Resilience and security come at a cost
Can globalisation survive in a world shaped by geopolitical tensions, protectionism and uncertainty? That was the question ENRX put to the panel at its Arendalsuka debate. The answer was yes – but with an important qualification: global trade can no longer be about optimising for the lowest possible cost alone. Going forward, companies will have to balance cost efficiency with resilience and build supply chains that can withstand a world that does not always go according to plan.
‘Globalisation is not dead, but the old recipes for globalisation are,’ said Bjørn Eldar Petersen, CEO of ENRX, as he opened this year’s debate at Arendalsuka.
Trade barriers, geopolitical tensions and the energy crisis have changed the terms of international trade. For companies with customers, employees and operations across multiple countries, the impact is being felt directly.
More adaptable than feared
‘All of us who have spent our careers building businesses in the post-war era have had a reassuring expectation that the world would gradually become more open, trusting and predictable. That is no longer the case,’ said moderator Bård Stranheim. ‘Trade barriers are increasingly being used as a political tool, alliances are breaking down, and democracies are being challenged in ways that directly affect both investments and supply chains.’
‘Yes, geopolitics is now affecting markets in ways we previously regarded as extreme scenarios,’ agreed Thina Saltvedt, Chief Analyst at Nordea. ‘The energy market is a clear example of that.’
At the same time, she cautioned against assuming that every crisis will automatically lead to the worst possible outcome. The closure of the Strait of Hormuz, which affects 20 per cent of the world’s oil and gas transport, has in fact had less impact than anticipated.
‘You would have thought it would have had a huge impact on prices,’ she said. ‘It’s had a large impact, but not a huge one.’
‘The stock market has also not reacted as much as we feared. So, the fact that the world has, at least so far, managed to contain – or at least mitigate – the worst effects of this is a big and positive surprise. But there is no doubt that resilience is absolutely essential now,’ Saltvedt said.
'Geopolitics is now affecting markets in ways we previously regarded as extreme scenarios,’ said Thina Saltvedt, Chief Analyst at Nordea to moderator Bård Stranheim.
‘Globalisation is not dead, but the old recipes for globalisation are,’ said Bjørn Eldar Petersen, CEO of ENRX, at Arendalsuka.
Hanna Opsahl-Ben Ammar to the left.
Building on several strengths
All the panellists had their own experiences of the uncertainty of recent years to share. Hanna Opsahl-Ben Ammar is Executive Vice President at Yara, a company that has experienced geopolitical disruption first-hand. Four weeks before Russia invaded Ukraine, the company switched its supplier of potash, a critical raw material in fertiliser production, from Belarus to Russia. When the war broke out, Russian raw materials accounted for around 60 per cent of Yara’s purchases. Three days later, they were subject to sanctions.
‘At the same time, we had absolutely crazy power prices, so dealing with extreme volatility has more or less become our new way of working,’ Opsahl-Ben Ammar said.
Yara has since worked systematically to diversify its energy position and recently announced the acquisition of an ammonia plant in the US.
ENRX CEO Bjørn Eldar Petersen said that while 2024 was a record year for the company, it had to implement two rounds of cost-cutting measures last year, resulting in an overall capacity reduction of around 20 per cent.
‘In 2025, we had one shock after another. But what is interesting now is that the market seems better able to absorb these shocks and see them as more short-term,’ Petersen said. ‘Investment appetite is back.’
Silje Berntsen Bogen, CPOO at Falkor, has seen a similar picture in her industry, with lower investment levels and more cautious customers. Falkor’s response has been to broaden its business.
‘We have a good pipeline, and we have looked carefully at which markets and industries we need to build up to continue the positive trend,’ she said.
Balancing competing priorities
But what does resilience actually mean in practice? For Tine Fossland, portfolio manager at the Norwegian National Insurance Scheme Fund, it has become a key question in the fund’s dialogue with the companies it invests in.
‘Perhaps the manufacturing footprint that worked before is no longer enough. The rules we have taken for granted for many years have changed. There is a completely different level of predictability – or lack of it,’ Fossland said.
That does not mean efficiency and profitability have become less important, she pointed out. But they now have to be balanced against considerations that may previously have ranked lower on the list, like security, access to critical inputs, market access and the ability to change direction.
The need to adapt
Resilience is also a question of leadership and organisation. Silje Berntsen Bogen believes Norwegian businesses cannot just wait for the right framework conditions to emerge.
‘We can’t simply sit back and say that the framework conditions are not in place, and therefore we can’t deliver. That is the wrong approach. We have to make sure we control what we actually can control,’ she said. ‘Perhaps, as senior leaders, we need to be willing to give up more control so that decisions can be made faster – closer to the markets and closer to the customers.’
Hanna Opsahl-Ben Ammar agreed that organisations themselves need to become more resilient but added that they have a responsibility beyond their own four walls. Resilience must also be built at national level.
‘We need courageous leaders who are willing to stand up, talk to politicians and contribute to the public debate about what we require in order to deliver what Norway will need in the future,’ she said.
A national responsibility
And what Norway undoubtedly needs is access to power. It was a recurring theme in many debates at this year’s Arendalsuka – including this one.
‘Access to competitively priced energy is a cornerstone for developing and investing in energy-intensive industry in Norway going forward,’ Opsahl-Ben Ammar stressed.
‘But it has been argued that we have painted ourselves into a corner when it comes to developing new power generation in Norway – that we have an organisation that creates much ability to delay and very little ability to act,’ Stranheim pointed out. ‘Should the Norwegian energy debate be elevated to a broader societal level?’
‘I believe access to power and the grid is a national responsibility, and it needs to be coordinated in an entirely new way, with a clear target for our future power needs,’ Petersen said. ‘We need to move beyond the small, inward-looking local debates. From a geopolitical perspective, access to power is the big question. And if Norway leaves this to what can be achieved locally, we won’t get anywhere.’
‘At the same time, Norway needs to become much better at taking technology from development to industrial scale,’ he argued. ‘We have been good at developing technology and getting pilots off the ground. But what we are missing, and what I believe is most important here, is to make industrialisation a top priority.’
Making the most of new opportunities
For decades, globalisation has enabled companies to optimise their supply chains based on cost, efficiency and access. Now they must also factor in geopolitics, security, energy supply and the possibility of sudden change.
‘Those who are best able to position themselves for resilience, while also taking advantage of the market opportunities created by this changing landscape, will be the winners over the next five, ten and twenty years,’ Bård Stranheim concluded.
For Norway, that does not mean choosing between being local or global. We need to remain open to the world, while becoming less vulnerable to what happens in it. That is the new recipe for globalisation.