Multinational companies could play a critical role in stabilising global economies amid rising geopolitical tensions by investing in sustainable innovation within their global value chains, according to new research from the University of Surrey.
The study argues that rather than retreating from globalisation, governments and policymakers should support global firms to strengthen sustainable production and innovation, particularly in developing economies where international supply chains remain vital for jobs, skills and environmental progress.
Risks of retreating from globalisation
Published in the Multinational Business Review, the research warns that dismantling global supply networks could have severe social and economic consequences for developing countries that rely heavily on international production. The analysis suggests that withdrawing from global value chains could also undermine climate action by weakening international cooperation on shared environmental challenges.
According to the study, global trade and investment remain closely linked to technological development, environmental improvement and long-term economic resilience in many regions.
Dr Shasha Zhao, lead author of the research and Co-Director of the Centre for Social Innovation Management at the University of Surrey, said:
“The global economy is at a crossroads. Multinational corporations have the power and capabilities to build more secure, sustainable and inclusive systems, particularly if they invest in responsible innovation in locations that need it most.”
Lessons from recent global disruptions
The research draws on global case studies of multinational firms operating in politically and economically complex environments. By examining recent disruptions, including the Covid-19 pandemic and international trade conflicts, the study finds that companies investing in sustainable production technologies and local partnerships were better able to withstand political and economic shocks.
Firms that embedded circular supply chains, reduced resource waste and supported local research and development were found to be more resilient during periods of instability.
Three strategies for resilient supply chains
The analysis identifies three core strategies that can strengthen global value chains while delivering benefits for host economies:
- Investing in local research teams and suppliers to support innovation and skills development
- Supporting production methods that reduce waste, pollution and environmental harm
- Applying consistent sustainability standards across global operations
According to the study, these approaches help companies maintain cross-border operations while creating employment, expanding training opportunities and encouraging responsible production.
Sustainability as a stabilising framework
The research highlights Sustainable Development Goal 12 on responsible consumption and production as a practical framework for improving global supply chains. Strengthening sustainability standards, the authors argue, can reduce the risk of countries turning inwards during periods of geopolitical uncertainty.
Dr Zhao added that locally driven innovation often leads to solutions with broader global relevance:
“When innovation comes from teams who understand the local context, the results tend to be more socially aware. Ideas developed in one part of the world can improve lives elsewhere, supporting sustainable growth across borders.”
The study concludes that reinforcing sustainability within global value chains may offer a more effective response to geopolitical volatility than economic fragmentation.
