Great powers are reshaping the world. While America withdraws under the 3rd American decline, no power vacuum occurs though, as other nations are eagerly filling the gap, among them China and Russia.
Why it matters: Global power has become fragile. The American profit logic, also referred to as neoliberalism or globalization, is challenged by another system alternative - the logic of economic rent. Rent income does not build on competition in free markets, but on control over relevant resources.
What’s going on: While libertarian nations made profit from ever greater competitiveness, fueled by digitization, other countries made their income from executing control over meaningful resources. Oil, gas, marihuana, diamonds, water, harbors, roads, railway networks – all these are resources connected to land. Land resources require security, hence control – both political and military control. Authors Dr. Heiko Borchert and Theodore Karasik refer to this as Flow Control. It is almost natural that nations building on control are authoritarian regimes.
Be smart: Flow control is testing which system alternative will succeed in the 21st century.
Flow control is relevant for enterprises, as their supply chains will come under stress. Nations, which are in control of relevant resources, will reshape regulation, standards, partnerships and access to supply. Digital technologies will help gaining control, mainly as civil applications such as drones but also when being applied to execute political control, as the Chinese social credit system demonstrates.