War by other means: positioning for 2023

War is a mere continuation of policy by other means’, General Carl von Clausewitz

As we end a turbulent 2022, I have been thinking about what firms, investors, and governments should be positioning for in 2023 (and beyond).  This year, together with Mike O’Sullivan (long-time collaborator and Landfall Strategy Group Senior Advisor), we have prepared a paper on key dynamics that will shape the year ahead.

This note sketches out our view on these dynamics.  Get in touch (by reply email or at contact@landfallstrategy.com) if you would like to access the full paper.

2023 is likely to be another volatile year.  This ongoing turbulence reflects not just idiosyncratic shocks, but also a regime change in the global economic and political system. 

After the end of the beginning

Our core thesis is that the global economy is moving onto a ‘war time’ footing, with increasing, broad-spectrum strategic rivalry between the big powers reshaping the global economic and political system.  The key domains for this strategic competition relate to economics, finance, and technology – extending well beyond military competition. 

Increasingly, government policy across multiple areas will be deeply shaped by this strategic competition, from macro policy to industrial policy and the net zero transition.  In turn, economic outcomes, the business environment, and markets, will also be affected.  2022 was the ‘end of the beginning’ for the new regime, and these realities will powerfully shape 2023.  The global economy has been relatively depoliticised – but politics is firmly back.

Previous episodes of regime change have had big impacts on investment returns, profitability, and national outcomes.  New approaches are needed to prosper in this new context.  

We identify five major themes associated with this regime change and their implications for firms, investors, and policymakers: from a changing globalisation model to the return of the state and changed macro policy settings. 

This note is available at: https://davidskilling.substack.com/p/war-by-other-means-positioning-for