Growth in the New Economy Towards a Blueprint 2026

No-regret move: seek comparative advantages and diversification Global integration has lifted productivity and living standards worldwide and remains a key tool for harnessing comparative advantages, expanding markets, lowering costs and improving efficiency. No business or economy can rely solely on its own resources – whether human, natural or technological – and expect to sustain long-term growth. Interdependence, when managed well, amplifies opportunity for all. During the late 20th and early 21st century, global economic integration was a key enabler of growth through scale, efficiency and global exchange of ideas, talent and capital. Over the long run, it has led to higher productivity and expanded economic opportunity within and between countries. Dilemma: how to balance global engagement with strengthening domestic capacity In an era of multipolar, strategic competition, new fragilities have emerged from concentrated supply chains and external dependencies.8 Access to critical technologies and raw materials has increasingly been weaponized, while energy and food supplies have been rattled by current conflicts and the prospect of future ones. Persistent and structural imbalances in trade and balance of payments can undermine macroeconomic stability and hinder progress on national and global goals. Meanwhile, there is increasing scrutiny on the impact of global integration on jobs, the localization of economic returns and the interplay between technology and geoeconomics. The distributional consequences of globalization within countries have largely remained unaddressed and are becoming more politically salient, making it harder for governments to sustain broad-based support for international integration. Technological change is adding further complexity. AI, automation and digitalization are reshaping what is tradable and shifting comparative advantages. A broader set of industries might be disrupted by global trade, while manufacturing might be subject to reshoring, potentially upending traditional supply chain strategies and development pathways. In the emerging new economy, business and government are seeking to balance resilience and efficiency, navigating a range between self- reliance and global integration. A combination of global integration and self-reliance will shape how countries engage with the global economy in a more disorderly geoeconomic landscape. Global economic integration prioritizes open flows of goods, services, technology, capital and talent, using diversified markets and partners to expand opportunity and spread risk. Self-reliance, by contrast, focuses on strengthening domestic capacity in critical sectors such as energy, health, food and technology to secure essential inputs and buffer economies against external shocks. Each approach carries advantages and trade-offs. Integration accelerates the circulation of ideas, technology and human capital, expands markets and enhances efficiency, yet integration that results in excessive reliance on concentrated suppliers can heighten vulnerability. Self-reliance can reinforce resilience and strategic autonomy but may raise costs, reduce efficiency and limit access to global knowledge, technology and capital. How countries choose to “de-risk” globalization – including through supply-chain diversification, strategic capacity at home and deeper networks among trusted partners – will shape the next phase of global growth. 2.2 Global cooperation and domestic capacity A combination of global integration and self-reliance will shape how countries engage with the global economy in a more disorderly geoeconomic landscape. 10 Growth in the New Economy: Towards a Blueprint