Masterclass: Geo-economics

Over the past five years, business leaders have confronted a long list of complex and rapidly changing concerns — such as artificial intelligence upending cybersecurity, supply chains unraveling during the COVID-19 pandemic and world leaders announcing policy changes on social media.

“Geopolitical risk is the No. 1 question for companies these days,” says Nancy Qian, the James J. O’Connor Professor of Economics at Kellogg and an expert in geoeconomics, economic development, politics and history. “Trade is disrupted, energy prices are changing all the time, and China is buying up a lot of resources. These are all geopolitical risks that are affecting how we do business in the world.”

Following repeated discussions with CEOs about their worries, Qian created the Geo-economics course to help students meet the challenges and opportunities of the moment by applying a more informed perspective.

In five action-packed weeks, the class covers the broad forces shaping global business, including tariffs, manufacturing policies, energy markets, technological change and universal public issues such as climate change.

Once we understand the big picture, then we’re able to manage geopolitical risk better.

Qian aims to provide context that might be lacking in daily news summaries. In trade, for example, while tariff rates may have gyrated wildly over the past year, complaints about unfair trade terms have circulated for decades, she notes. Policymakers have pointed to the large number of carve-outs and exceptions to World Trade Organization agreements and to governments intervening to support nascent industries, such as AI and hypersonic missiles, that are on the technological frontier. “There are some real long-run forces in the background,” she says.

The Geo-economics course builds on core Kellogg classes such as Microeconomics, Statistical Decision Analysis and Crisis Management. Each week, Qian relates the topic to economic and statistical concepts such as asset pricing, causal inference or increasing returns to scale in innovation. The course incorporates lectures, guest speakers and group simulations in which students may take on the persona of a head of state or leader of a consumer advocacy group to develop strategies responding to these challenges.

“There’s no doubt that the past few years have been chaotic,” Qian says. “Still, once we understand the big picture — the fundamental political and economic forces — then we’re able to manage geopolitical risk better.”