Five megatrends, namely climate change, technological disruption, demographic shifts, a fracturing geopolitical world and their impact on social instability, are driving a global geoeconomic reconfiguration, says strategy consulting business PwC Strategy& in its ‘South Africa Economic Outlook’ report.

The global geoeconomic reconfiguration is dramatically changing the rules of the game, the company states.

PwC’s Global M&A Industry Trends 2025 Mid-Year Outlook found that global mergers and acquisitions volumes declined 9% year-on-year in the first half of this year, with one in three US companies having paused or revisited deals in response to US import tariff uncertainties, says PwC South Africa chief economist Lullu Krugel.

“Measurements of global uncertainty have reached new highs. Many are blaming the dramatic shift in US tariffs as the cause of this. However, trade disruption is just one of the global shifts that is impacting the world economy in 2025,” she says.

The future of trade is increasingly unpredictable, with significant disruptions expected towards 2030 from evolving geopolitics and regulations, rapidly changing consumer preferences, workforce shortages and technological advancements.

This requires South African exporters to reinvent themselves to benefit from the opportunities created by shifts in trading partner policies, she recommends.

Companies must address immediate hurdles, while preparing to leverage powerful, long-term shifts in the market. Some will need to radically transform how they create, deliver and capture value, both locally and abroad, says PwC Africa CEO Dion Shango.

Business model reinvention involves rethinking the essential parts that drive a business, including the value it offers, how it makes a profit, its core capabilities, processes and resources. Action is the key here, and South African export-oriented companies will have to reinvent their business model or risk falling behind competitors, he advises.

As industry boundaries blur, smart companies will seek out new models that transform how they work, known as business model innovation. Whether a company is motivated by revenue growth or rising competitive pressure or both, PwC's research suggests that when companies take actions to reinvent their business model, they realise higher profit margins.

Other companies will adopt operating model innovation. The operating model is the beating heart of a company, essential to how it functions, competes and grows. With new developments in AI and other advanced technologies, leaders have a chance to address operational priorities, such as building climate-resilient supply chains, rewiring functions and tasks or pursuing growth through operating model transformation.

Yet others will move to strengthen their critical capabilities. Three capabilities deserve close attention from businesses owing to their direct link to value creation, namely ecosystem cultivation, deal-making, and risk management. These are crucial in a world where advanced technologies, climate change and shifting geopolitics demand radical rethinks, the report says.

Meanwhile, policymakers globally are also grappling with how to respond to these global trends. To better understand what this could mean for South Africa, PwC simulated possible policy responses to these global changes by the country’s ten largest export partners.

The team's calculations show that policy shifts could yield a potential extra boost in export revenues of R188-billion towards 2030, compared to the baseline. An estimated 1.7-million jobs in South Africa are directly created and/or supported by exports.

In different countries, these shifts could include, for example, investments in technological development and the hydrogen economy which would, in turn, increase demand for South African exports of platinum group metals.

“Changing policies and regulations are not costs of doing business and requirements to comply with, but rather climate regulation can drive innovation, and business model changes can be aligned with tax incentives and desired outcomes can help fund business model reinvention,” says PwC South Africa senior economist Christie Viljoen.

“For South Africa’s business leaders, the changing global order requires a rethink of how their company makes money and how this will change in the next few years,” says Krugel.