Business, Markets and Governance in an Era of Uncertainty

We live in an era of prolonged uncertainty in highly complex contexts with many unknowns on top of known calculable risks. This reflects Knightian uncertainty, where unique events leave us unsure about future outcomes. The uncertainty of the new century was compounded by events such as 9/11, financial crises and the COVID-19 pandemic. It has eroded our social capital through increased isolation and a general decline in trust. Conspiracies proliferate, enhanced by the mobilizing potential of social media, where populism has gained a stronger political foothold. A previously bipolar world is moving toward one of unbalanced multipolarity among rivaling powers. Policies are shifting from neoliberal views to recognize the need for more explicit government roles, implementing longer-term industrial policies, and reconsidering prior rationales behind international trade and the global economic order. This is partially induced by tepid growth rates, national security concerns tied to the rise of China, and the need for political intervention to reach net-zero goals. The state is returning to engineering optimal solutions, replacing the liberal international order with realism by recognizing the prerogatives of great and middle powers. This is accompanied by authoritarian nationalism across much of the West as well as East Asia and South America. We should not expect these developments to reduce the level of uncertainty in the future ahead of us.