World no longer single global market, firms must navigate between fragmented blocs, countries: Nilekani
NEW DELHI: Global businesses can no longer view the world as a single market but must now navigate a landscape divided into fragmented blocs and countries, said
Infosys
Chairman
Nandan Nilekani
.
He pointed out that multiple trends are colliding, forcing companies to reexamine their fundamentals and make strategic choices in the face of growing geopolitical uncertainty.
In Infosys' annual report for FY25, Nilekani explained that as geopolitics comes to the forefront, companies are required to adapt their strategies and even make decisions about how to operate between these different blocs.
"As geopolitics becomes front and centre in our lives, we are having to take cognisance of the world not as one single
global market
but as fragmented blocs and countries. This means making strategic choices and even navigating between these blocs," Nilekani said.
The
COVID pandemic
brought to spotlight the pressing need to reduce risks in supply chains and develop reliable backup options. Relying solely on just-in-time delivery was no longer sufficient; companies also had to prepare for unexpected disruptions, the IT veteran noted.
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"Tariffs are further driving home the point that we need to diversify our sourcing. Tariffs will be differentiated across products and countries and will likely keep changing. Bilateral and regional rules of trade will dominate. Supply chains will continue to shift as tariffs become another form of arbitrage," Nilekani said.
He added that
artificial intelligence
(AI), with its possibilities and potential, creates another arc of uncertainty.
As AI rapidly transforms the business landscape, Nilekani underscored the critical importance for enterprises to modernise their legacy systems and build robust data architectures to fully harness AI's potential.
"The advent of AI with all its possibilities and potential creates another arc of uncertainty. As enterprises look at applying AI to every aspect of the business, some long standing challenges will become imperative and self-evident to firms," he said.
The need to modernise legacy systems, and the need to create a data architecture so that all the firm's data is consumable by AI, in a holistic manner, can no longer be put off.
He urged enterprises to have an
AI foundry
and an AI factory to fuel innovation and scale.
However, Nilekani also cautioned that the adoption of AI comes with risks, particularly due to varying regulatory frameworks across different regions.
"While embracing AI will bring a goldmine of opportunities, it will not be entirely without some foreseeable risks. Regulatory variances across regions will need to be incorporated into one's strategy," he said.
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