What is the Multipolar World? (vs Unipolar)

Recently there has been a lot of talk about a new multipolar world. 

This is such an enormous idea and a huge conversation. 

I am especially interested because a multipolar world could presumably impact our international marketing strategies and how we do business across the globe.

I had so many questions that I decided to do some research and find out more facts so I could educate myself on, “What is the multipolar world?” and how it could impact our international marketing initiatives. 

What is the multipolar world?
The multipolar world refers to an international community with several great powers that balance the world order.  In a multipolar world, no one country has total control and influence over other nations. For example, the United States, China and Russia are three great powers that may keep each other balanced in the multipolar world.

After some research I found that some global shifts in power and influence are happening right now. These shifts will affect how we do business, socio-economic implications and access to capital, and of course there will be some political implications, which will not be a focus of this article.

Let’s now get into some of the details as it relates to, “What is a multipolar world?”. Here's what I found: 

What is a multipolar world?

And how will it impact your international marketing strategies?

Right now, you and I are living during one of the most fascinating global changes our world has ever seen.

That’s because the world is changing from a unipolar world to a multipolar world -- right in front of our eyes.

This is a very important topic to be aware of as you build and strategize your international marketing strategy.

In this helpful and thought-provoking article we will define what the multipolar world is, compare it to a unipolar world, briefly review how the international marketing landscape is affected and then review some ideas for what this might mean as you construct your international marketing plan.

Let’s now discuss the differences between a unipolar world and a multipolar world, and review some possibilities.

Is the world transforming into a multipolar world ?

What a multipolar world may mean is that the United States, or the main forces dictating many policies for the United States, may not hold as much centralized power.

This means these forces may not have as much influence over other nations as it has had for much of recent history. In fact, many resources suggest that some of this power and influence has included the 20th century and possibly started as early as the 16th century.

One example of this shift to a multipolar world is the advent of the world's largest free trade agreement (FTA) that was just organized, representing an incredible 30% of the world’s population.  

This trade agreement is called the Regional Comprehensive Economic Partnership (RCEP) and has member countries such as Thailand, Indonesia, Philippines, Australia and China. The United States is not a direct trading partner in this multinational free trade agreement.

This seems like a very big deal as so much innovation will be produced and distributed as a result of the FTA. For a helpful article about the RCEP, see our article here: 

What is the RCEP trade agreement in simple terms?

Maintaining an atmosphere of free trade, global peace and sustainable development requires a balance of power among the biggest powers. The biggest powers are the nations that possess significant military strength, political stability, economic capability, resource endowment, and population.

The multipolar world refers to an international community with several great powers that balance their control and influence over other nations. 

The distribution of power capabilities determines the number of great power states and, consequently, world polarity. 

When the world has two or more dominant powers competing for influence on a global stage, multipolarity is the result.

History provides examples of different periods of multipolarity. 

1. For example, the thirty-year war ended with the Treaty of Westphalia in 1648—and led to a balance of power between the then two poles, Sweden and England versus Spain and France.
2. More recently, after the Second World War, two major powers emerged; the United States and the Union of Soviet Socialist Republics (USSR), leading to a bipolar world with what some experts say was a nearly perfect balance of power and influence.

Although the two opposing superpowers dominated the international system with the solid military, economic and political sway over their allies, arguably, some experts would suggest that the world enjoyed relative peace and stability for more than four decades before the USSR collapsed.

With the collapse of the Soviet Union and the cessation of the Cold War, the United States became the face of the greatest power with no significant opposition despite the world assuming some multipolarity. In other words, the perception was that the US became a unipolar power in a "multipolar" world. 

So, is the current international system multipolar or unipolar?

Unipolar vs Multipolar: What's the difference?

A unipolar global system emerges when a single major power has decisive influence or command and control over other nations. 

In this scenario, the state stands as the only superpower, with no government to balance its power.

For example, the British Empire lasted about 400 years, and grew to over 400 million people.  An incredibly powerful navy combined with being the first industrial nation, may have made Britain a hegemony as it dedicated policy and authoritarianism over its 90 colonies it looked to for other countries natural resources, per the World Atlas.  

There is a huge lesson here in ‘all things’ moral, legal, and ethical in business and international marketing. For an excellent thought experiment and to read some helpful articles on the topic of Free Enterprise, Free Enterprise in Marketing and “What would Happen Without Free Enterprise?”, please see these three helpful articles:

• What exactly is free enterprise? 
• What is free enterprise in marketing? 
• What would happen without free enterprise? (6 bad things)

After reading these articles and seeing how the British Empire conducted business for nearly 400 years, a multipolar world may be evermore important moving forward.

Additionally, for a very helpful article to put more color on the importance of international marketing in a free enterprise environment go here for a great article:

What is the deglobalization trend? (vs. globalization)

For another example, after the 1989 collapse of the Soviet Union, one could argue that the world reverted to a unipolar international system where the United States influenced and shaped the economic, political, and cultural landscape in the rest of the globe. 

Besides the USSR's dissolution, factors contributing to the United States hegemony include its geographical location and military power that granted security. Unlike European powers, China and Russia, the US is isolated and physically distanced.

That said, new factors such as the rise of China and BRICS countries seem to challenge and even cause a decline in the world unipolar system. 

With the potential return to a multipolar system, the world would have to find a new balance where the major powers balance their economic, technological, military, and political capabilities. 

China, India, Brazil, and other members of BRICS have the potential to alter the current international structure by creating more trade agreements and rely upon their own natural resources for food, energy and an increase in international trade and marketing.

This shift towards self-reliance of individual nation states, and a more equitable shift of power, could present more opportunities for international marketing.

What is Unipolar World Order?

From rising China to the Arab Spring protests, is it possible that geopolitical changes are transforming the world from a once unipolar world centered around Washington DC to becoming a more expansive multipolar international system?

Some experts think so.

But let’s go a little deeper into the definition, so it is very clear.

Merriam-webster.com defines unipolar as:

“Having or oriented in respect to a single pole: such as based
on or controlled by a single factor or view.”

As an example, an academic with Ohio State University named Thomas A. Stewart suggested that “China mistrusts a unipolar, U.S.-dominated world.”

Another important word to add to this discussion is: hegemony.

Dictionary.com defines hegemony as:

“leadership or predominant influence exercised by one nation
over others, as in a confederation.”

Let’s now bring this to the center of the conversation.

After the Cold War and the fall of the USSR, the United States has remained the only superpower leading to a unipolar world for the past 20 years. 

Consequently, the US has been crucial in curating a new, unipolar world order.

Even before the unipolar era, the United States laid the foundations for the current global economic model by supporting the General Agreement on Tariffs and Trade, which later became World Trade Organization and Bretton Woods Agreement. 

While the agreement had representatives from around 44 states and led to the creation of the International Monetary Fund and World Bank, the US maintains indirect control of these international financial institutions. 

Besides politics, the unipolar system has allowed the US to influence the world order by exerting its political and social influence on other nations. 

For example, during the Cold War, the United States indirectly suppressed the spread of socialist values by supporting anticommunist movements and possibly transforming the political landscape.

Multipolarity and your international marketing strategy

Very few people, if any, know how things will unfold, but there are some factors that can play a role in your international marketing strategies.

While we have no control over these macro topics, here are some things to periodically keep your eye on:

1. DOW 30: Watch the global flow of capital. Capital flows to where it is treated best. That is, it goes to where it gets the highest, safest return. I expect the United States to continue to be a strong place for capital. A good measurement is the DOW 30. Another place to keep an eye on is the Singapore financial markets, especially as the Asian markets mature.
2. Bond Markets: Watch the bond markets, and the relationship between bond rates from various countries (called "the spread"). For example, as the Federal Reserve raises interest rates the 10 year note goes up as well. This is known as the risk-free rate and is a good barometer of the global financial markets. As the US 10-year rises, and for example, if the German 10-year-bond (called the Bund) remains the same, the spread between the two gets larger and generally more capital will flow to the US in search for a better return. This spread is a financial indicator of capital flow.
3. Eurodollar market: As the Federal Reserve raises interest rates, this puts pressure on the world's largest financial market; the Eurodollar market (not to be confused with the Euro). Eurodollars are US dollars deposited in foreign banks and represent trillions of dollars of derivatives, valued far more than what is in the US. This is a very interesting topic, one that we are regularly learning more about. As the offshore US dollars come back to the US as a result of raising rates (called reverse repurchase agreements), this reduces the amount of US dollars and therefore liquidity available to many countries, thereby possibly affecting targeted buyers within your international marketing strategies in the countries that are most affected.
4. Oil, Gold and Bitcoin: Regardless of how you feel about oil and gold, they are core to global financial markets. Gold has been money for about 2,000 years. Watch what countries are buying gold in relation to how much other countries buy. For oil, keep an eye on the price of oil, the main producers, and the main buyers as this is a good measurement of general growth which may become a location for a potential international marketing strategy. While many believe it's in its infancy stage, Bitcoin is an important measurement of liquidity and is a legal currency for some countries. 
5. Food production: Food production is an excellent topic to keep an eye on as it is important for any country to sustain themselves.  Food production is of course important for a variety of reasons, whether as an important product input, a source of customers for your international marketing strategy, or a place to sell your food products.  I like to start by simply checking up on the biggest food producers, reading some of their press releases and see where that takes me.

For a very helpful article that clearly outlines and reviews the biggest food producers, go here:

What are the biggest food companies in the US? (+Amazing brands)

For a good article that describes the biggest agriculture companies in the US, and some basic agriculture guidelines, go here:

What is the Biggest Agricultural Company in the US? (+Top 5)

6. Free Trade Agreements: As more countries focus on self-reliance, an increase in free trade agreements seem like a natural extension. For example, El Salvador is entering into more agreements as it takes a fresh approach to its currency, tourism, productions and business environment which may put them on a list of potential international marketing opportunities. Many countries are regularly entering into free trade agreements globally and it's worth at least making a mental note. Go here for several excellent articles about free trade agreements including CAFTA-DR, RCEP and USMCA as well as India, Belize and Costa Rica.
7. Political environment: This is my least favorite topic, but a very important topic to at least have a general thumb on. For example, Costa Rica is known for being a politically stable country in a historically somewhat volatile region of Central America.

Final Word

The international system's polarity depends on the distribution of power potential among the globe's major powers. 

When more than one great power exists, a geopolitical situation of multipolarity results. After World War II, the international system was typically bipolar, with opposing US and USSR powers and no peripheries. 

But the collapse of the Soviet Union left the United States as the only superpower, leading to a unipolar world order for the past two decades. 

Notably, rising powers within BRICS and the EU threaten the current unipolar state, implying the world might soon return to multipolarity.