The global economic outlook is deteriorating, amid commodity and energy shocks and renewed prospects of sustained geoeconomic fragmentation.
At the same time, a series of long-term transformations, from rapid advances in AI and intensifying geostrategic competition to record debt levels and demographic shifts, are reshaping growth prospects in the new economy. Growing social polarization and the risk of deepening inequalities are further complicating this landscape, alongside shifting social and environmental priorities.
Together, these forces present a new set of interconnected growth dilemmas. Drawing on two years of dialogue and views from over 11,000 business leaders globally, the Forum’s report Growth in the New Economy: Towards a Blueprint distils key dilemmas and “no-regret” moves shaping growth strategies. Leaders must balance short-term resilience with long-term transformation, while ensuring that growth in the new economy creates opportunities for all.
We asked a select group of leaders what they see as the most pressing dilemmas today, and how governments and businesses are responding.
“There are essentially four interrelated problems: a major tech revolution that is occurring at extraordinary speed with very uncertain consequences, for good and bad; steady climate degradation which is fuelling migration and conflict; soaring global debt without any obvious exit strategy since growth in most mature, debt-laden countries is very weak; and profound geopolitical dislocation as the post-World War Two structures break down but new ones have yet to emerge. To put it bluntly, while (possibly erroneously) quoting the philosopher Antonio Gramsci: “The old world is dying and the new world struggles to be born; now is the time of monsters.”
“So how should business and government leaders respond? Firstly by recognizing that the post-war assumptions that shaped their careers about the value of globalization and capitalism and international collaboration are no longer dominant. Second, we need to recognize that we are in an era of geoeconomics where economic policymaking is increasingly a tool of power politics, not the other way round. Third, middle countries, particularly those of a liberal bent, need to forge alliances with like-minded countries. Fourth, countries and companies need to hedge their bets by building as much resilience as possible into their supply chains and diversifying markets, if they can.
“Fifth, we all need to remember that history moves through pendulum swings (to cite another great thinker, this time Friedrich Hegel), so this current era of geoeconomics will not last forever. Geopolitical monsters are afoot, but tech innovation is equally important now. Let us hope the latter overwhelms the former, for good - not bad.”
“The central dilemma facing governments and businesses today is maintaining economic growth while building resilience against mounting geopolitical and supply chain risks. The traditional trade-off between openness and security has become acute.
“The UAE has navigated this by pursuing strategic diversification. Rather than fragmentation, we've deepened partnerships with committed allies while expanding alternative pathways. Our 35 Comprehensive Economic Partnership Agreements exemplify this approach – broadening our economic base without compromising core relationships.
“Recent regional tensions tested this model. The UAE maintains strong fundamentals in terms of non-oil GDP and foreign investment flows, and our AA credit rating has held firm. This resilience reflects deliberate infrastructure investments – from alternative trade corridors to expanded maritime capabilities.
“The key insight is moving beyond binary choices. Successful economies aren't choosing between global integration and national security – they're building systems that strengthen through stress rather than weaken through exposure.
“For businesses, this means diversifying partnerships and supply chains strategically, not frantically. For governments, it requires investing in adaptive infrastructure that serves both growth and resilience objectives. The future belongs to economies that can remain open while staying strong.”
“The central dilemma today is not simply how to generate growth, but how to finance sustainable and inclusive growth under tightening global financial conditions.
For many developing countries, the most binding constraint is debt. Rising interest rates and limited access to affordable finance mean that governments are increasingly forced to choose between servicing debt and investing in development priorities—including climate action, infrastructure, and human capital. This is neither sustainable nor equitable.
A second dilemma is the tension between short-term stabilization and long-term transformation. Policymakers and businesses must respond to immediate shocks, while still investing in green and digital transitions that underpin future competitiveness.
Third, there is a growing mismatch between global ambition and national capacity, particularly as countries are expected to deliver on development and climate goals despite constrained fiscal space.
What is needed now is decisive action. We must implement, without delay, the 11 recommendations of the UN Expert Group on Debt, including faster and fairer restructuring, expanded concessional finance, and debt-for-climate instruments. Equally important is the operationalization of a Borrowers’ Club to strengthen coordination and voice for developing countries.
The priority is clear: restore fiscal space and unlock investment for sustainable growth in the Global South.”
“In a context marked by uncertainty and instability, resilience has become the defining condition for sustainable growth. Businesses must remain competitive while navigating rapid technological disruption and geopolitical volatility, while staying prepared to respond quickly to sudden shifts.
“In this environment, resilience is not only built through strategy and technology, but through people. As roles evolve and new capabilities emerge, investing in reskilling and upskilling becomes critical. Future-proofing talent enables organizations to adapt, innovate and respond to uncertainty with confidence.
“Yet this effort cannot be confined to organizations alone. Building resilient economies requires a broader, collective commitment to equipping people with the skills to thrive in a changing world. In Portugal, initiatives such as PRO_MOV and the New Career Network illustrate how cross-sector collaboration can support reskilling, enable career transitions and expand access to opportunities in the new economy.
“This points to a broader reality: long-term sustainable growth will depend on our collective ability to invest in people and create more inclusive pathways to opportunity.
“Ultimately, growth will favour those who build resilience at every level; in their strategies, their energy choices and, above all, their people. Because the greatest risk today is not disruption, it is standing still.”
“Governments and businesses are wrestling with twin dilemmas: how to deliver growth in an era when disruption has become the norm, and how to do so while political, technological, and energy constraints are increasingly outside their direct control. Geopolitics, fiscal constraints, technological change, and energy resilience are no longer background conditions; they are now the main factors affecting competitiveness, investment, and social cohesion.
“AI presents an additional layer to this challenge. Governments and businesses want productivity, growth, and innovation. Workers fear dislocation and inequality. Balancing rapid AI deployment and productivity gains with thoughtful reskilling, safety nets, and new job creation is now central to maintaining both economic momentum and social license.
“In professional services, disruption is the context of nearly every client conversation. We see the best companies – across sectors – treating disruption as a catalyst to rethink business models, rebalance global footprints, and hard‑wire continuous adaptation into operations, organizational design, and customer relationships. They are accelerating AI adoption while redesigning work, investing in cost efficiencies, and shifting from ‘just in time’ to ‘just in case’ to turn volatility in trade, technology, and policy into a source of enduring competitive advantage.”
Find out more about the World Economic Forum's Future of Growth initiative here.
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