Major Global Themes to Watch in 2025

As 2024 draws to a close, the year 2025 is set to be defined by a number of key global themes. 

The US tends to focus on transactional relationships over alliances 

The recently held 2024 US presidential election is bound to be impactful in many ways, given Donald Trump's decisive victory with a clear mandate. His “America First” strategy and transaction-based approach to U.S. foreign policy are sure to shake up relations with existing U.S. alliances. This could lead to major shifts in international dynamics, with significant implications for the economy, security and stability of the international order [Geopolitical and economic implications of US transactional foreign policy]. 

Newly elected Western officials face painful economic choices

In 2024, almost 2 billion people - more than half of the world's population - voted in historic national elections across 70 countries. As a rule, the fate of many incumbent political parties proved disastrous: some were ousted (as in America and the UK), while others were forced to form coalitions (as in Germany and India) and still others were pressured into cohabitation (as in France and Taiwan). A key driver of this shift has been global post-pandemic inflation, particularly soaring food prices [post-Covid turmoil and inflation sparked the 2024 anti-incumbent movement]. 

Their challenge will be to decide whether to invest in growth initiatives such as green energy to boost the economy while reducing reliance on imported energy sources, or to adopt austerity measures to reduce national deficits, by raising taxes and/or cutting spending. Most of them will also be forced to increase their defense budgets. 

Ongoing instability in conflict zones may lead to geopolitical tensions

The ongoing conflicts in Ukraine, the Middle East and several African countries are having far-reaching implications for global stability, security and economic conditions. 

The confrontation between major powers such as the US, Russia and China could intensify as they seek to assert their influence in conflict zones. This could lead to a more polarized international environment, where nations are forced to choose sides, increasing tensions and the risk of escalation. For example, the U.S. and its allies are likely to reinforce their commitments to Ukraine, while Russia may deepen its relationships with countries that oppose Western influence.

As conflicts drag on, countries are likely to redirect their budgets towards defense spending which may divert resources from social and economic development programs, thereby impacting long-term growth prospects.

Moreover, these conflicts are likely to exacerbate humanitarian issues, leading to increased refugee flows and tensions in neighboring countries and regions.

Disorders prevailing at borders could intensify

The reintroduction of border controls and the tightening of security measures represent multi-faceted challenges. They reflect a range of factors; migratory pressures caused by conflict, economic hardship and climate change; security concerns linked to terrorism and cross-border crime; and political dynamics.

The global movement of people, not just goods, faces increasing friction. In Europe, as individual countries reintroduce border controls to manage influx, the very concept of a borderless Europe and its borderless Schengen system are starting to fray. This fragmentation can lead to a patchwork of policies that complicate travel and trade across the continent.

In the United States, the global movement of people is also subject to growing friction, particularly when it comes to immigration from Mexico and Central America.

The current state of climate change

The energy transition from fossil fuels to renewable and sustainable energy sources currently stands at 10%. Despite the growth of renewable energy sources such as solar, wind and hydroelectric power, the global energy system remains heavily dependent on fossil fuels (oil, coal and natural gas). According to various reports, fossil fuels still account for around 80% of the world's primary energy consumption.  

The transition to a carbon-neutral world promises to improve the situation for all countries. Many of them will be less dependent on fuel imports, which will enable them to make significant savings and protect their economies from swings in hydrocarbon prices. 

Accelerated innovation in clean technologies, whether solar panels, grid storage systems, batteries or electric vehicles, coupled with increased collaborative efforts, will open up new opportunities to combat climate change. 

This transition to clean energy sources is essential not only to combat climate change, but also to spur economic growth in new sectors and strengthen economic resilience in a changing energy landscape. 

The fact that we are only 10% of the way through the energy transition reminds us of the scale and urgency of the challenge ahead. 

Greater personalization of our interactions with AI lies ahead

When ChatGPT was first launched at the end of 2022, it rapidly became a sensation. In just two months, some 100 million users typed “artificial intelligence” into Google, and the spectacular hype sparked investor enthusiasm for all kinds of AI-related projects. However, these investors are banking on the promise of AI use in business. Here again, AI adoption could be faster than past innovations. But that doesn't mean it will happen overnight.

Artificial intelligence (AI) is the biggest bet in corporate history: over $1 trillion has been invested in AI data centers, even though companies are still not sure how to use it and adoption rates are low. Will investors lose their nerve, or is AI about to prove its worth, as “agentic” systems gain in performance?

Agentic AI systems are a subset of AI agents that possess a higher degree of autonomy and decision-making capabilities. They are increasingly integrated into various sectors or applications, e.g. autonomous vehicles, AI-driven personal assistants, advanced robotics. Such systems are capable of operating independently, learning from experience and adapting to changing conditions, all without requiring constant human intervention.

Take, for example, the use of AI chatbots for customer support. While chatbots represent only a fraction of AI investments, they are one of the most widely adopted applications of AI in business - estimates suggest that 50-70% of companies are using them for some aspect of customer engagement and to reduce operating costs. 

The agentic AI chatbot powered by natural language processing (NLP) and machine learning enhances the customer experience by providing hyper-personalized, context-sensitive responses tailored to individual preferences and needs. Its ability to understand and generate human language allows for natural and efficient interactions, boosting customer satisfaction.

As customers increasingly expect instant answers and assistance, the use of chatbots is emerging as a viable option for enhancing customer service while improving operational efficiency in various industries. 

Final thoughts

These are the major global themes that will define the year 2025. We'll be watching with great interest how they play out over the course of 2025. Stay tuned!