The year 2025 will be shaped by new geopolitical, economic, and demographic developments, according to the EY-Parthenon report 2025 Geostrategic Outlook.

The report examined the ten most important geostrategic developments likely to impact organisations worldwide, regardless of industry or geographic location.

The findings, presented by the Geostrategic Business Group at EY-Parthenon, are categorised into three key themes.

These are political transitions, economic competition and self-sufficiency, and geopolitical rivalries.

One of the foremost concerns highlighted is the rise of populism. The report predicts that populist movements will encourage protectionist policies, limit immigration, and place increased pressure on environmental policies.

Additionally, the so-called “tax puzzle” is expected to emerge, with new governments exploring strategies to reduce national debt, including potential increases in corporate, capital, and high-income taxes.

The report also highlighted demographic divides as a critical issue. The interaction between ageing populations, younger generations, and migration is expected to influence local, regional, and global political balances, creating further challenges for policymakers.

The report also pointed out that governments are anticipated to accelerate efforts to reduce economic risks and dependencies, leading to more complex relationships between states and businesses.

In this environment, the report continued, the growing strategic importance of digital technology will likely prompt an increase in policies and regulations designed to control the digital realm.

Climate change also emerges as a key area of economic competition. The report noted that policies aimed at tackling climate change will be driven by competition across three crucial factors: the economy, geopolitics, and energy prices.

On the geopolitical front, EY-Parthenon forecasts new energy balances as governments continue to shift energy policies, which will have uncertain effects on the speed of global energy transitions.

Meanwhile, emerging markets will face increasing pressure to strengthen their influence on the global political and economic system, leading to a more complex global environment.

The report also warns of potential conflicts, both within countries and between states, which could escalate into new wars in the physical world or in cyberspace.

The space race is set to intensify, with more nations becoming involved in technological competition and vying for resources in space.

“After a year marked by significant political developments and with leadership changes expected in the US, 2025 is likely to confirm that instability is the new norm”, said George Papadimitriou, EY Greece CEO.

“In a hyper-connected world, where no one is untouched, businesses must integrate geostrategic analysis into their strategy to successfully navigate, enhance resilience, and create long-term value,” he added.

The outlook underscores the need for organisations to adapt to the increasingly interconnected and unpredictable global environment in order to stay ahead.