." Voters in countries that collectively account for over half of the world’s population and economic output will head to the polls. These elections – particularly in major economies like the U.S. and EU – are expected to have profound implications for international relations and economic policy. The results of these elections could shape the global business environment for years to come, generating policy uncertainty and creating new opportunities and risks for businesses operating in these regions.

Preparing for Geopolitical Surprises

The geopolitical environment in 2024 is expected to be volatile and unpredictable. The rise of multipolarity, the de-risking of supply chains, the race for AI supremacy, and the growing importance of ocean geopolitics all point to a year of significant change. Governments will be forced to make difficult policy trade-offs, balancing economic priorities with national security concerns. As companies and organizations prepare for this new world, they must be ready to adapt to the rapidly changing geopolitical landscape, anticipating potential disruptions and taking proactive steps to navigate this complex and shifting environment.

A Year of Opportunities and Risks

As we enter 2024, the world’s geopolitical landscape is becoming more fragmented and unpredictable. With AI, the oceans, and a host of other factors driving change, businesses will need to rethink their strategies and adapt to a rapidly evolving environment. By focusing on key themes such as multipolarity, de-risking, and geopolitical competition, companies can position themselves for success in an increasingly complex world.