There is a lot going on in the world right now, to put it lightly. And while international politics used to be something we could just read about in the morning newspaper and put aside, breaking developments in trade policy, immigration, and other issues are increasingly affecting our businesses, jobs, and shopping carts.

Last week, I had the chance to sit down with Kellogg economist Nancy Qian to discuss global trends to watch as 2025 comes to a close. The conversation was a real eye-opener for how geopolitics trickles down to affect our daily lives.

Plus, our 2022 conversation with a newly honored Economics Nobelist.

Global trends, local effects

While it’s always been important for leaders to stay informed about world news, the implications of those events are now hitting close to home for many business leaders.

 ”We’ve been really lucky in being able to just focus on building our businesses and designing our economic strategies mostly without thinking about geopolitics,” says Qian, the James J. O’Connor Professor of Managerial Economics and Decision Sciences. “Well, those days are over. That’s just not true anymore.”

In an episode of The Insightful Leader Live recorded on October 6, Qian dived into what she thinks are the most important trends driving global economics right now. Topics included U.S. tariffs and trade policy, immigration, fertility rates, and the shift from manufacturing to services in rich economies.

A common theme across these concerns is uncertainty, as tariff rates and trade agreements change on an almost daily basis.

“ Businesses may not like high tariffs, but they can deal with it, right? They can formulate strategies,” Qian says. “But one of the problems right now is that things change so much, so fast back and forth. Everyone is sort of frozen, everyone’s pausing because you can’t make policies.”

While some companies, such as Sharpie, have started to move manufacturing back to the United States to avoid import fees, declining fertility rates and more-restrictive immigration policies will make labor in the U.S. and other wealthy countries even more expensive, Qian says.

“ When labor demand goes up, wages go up, the price of labor goes up,” she says. “For the price of labor to come down, we need labor supply to go up. But that’s not what’s happening now because fertility is declining. We’re gonna have fewer workers in the future than we do now, and we’re gonna have fewer younger people relative to older people.”

For business leaders, there are no easy answers except to pay close attention.

“ You need to be able to navigate this, so you just have to spend more time thinking about it, understanding the policies, and, depending on what your business is, think about, what are your strategic advantages and how to organize things,” Qian says. “ We just have to accept that we have to think more about geopolitics now.”

Watch the full conversation at Kellogg Insight.

Creative destruction, the right way

On Monday, the Royal Swedish Academy of Sciences handed out its final Nobel Prizes of the 2025 cycle with the Sveriges Riksbank Prize in Economic Sciences.

The three recipients included Northwestern’s Joel Mokyr, an economist who has studied the history of innovation and economic growth. But three years ago, Kellogg Insight spoke with another of this year’s awardees: French economist Philippe Aghion.

In conversation with Kellogg’s Ben Jones, Aghion explained his theory of “creative destruction”—the idea that innovations displace old technologies. The two researchers discuss how governments can use policy tools such as taxes and education funding to encourage this process and minimize social harm.

“When you think of innovation through this lens, you realize that innovation isn’t simply about being creative,” Jones says. “You have to think about the market and the political institutions that allow this fluid destruction and reallocation.”

The two economists agree that, when managed correctly, creative destruction could provide practical solutions to challenges like climate change and even build a more equitable capitalist future.

“Creative destruction induces social mobility,” Aghion says. “So if you manage to revamp competition policy, you will make the economy more innovative and more inclusive. And that makes me optimistic that we can improve capitalism.”

Read the full discussion at Kellogg Insight.