The End of the Globalisation Era
For much of the period following the end of the Cold War, globalisation was treated less as a policy choice than as an economic inevitability. Trade liberalisation, cross-border capital flows, and globally integrated supply chains were assumed to be self-reinforcing and, ultimately, irreversible. The role of governments was largely to facilitate integration and mitigate its social consequences.
That assumption no longer holds.
The global economic system is not undergoing a cyclical downturn but a structural transition. What is ending is not cross-border exchange itself, but the particular form of globalisation that prioritised efficiency, scale, and openness over resilience, security, and political sustainability.
From Integration to Exposure
The defining characteristic of the globalisation era was the extent to which production and logistics were optimised for cost minimisation. Supply chains became longer, leaner, and more geographically concentrated. National redundancy was treated as inefficiency; strategic autonomy as protectionism.
Recent shocks have exposed the limits of this model. The pandemic disrupted access to critical goods. Energy markets proved vulnerable to geopolitical leverage. Shortages in advanced semiconductors demonstrated the fragility of highly specialised production networks.
At the same time, intensifying strategic competition—most notably between the United States and China—has altered how economic interdependence is perceived. Trade and investment are no longer viewed as neutral channels of mutual benefit, but as potential vectors of dependency and influence.
Institutions such as the World Trade Organization, designed for a world of converging interests, have struggled to adapt to this shift.
The Re-emergence of the Strategic State
The response has been a recalibration of economic policy rather than a retreat from global engagement. Governments are intervening more directly in areas deemed critical to national security and long-term competitiveness: energy, advanced manufacturing, digital infrastructure, and artificial intelligence.
Industrial policy—long regarded in advanced economies as inefficient or distortionary—has returned as a central tool of economic governance. Resilience, diversification, and trusted supply relationships now outweigh marginal gains from global cost arbitrage.
This does not amount to deglobalisation. Trade volumes remain high, and cross-border flows persist. But they are increasingly shaped by political alignment, regulatory compatibility, and strategic considerations.
A More Fragmented Global Order
The emerging system is best described as selective globalisation within a multipolar framework. Economic integration is deepening within regions and among politically aligned partners, while becoming more constrained across geopolitical fault lines.
This fragmentation is unlikely to be temporary. The technologies driving future growth—semiconductors, clean energy systems, data infrastructure—are capital-intensive, strategically sensitive, and closely tied to state capacity. Their development will not be left entirely to global markets.
As a result, the world economy is likely to become less efficient in aggregate, but more resilient at the national and bloc level. The distributional consequences will vary considerably, favouring countries with strong institutions, fiscal capacity, and technological depth.
The End of an Assumption
The most consequential change is conceptual rather than operational. The globalisation era rested on the belief that economic integration would ultimately override political rivalry, and that markets would discipline states more effectively than states would shape markets.
That belief has been revised.
The emerging order accepts that economic openness must coexist with strategic constraint, and that integration is a choice rather than a destiny. Governments are no longer attempting to insulate economic policy from geopolitics; they are explicitly incorporating it.
This marks the end of the globalisation era as it was understood in the late 20th century. What replaces it will be more complex, more fragmented, and more overtly political—but also more aligned with the realities of power and risk in the contemporary world.