Balancing Dependence: The Quest for Autonomy and the Rise of Corporate Geoeconomics

Abstract

AbstractThe acceleration of great-power competition is leading most major powers to become increasingly concerned about the security risks that economic interdependence poses for state autonomy. This tendency can be seen in the EU’s efforts to develop its ‘open strategic autonomy’, the United States’ ‘reshoring’ of supply chains and technological ‘decoupling’, as well as China’s ‘Made in China’- strategy. In order to make sense of these transformations, this chapter introduces the concept of ‘balancing dependence’, by which we refer to state policies that seek to reduce economic dependencies on foreign actors, both public and private. The chapter describes how such geoeconomic balancing by major economies triggers a reaction by other economies in such a way that challenges the largely market-oriented rationale of the (neo)liberal order prevailing over the course of the last three decades. Yet, in an interdependent global economy, it is expected that companies will try to influence the impact of governments’ actions over their businesses, either to discourage geoeconomic balancing or to benefit from it. Thus, the chapter also puts forward the concept of ‘corporate geoeconomics’, which describes how firms are trying to preserve a measure of autonomy in an economic environment marked by increased state (geoeconomic) intervention.