Step into a boardroom this year, and the mood is unmistakable: what you once took for granted (global reach, steady supply, reliable partners) has become uncertain. Political friction has turned into a hard cost on your balance sheet, new tariffs land overnight, alliances are redrawn by the hour, and a wayward cargo ship stuck in a single global chokepoint can upend your entire quarter. Now add resource bottlenecks, a world racing toward electrification, and a climate that doesn’t care about your forecasts, and you find yourself in a new reality marked by price volatility, supply chain disruption, regulatory changes, and growing climate risks.
If you’re still treating circularity as a side project, you’re missing the main story. A major battleground in geopolitics and business today is control over materials – not just who digs them up and processes them, but who optimizes resource efficiency and can recover, refine, reuse, and keep them moving through their own systems when the world outside becomes unpredictable.
Over the next few weeks, we will examine this new battleground in a series of five articles on Geopolitics x Circularity.
We’ll be looking at the end of globalization as we previously knew it, the fierce new resource wars, why “cheap” is going extinct, the scramble for tech sovereignty, and the reality that future growth depends on working with limits, not pretending they don’t exist. Each piece connects directly to what you, as a leader, are wrestling with right now. If you want to win in this new game, you’ll need a new playbook.
In our first article, we look at the end of our long-established global trade relationship and what comes after it.
The authors want to thank Simon J Evenett, Professor of Geopolitics and Strategy at IMD, for his feedback and comments about the series.
There was a time, not so long ago, when business was built on a single idea: bigger reach means higher returns. You could source materials in Chile, manufacture in Vietnam, sell in Paris, and never give a thought to borders. The world felt flat and open for business, with a seemingly unconstrained flow of goods, services, investment, talent, and technology supporting this model. Outsourcing and offshoring were recipes for success in many industries.
The COVID-19 pandemic was a wake-up call, as supply chains collapsed overnight and companies struggled to deliver even the most basic promises. In the aftermath, the world hasn’t stabilized; instead, geopolitical conflicts have multiplied, sowing deep distrust between trading partners. Russia’s invasion of Ukraine, escalating tensions in the South China Sea, more deadly conflicts in central Africa, and shifting allegiances in the Middle East have suddenly made global markets appear a lot more fragile. Most of these conflicts have complex roots, but also a shared element: strategic access to natural resources.
At the same time, at home and abroad, a wave of populism and economic nationalism is challenging the very foundations of globalization, turning once-stable trading partners into strategic rivals. Trade wars, most recently reignited by Trump’s latest rounds of tariffs, have turned international commerce into a high-stakes game of chess, with global decision-makers in politics and business now focused on accumulating power and strategically leveraging interdependence, particularly around natural resources and key import/export relationships.
“Digital infrastructure and the free flow of data, once seen as the backbone of globalization, are also fragmenting.”
And the effects don’t stop at factory gates or shipping ports. Their impact goes far beyond procurement or operations. Mergers and acquisitions, cross-border investment, global talent strategies, and even international R&D partnerships now come with new layers of political and regulatory risk. As national interests override global ambitions, leadership teams are having to re-examine where and how they compete, how they allocate capital, and which markets are truly worth the risk.
But it’s not just the movement of goods and materials that’s being disrupted. Digital infrastructure and the free flow of data, once seen as the backbone of globalization, are also fragmenting.
Today, a growing patchwork of data localization laws, cybersecurity requirements, and competing technology standards is forcing companies to segment their digital operations by region. Several sovereign clouds – cloud computing infrastructures that prioritize data security, privacy, and control – are about to be launched. The result is a more divided digital landscape, sometimes called the “splinternet,” where US, Chinese, and European ecosystems are diverging, and global cloud or software solutions must increasingly be tailored to local rules.
For business leaders, this means that information, intellectual property, and digital services, formerly the ultimate borderless assets, are now subject to the same types of volatility, compliance headaches, and strategic recalculations as physical supply chains.
In this new context, circularity can provide an answer. In a world where supply chains, capital flows, talent, and even digital operations are being disrupted, circular business strategies offer a compelling path forward. By focusing on recovering, refining, reusing, and remanufacturing resources locally, and by creating new business models that are less dependent on far-flung networks, companies can secure critical inputs, minimize risk, and regain control across multiple dimensions of their business. Building and scaling new ecosystems is becoming a critical skill for both political leaders and business leaders.
For businesses, strengthening resilience and profitability across today’s fragmented, globally distributed value chains is anything but simple.
Political leaders have already begun putting circularity at the center of new policy agendas. The message is clear: circular strategies will shape future competitiveness. The European Union, for example, has recognized the need to de-risk more rapidly from toxic dependencies, especially those tied to economic coercion and defense systems. With its high per capita resource consumption, improving efficiency and circularity in the single market is now a top policy priority for Europe’s economic security. China, meanwhile, has embedded circular strategies in its five-year planning cycles to boost resource utilization and industrial recycling capacity – a natural extension of its drive to control global supply chains for primary critical minerals.
For businesses, strengthening resilience and profitability across today’s fragmented, globally distributed value chains is anything but simple. Building and scaling multiple circular business models is now essential. Apple, for example, works with suppliers in more than 40 countries to produce the iPhone and follows multiple circular strategies to strengthen its business model. Increasing recycled content, responsible sourcing, and establishing more circular supply chains for priority materials are deliberate choices to reduce risk. The company’s rapidly growing refurbishment program also allows it to sell phones decoupled from new production or supply chain disruptions. This not only opens new revenue streams with new customers but also deepens loyalty through a trade-in mechanism for existing users.
The partnership between On and ABB in Zurich gives a glimpse of this future.
The borderless model of yesterday collides with today’s urgent need for local resilience and resource security. The result? Next to practices that optimize supply chains based on trust and allyship (i.e., friendshoring), we are seeing the rapid rise of regional circularity clusters and new business ecosystems – local ecosystems where production, innovation, and recycling all happen close to home.
The partnership between On and ABB in Zurich gives a glimpse of this future. Their LightSpray™ technology automates the creation of high-performance running shoes on demand, right in the heart of Switzerland. Visit On Labs Zurich, and you’ll witness robots crafting the world’s lightest shoe upper in under three minutes, a feat that slashes shipping, shortens supply chains, and closes the loop locally.
As globalization’s certainties fade, business leaders face a new imperative: build resilience, innovate locally, and embrace circularity as a strategic shield in an increasingly divided world. For boards and executive teams, circularity is no longer just a sustainability goal; it’s a core strategy for securing resources, minimizing risk, and strengthening the foundations of long-term value creation.
Up next in our series, we will look at how the scramble for critical inputs is fueling a new era of resource wars and what it means for your business.
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