After World War II, the United States emerged as a dominant global economic force, promoting technological innovation, open markets, and economic stability. This period reinforced expectations among investors that geopolitical events would generally have limited long-term effects on market performance. However, the role of the United States in global affairs is undergoing a transformation. It is encountering challenges to its technological dominance, particularly from China, which is reshaping geopolitical dynamics. Trade wars, economic sanctions, and export restrictions have intensified competition in critical technological areas such as artificial intelligence and semiconductors. As a result, financial institutions must now regard technology in combination with geopolitical changes as a structural factor influencing long-term market stability, rather than merely temporary disruptions.
Geopolitics and technology are intricately linked, influencing each other through a dynamic and cyclical relationship. Major technological breakthroughs, such as steam power, electricity, and semiconductor technologies, have historically triggered economic transformations, societal shifts, and political realignments, redefining global power structures in the process.
This article explores the interplay between technology and geopolitics, highlighting the cyclical nature of these shifts. It also introduces a structured framework, combining short-term quantitative insights and long-term qualitative judgement, to help financial institutions navigate the growing complexity and uncertainty of today’s technological development, in combination with a changing geopolitical landscape.
in VBA Journaal door Anand Autar and Evelien van Hilten