GED blog post series on globalization scenarios

The global economy is experiencing a period of rapid upheaval. Technological advances and growing rivalries are tugging at the world’s power structures as major economic players engage in a geostrategic competition. The United States, China, Europe, and other ambitious actors must align their economies to reflect the emerging realities. The Covid-19 pandemic, moreover, is giving this development both a unique dynamic and an indefinite outcome. What the world order will eventually look like remains completely uncertain.

Against this background, the Bertelsmann Stiftung, in cooperation with the Fraunhofer Institute for Systems and Innovation Research (ISI), the Federation of German Industries (Bundesverband der Deutschen Industrie, BDI), and representatives from business and politics developed five scenarios on what the future of globalization might look like. In the coming weeks, we will dedicate a blog post to each of them, focusing on their economic aspects and implications for European and German businesses. In the final post, we take a closer look at the implications for policymakers in the EU and Germany. The full study on Globalization Scenarios, including their complete versions and details on the methodology, is available here.

globalization study

The scenarios are an invitation to think strategically about what implications the various scenarios could mean for the future of globalization, German and European companies, as well as for politics in Europe.

Conclusion: 4 policy implications drawn from our 5 globalization scenarios

First of all, it is important to remind our readers that scenarios are not forecasts. They serve as thought experiments meant to facilitate quantitatively sound discussions of long-term options and can also be used as strategy development tools.

As the scenarios discussed in the previous five blogposts and the corresponding study show, the geopolitical and geoeconomic changes that could well shape globalization in coming years are of enormous relevance for European and German companies.

The global political situation is increasingly determined by the rivalry between the US and China, and companies do not want to become pawns in the US-Chinese power struggle. Yet they have to deal with very different framework conditions in these two important markets.

While the United States’ legal system creates a very reliable market there for European companies, this is not the case for China, where they are often faced with a lack of legal certainty and discrimination in the form of significant restrictions on market access, forced technology transfers or unfair subsidies.

Companies also fear becoming overdependent on the Chinese market and have started making globally networked supply chains more resilient and diversified. However, how individual companies deal with these preconditions in different scenarios can vary widely, and possible coping strategies also always depend on the political and regulatory environment. This brings us to the question of what political players could do to shape these framework conditions in the future.

Even though the workshops and interviews with business representatives on which our study is based did not directly address this aspect, certain indications were given in the process about what steps the companies feel policymakers could take to prevent the worst of the scenarios from becoming a reality. From these indications, we can draw a set of four policy implications.

1. Desire for a stronger EU

Most frequently, the companies said they want the EU to be united and capable of taking action, of being strong to assert itself and the interests of the European economy on a global scale. They feel that that is the only way to prevent the world from sliding into permanent crisis. Many companies view the EU’s decision-making processes as too slow and cumbersome.

They believe that more national sovereignty must be ceded to the EU, and efforts must be made to prevent other member states from exiting the Union. Not only is greater unity important to the companies, so is giving European politics a more strategic orientation, something that would require a general debate on how the EU is positioned. The goal must be to make decisions more quickly and develop more clout beyond Europe.

The companies interviewed agree: Europe’s biggest trump card is its single market. It is the world’s largest economic area and should be expanded further. Various policy fields were mentioned several times, even if there were different ideas on how they should be shaped.

One clearly articulated desire was that the EU focus on essential policy areas. In addition to the Green Deal, the most important point for the companies is the focus of the EU on future technologies. Europe must remain technologically attractive and must pave the way for research, development, and value creation within the EU.

2. Regulatory clarity and industrial policy goals

Many companies, especially those in the Mittelstand, view traditional regulatory principles, such as private property and competition, as crucial for strengthening Europe’s position in the world. They feel that the EU must become more robust in terms of its economic policy, for example, by reducing debt levels and strengthening economic freedoms.

They also believe that the EU’s rules should be more actively enforced through a strong European regime for promoting competition, for example, in the area of digitalization.

In contrast, other companies see government-led industrial policy as an option for strengthening the EU. The wish list here includes industrial policy guidelines and goals, along with a greater commitment of government funds to support transformation processes and promote start-ups.

3. Ambitious trade policy committed to openness and free trade

Another area of central importance is trade policy. Many companies are active internationally, which means their very existence depends on open markets and free trade. Many firms see free trade agreements as crucial to their future success. Multilateral frameworks organized and controlled by an empowered WTO are especially important for both Mittelstand and DAX companies.

The companies are unanimously in favor of maintaining a rules-based system of global trade. In particular, smaller, internationally active enterprises stress the importance of having a reliable regulatory framework for their economic planning. Robust multilateralism, they say, expedites their involvement in different markets since it makes it easier to resolve trade disputes.

4. Expanding transatlantic ties

Many companies hope that Europe will succeed in preserving its political leeway in light of the confrontation between the US and China, thereby maintaining its industrial standards. They view peace and security based on a strong transatlantic partnership as the basis for successful business operations.

Yet they also feel only an empowered EU will be able to deepen the transatlantic partnership so that Europe can shape and benefit from it. Climate and digital policy will gain in importance, they say and have already become essential policy fields in many industries.


The scenarios merely suggest events that might occur; they do not provide definitive predictions of the future. They describe which happenings are conceivable and which are probable and illustrate how policymakers and businesses could potentially respond under the various conditions.

Read more scenarios:

Scenario I: Cold Peace – Status quo

Scenario II: Multiple Blocs

Scenario III: Permanent Crisis

Scenario IV: The G2

Scenario V: Reformed Multilateralism