The 56th annual meeting of the World Economic Forum was held under the optimistic theme The Spirit of Dialogue. The serene, snow-capped peaks of the Swiss Alps stood in stark contrast to a global system undergoing profound structural transformation. While 3,000 officials from 130 countries gathered to discuss “planetary boundaries” and “shared prosperity”, private discussions and keynote speeches revealed a more defined perspective.
Policymakers now need to go beyond simply managing cycles; they need to address a significant rupture in the global structure. Outdated trade rules have been replaced by new ones focused on security, sovereignty, and dirigisme.
For the past decade, world leaders have used the term “transition” to allay their fears. They believed the world was merely transforming into a digital, more environmentally sustainable, yet still interconnected version of the 20th century. Davos 2026 has shattered this sense of certainty. Most now agree that we are experiencing a structural rupture, not a cyclical transition.
Canadian Prime Minister Mark Carney offered the most serious assessment of this week: “Let me be frank. We are not experiencing a transition, but a rupture. This rupture requires more than just adaptation. It requires candor about the true state of affairs”.
This “honesty” means recognizing that the rules that have historically governed organizational activity over the past century are no longer as strict as they once were. This rupture marks a definitive departure from the idea of universal cooperation. It forces leaders to stop passively observing and acknowledge a reality characterized by diverse sources of shock and disparate instability.
Despite reports of chaos, global trade has demonstrated an unexpected, almost daring, resilience. The Davos Resilience Paradox posits that as geopolitical challenges intensify, trade doesn't cease; instead, it adapts, opening up new, often more complex, avenues of movement. We are constantly engaged in trade and will continue to do so. “Trade is like water flowing in a river. If an obstacle arises, it will move around it”, noted Kristalina Georgieva, Managing Director of the International Monetary Fund.
This “water” is increasingly flowing through digital and service channels, largely isolated from the challenges associated with physical goods. Trade is accelerating thanks to new bilateral and regional mechanisms. The upcoming EU-Mercosur agreement and the upcoming EU-India agreement, dubbed the “mother of all deals”, demonstrate how trade is opening up innovative avenues for expansion, circumventing traditional international barriers.
The most striking statistic of the year is the 262 percent increase in the scale of intervention in industrial policy since 2019. The significant increase in state dirigisme demonstrates that state intervention has evolved from a measure of last resort to a central component of modern economic policy.
French President Emmanuel Macron declared, “Protectionism is not the same as protection”, thus reflecting the new doctrine. This shift is driven not only by the need for privacy for individuals; it is driven by four strategic imperatives that have become more significant than mere market efficiency: maintaining the stability of basic goods, maintaining the country's status as a leader in advanced technologies, ensuring that trade is consistent with the planet's resource constraints and climate goals, and using public authority to protect domestic labor markets. The private sector faces the challenge of managing the dramatic increase in government intervention while mitigating the negative impacts and complexities associated with such strict government measures.
As the global landscape shifts from unipolarity to multipolarity, the most successful companies are shifting from “reactive risk management”, characterized by asset divestments and market exits, to a proactive approach known as “geopolitical power”. This refers to an organization's ability to leverage geopolitical intelligence to gain strategic business advantages.
At its summit, the World Economic Forum established the Geopolitical Leadership Network, signaling the rise of this role to the C-suite. However, a significant disparity remains: only 20% of companies have a geopolitical position reporting directly to the C-suite. The Forum identifies five key components necessary for developing this “skill”:
The incident surrounding US President Donald Trump’s proposed purchase of Greenland exemplifies an emerging trade strategy that prioritizes security. After European countries rejected the plan, the administration threatened to impose taxes on eight of them. NATO Secretary General Mark Rutte's decisive intervention halted these actions, though the lesson for Davos attendees was clear.
Trade measures are currently being applied not for economic but for strategic purposes, which are often difficult to foresee. The concept of “national security” has become an ambiguous one, linked to economic policy, leading corporate executives to not only monitor market trends but also engage in strategic maneuvering. Events in Greenland serve as a stark reminder that, in the current situation, security is determined solely by the discretion of the sovereign power on any given day.
As the global trade landscape transforms, the old rules no longer apply. The “disruption” is irreversible, but resilience mechanisms are beginning to emerge. New growth strategies include the “trade technology paradox”, characterized by the development of artificial intelligence and digital tools that level the playing field for small and medium-sized enterprises and developing economies.
In modern society, trade extends beyond financial transactions; it encompasses security, sovereignty, and survival. The fundamental advantage in business is no longer simply size, but the speed of adaptation.
* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.
