An era in transition

Great strategic advantage typically goes to those who recognise that the world has changed. Eras come and go, but the difficulty is spotting a transition as it happens. We appear to be at the end of an era now, with once-comfortable assumptions breaking down, although it is too soon to know what will replace them.

Many of those assumptions took shape after the upheaval of 1989 and the subsequent dissolution of the Soviet Union, when the US emerged as the dominant global power. That period proved brief by historical standards, and the post-Soviet settlement is now fracturing. Italian political thinker Antonio Gramsci’s warning about the dangers of transition feels newly relevant. We need not assume that we have entered a “time of monsters”, but the war in Europe shows why this shift cannot be treated lightly.

What follows may be a prolonged period of strategic volatility in which established rules no longer reliably apply. We may already be past peak globalisation: power is shifting towards Asia, competition among major powers is intensifying, and the movement of people, goods and data can increasingly be used as a weapon rather than simply as a source of connection. The US is changing its approach, too. The second Trump administration is tough on European allies, sceptical about Ukraine and intent on competing with China, often viewing international affairs through an economic lens. I believe countries that trade more with China than with the US may wish to avoid choosing sides, but if pressed, economics and geography will likely be hard to ignore.

Technology and resilience

China’s role in the rivalry with the US reflects a changing balance between states. It is the world’s largest manufacturing and trading power, and has the largest armed forces, yet still defines itself as a developing country by reference to per capita income.

Power is not only shifting between states, however. Technological change is giving individuals and companies geopolitical as well as commercial influence. Microsoft and Starlink’s contributions to Ukraine’s defence show how significant that influence has become, even as the pace of change outstrips our ability to adapt institutions and workforces.

We are also seeing changes on the battlefield itself. In Ukraine, drones reach across a front line depopulated to a depth of roughly 25-30 kilometres. Beyond conventional war, nuclear coercion has returned as a geopolitical condition, alongside potentially existential threats in space and cyber. These pressures make resilience a central concern: energy and pharmaceuticals should remain available, networks should retain their integrity, and the logic of “just in time” is giving way to “just in case”.

Three flashpoints

Three crises demand particular attention: the erosion of Europe’s security settlement, the risk of wider war in the Middle East and the danger of miscalculation in the Asia-Pacific.

Europe faces strategic dependencies on China, Russia and the US, and has the challenge of rebuilding hard power while confronting a revisionist Russia. I think there is little reason to expect a quick end to the war in Ukraine and the fighting is highly likely to continue into 2027. President Putin appears to believe that he can absorb the costs of the war and has yet to be persuaded that Europe is determined to stop him. An eventual settlement will require compromise involving Washington, Kyiv and Moscow. In this assessment, Moscow would first need to be persuaded that the costs of continuing will outweigh any gains. Even when the war ends, Europe will have to live alongside Russia and bear more responsibility for its own security.

Conflict in the Middle East remains at the root of instability. Without regional consensus, durable peace is unlikely. Regional powers are reconsidering their relationships as they hedge against what they see as an unreliable US and pursue domestic transformation. The US appears less able to deter Iran through conventional means, while Iran retains leverage through its position on the Strait of Hormuz. Assembling a coalition to address that challenge will be difficult.

The other danger is a war in the Asia-Pacific region. Given its vital role in many of the world’s supply chains, notably technology, a war here would be a global crisis, not merely a regional one, and once begun could develop its own momentum. A disciplined strategic dialogue which allows for disagreement and competition, including in AI, is needed to reduce the risk of a catastrophic mistake.

What to get right

No one can confidently predict the shape of the next era, but the possibility that we are in a pre-war situation should sharpen decisions now. Organisations need to be prepared for disruption, with strategies that are regularly updated, modelled and stress-tested, and the resilience not only to absorb more frequent shocks but to emerge from them competitively.