Accelerating disruption is the defining feature of our times, yet we struggle to deal with the scale and pace of change that’s occurring. Consider the race to dominate generative artificial intelligence (AI). It has pumped up the so-called magnificent seven US tech stocks. They now account for a third of the S&P 500 by market value, up from 20% when ChatGPT was released two years ago while new restrictions on AI chip exports to all but a small number of close US allies will challenge the ability of many companies and countries to keep pace.
This environment of transformative change across multiple dimensions — from rising geopolitical tensions and economic nationalism to technological acceleration amid aging if not shrinking labor forces — requires businesses and governments to shift their mindset. Leaders need to accelerate their decision-making to anticipate challenges and turn disruption into opportunity.
State of Our World 2025, a new report presented by the Oliver Wyman Forum at the World Economic Forum in Davos, identifies nine of the most important global trends or issues impacting business and society today, and how leaders should respond to them. They range from the ascendance of geopolitical factors like tariffs and restrictions on AI chip exports to striking the right balance on regulation for promoting sustainable growth; from unlocking the value of AI to embracing a new mindset about meeting customer needs; and from the importance of a truth-based culture in today’s post-fact world to reinventing the CEO role for an era of ever faster disruption.
Many of these trends overlap with and reinforce each other. Reaping the benefits of AI, for instance, will require more-agile workforce strategies focused on rapidly evolving skills rather than experience and hierarchy, while those benefits in turn can help companies and societies deal with worker shortages as populations decline in more parts of the world.
Adopting a geopolitics-first mindset
The influence of politics on markets looks more and more like a permanent feature of our world, and a stark contrast to the free-trade ethos that reigned during the peak globalization years at the start of this century. Tariffs, export controls, and industrial policies have tripled in the past five years, and the United States, China, and the European Union have accounted for 55% of all commerce-distorting interventions since 2009.
The tectonic plates of the geopolitical world have shifted. Economic power is more widely dispersed than ever today between the United States and its friends and allies, challengers led by China and Russia, and multi-aligned countries such as India, Indonesia, and Brazil. But the world’s AI and defense capabilities are concentrated in a small set of countries and companies. In this environment, CEOs need to make geopolitics a first consideration rather than an afterthought, and anticipate and shape public-private cooperation in a world where foreign policy is likely to become more transactional.
Unlocking AI’s Value
Consumers and companies have adopted generative AI much faster than other recent tech innovations like the internet or cell phones, but the payoff is proving slow to materialize. While 97% of organizations have used AI as a strategic lever for transformation, only 17% say their investments have exceeded expectations, according to an Oliver Wyman survey of 300 global firms.
To drive real success, companies need a strategy to capitalize on the geopolitical, industrial, and organizational dimensions of AI. In the first category, the Oliver Wyman Forum AI Index identifies eight countries as AI leaders by factors including their startup culture and funding, semiconductor and data center capabilities, energy capacity and cost, and government policy. Companies will need to navigate emerging blocs of influence in a world where great power competition makes it harder to play all sides.
Businesses should look at early industry experience to decide what value they want to prioritize — efficiency gains or revenue growth. They also need to set a clear transformational strategy. That could be going all in on pursuing enterprise-wide transformation or pursuing more-targeted use cases at a measured pace. The choice should reflect the organization’s capabilities and resources, regulatory environment, and competitive dynamic.
A new CEO model for capitalizing on disruption
Today’s business leaders face a conundrum. They need to make transformative plays to drive growth amid dramatic changes in technology, markets, and politics, yet shorter CEO tenures mean many of them won’t last in the job to see the fruits of their efforts.
That dilemma requires a two-pronged leadership approach. CEOs should pursue efficiency initiatives and routine investments through rolling six-month plans tracked against real-time market signals that allow for course corrections. And for real transformation, leaders should adopt visionary seven-year or longer plans with strategic bets based on their view about trends in technology, competition, regulation, and changing consumer preferences.
Such growth strategies should be rooted in a genuine culture of truth-seeking. That may sound quixotic in a world awash in subjective “truths,” but long-term success requires that organizations invest in mission-critical data, challenge assumptions, ensure that meetings surface any uncomfortable truths, actively identify vulnerabilities, and be ready to rapidly counter disinformation.
What would you call a business that utilizes less than two-thirds of one of its key assets? Short-sighted, to say the least.
The same can be said when it comes to women and the global economy. Women around the world enjoy less than two-thirds of the legal rights available to men, on average, limiting their ability to work, earn equal pay for work of equal value, or start a business, according to the World Bank’s latest Women, Business and the Law (WBL) report. That’s a tragic waste of potential at a time when we need to tap all our resources to revive a sluggish global economy.
Closing the gap in employment rates between men and women over the next decade could double the global growth rate and raise the world’s GDP by more than 20%, according to WBL. So how do we make progress toward gender equality and lift everyone in society?
Female representation matters
Political power has a vital role to play. Greater female representation in legislatures and executive cabinet positions is correlated with improvements in women’s economic rights across regime types and country income levels, according to new research conducted for Representation Matters, a joint initiative of the Oliver Wyman Forum, Women Political Leaders (WPL), and WBL.
Yet progress toward gender equality has slowed recently after decades of gains, and signs of a backlash are evident. Half the world’s people believe men make better leaders than women, according to the United Nations Development Programme, while the Reykjavík Index for Leadership finds that, in G7 and Scandinavian countries, people aged 18 to 34 exhibit more bias against women than older generations.
Women made minimal progress last year in elections covering half the global population, with countries’ average share of women in lower and single houses of parliament increasing by just two-tenths of a percentage point, to 25.9%.
An agenda for change
What’s needed is a fresh approach that pushes for reform across a wide range of power centers, including executive branches of government and the private sector. Advocates should make clear that gender equality is not a zero-sum game, because closing the gender employment gap can drive stronger economic growth and widespread prosperity.
Governments should create and promote policies to tackle gender inequality and ensure that existing equal opportunity laws are enforced and have adequate supporting frameworks. It’s noteworthy that 98 economies tracked by WBL mandate equal pay for work of equal value, yet only 35 have pay-transparency or enforcement measures that can make equal pay for women a reality.
The private sector, meanwhile, can lead by example and be vocal about the importance of women’s leadership and economic opportunity. Business leaders have a vested interest in hiring and promoting more women as part of their overall talent strategy. They know that a diversity of experience and background in senior executive ranks can avoid groupthink and foster innovation.
At the current rate of change, it would take at least 50 years on average for countries to achieve legal gender equality, WBL has estimated. That’s too long to wait.