In today’s world, every headline you come across is echoing a year characterized by volatility, and this is not without reason. A staggering $44 trillion in GDP is undergoing elections this year, representing approximately half of the global economy. This situation underscores the significant impact of our increasingly precarious geopolitical and economic landscape, marked by heightened bloc rivalries and an escalation in posturing by non-aligned nations.

Nevertheless, despite these global uncertainties, domestic equity markets continue to show optimism. Valuations are nearing all-time highs, standing at approximately 22 times earnings. Investors appear eager to embrace a robust U.S. economy, especially with the Federal Reserve signaling the possibility of up to three rate cuts (with many in the market expecting even more). Perhaps now is an opportune moment to revisit the research on the Presidential Election Cycle Theory.

2024 Elections & Technology Implications

As we wrote during our final weekly of 2023, this year we will see elections in nations across the globe which represent over 4B people (2B+ eligible adults expected to vote):

64 Countries plus the European Union, roughly 49% of the world, will hold national elections in 2024. Elections to watch: United States (November), Taiwan (January), Pakistan (February), India (April), Mexico (June), and EU (June). It’s worth noting that the average age of political leaders globally is getting younger and younger… According to Freedom House, the median age of political leaders in countries classified as “not free” is 69, compared to the median age of political leaders in “free” countries, 58. The United States and Namibia are the only “free countries” with a political leaders aged 80 or older.

The relationship between political leadership and technological advancement is not new. Throughout history, changes in political regimes have often led to shifts in tech priorities and policies. For example, the space race of the 20th century was significantly influenced by the political climate. The election of John F. Kennedy as President of the United States in 1960 played a pivotal role in advancing the US space program, leading to the moon landing in 1969. Kennedy’s commitment to winning the space race against the Soviet Union resulted in increased funding and resources for NASA – in 1961, less than a year after winning the Presidential race, he asked Congress for $7B-9B of additional funding over the next five years for the space program to land a man on the moon.

The upcoming global elections in 2024 are poised to significantly influence the development of key technologies, marking a critical point where political decisions will intersect with technological advancement. AI, 5G, cybersecurity, digital health, data privacy, quantum computing, autonomous vehicles, and space technology are just some of the technologies at the forefront of this intersection. The direction and intensity of AI development, for instance, will depend heavily on the regulatory and ethical frameworks established by these newly elected governments. Similarly, the expansion and regulation of 5G networks will be shaped by political commitment to infrastructure development and strategic global positioning. In the realm of cybersecurity, the robustness of national and international digital defense mechanisms will reflect the incoming administrations’ prioritization of digital security. Digital health initiatives, offering revolutionary changes in healthcare delivery, will require supportive policy environments to fully realize their potential. The complex issue of data privacy regulation will also be at the mercy of these elections, with new policies potentially redefining the balance between privacy rights and innovation. Moreover, the emerging fields of quantum computing and autonomous vehicles are awaiting further investment and regulatory clarity, which will likely be influenced by the election outcomes. Lastly, the future of space technology, transitioning from government-led to more collaborative models, will be guided by their policies as well.

The 2024 global elections are expected to take place in more than three dozen countries, representing a total population of over four billion people. Some of the key elections to watch include (per the Council on Foreign Relations):

• European Parliament Elections: Citizens of the EU’s twenty-seven member states will select 720 parliamentarians to serve from 2024 to 2029. More than four hundred million Europeans are eligible to vote, making the EU parliamentary election the second largest in the world after India’s national election.
• Bangladesh General Election, January 7: The election is expected to be contentious, with the ruling Awami League facing allegations of eroding democracy. More than 160mm people are eligible to vote in Bangladesh
• Taiwanese Presidential Election, January 13: The election will have enormous geopolitical consequences, especially in relation to Taiwan’s relationship with China. The population of Taiwan is ~23mm (more on this election below).
• Pakistani General Elections, February 8: Pakistan, with a population of over 230mm people, will hold general elections.
• Indonesian General Election, February 14: Indonesia, with a population of 275mm people, will hold a general election, with three leading candidates vying for the presidency.
• Indian National Elections, April-May 2024: India, with a population of 1.4B people, will hold national elections, which will have far-reaching implications for the country’s governance and the global economy.
• Mexican Presidential Election, June 2: Mexico will likely have its first woman president, with a population of over 126mm people (more on this election below).
• US General Election, November 5: The United States will hold a general election, which will surely be one of the most contentious in recent history.

Besides the US, there are two from the above list that we are particularly interested in because they have direct connections to a few of the themes we have been focused on: cross-border trade, near-shoring, AI/ML, and national security technology. The first is Taiwan, and the second is Mexico.

Taiwanese Presidential Election Candidates

William Lai of the Democratic Progressive Party, the incumbent Vice President, is likely to continue the socio-economic policies of the DPP government. His flagship manifesto, the National Project of Hope, focuses on technology, finance, communication, social justice, and developing a healthy aged society. Lai emphasizes sustainable development, including the application of green energy and achieving Taiwan’s net zero emissions goals. Additionally, while Lai has previously expressed pro-independence sentiments, he has moderated his stance in recent years. His approach towards cross-Strait relations aims to maintain the current status quo. Hou Yu-ih of the Kuomintang (KMT), the Mayor of New Taipei, has criticized the DPP’s failure to deliver on certain socio-economic reforms. His policy proposals include reforming the elderly care system, implementing public-funded childcare, and introducing housing policies to assist young people. Hou endorses the “1992 Consensus” as a basis for dialogue with China and has connections with the Chinese leadership, though this comes with certain liabilities. Ko Wen-je of the Taiwan People’s Party (TPP), the former Mayor of Taipei, adopts a pragmatic approach in cross-Strait relations. His policy focus includes more exchanges in the economy, education, and other fields, and resuming high-level diplomatic dialogue with China to reduce tensions. Ko’s stance on maintaining equally constructive relations with both the United States and China has raised questions about his potential foreign policy approach.

All candidates agree on the necessity of enhancing Taiwan’s self-defense capabilities to deter China. Defense policy and Taiwan’s relations with the United States and Japan are key campaign issues for all candidates. In terms of foreign policy, each candidate has demonstrated commitment to Taiwan-US relations, though Washington has reasons to be skeptical of all three. They have also shown interest in strengthening Taiwan-Japan relations, a critical aspect of Taiwan’s foreign policy. These candidates represent different stances on Taiwan’s crucial issue of cross-strait relations. Lai is expected to continue the DPP’s policy of de facto independence without formal declaration, Hou emphasizes dialogue with China, and Ko advocates for a balanced approach between maintaining Taiwan’s autonomy and engaging with Beijing.

Mexican Presidential Election Candidates

In the upcoming 2024 Mexican Presidential Election, the political priorities and visions of the two leading candidates, Claudia Sheinbaum and Xóchitl Gálvez, reflect distinct perspectives for the future of Mexico. Claudia Sheinbaum, representing the ruling party Morena and a protégée of the current President Andrés Manuel López Obrador (AMLO), is likely to continue policies in line with AMLO’s administration. Her political focus will likely be issues like energy security, the role of the state in economic strategies, and continuing the current government’s stance on nearshoring or “ally-shoring,” which aims at realigning supply chains in the context of global economic shifts. Xóchitl Gálvez, a senator from the state of Hidalgo, is the candidate for the Frente Amplio por México (FAM) alliance, which includes traditional opposition parties like PAN, PRI, and PRD. Gálvez, known for her pragmatic and pro-business approach, might prioritize economic growth and innovation while addressing corruption and governance issues. This election is crucial for Mexico’s future, as it could define the country’s path regarding economic policies, governance, and international relations, especially in the context of evolving US-China relations.

Additionally, one other topic worth highlighting relating to Mexico’s elections is how the USMCA (fka NAFTA) will evolve in the coming years, in particular because its first major review is scheduled for July 2026. Trade between the US, Canada, and Mexico exceeds $1.5T annually and the US invested over $30B in Mexico in 1H’23 alone. Double digit trade growth over the past two years has boosted trade volumes between the US and Mexico/Canada 44% higher than US goods trade with China. The three countries are now ~1/3 of global GDP with intra-regional goods trade supports ~10mm jobs across North America. Additionally, capital investment in North America has grown 134% since the implementation of USMCA ($200B+). This growth is being driven primarily by new investments in supply chain tech, EVs, semiconductors, and manufacturing infrastructure. And as we’ve discussed previously, near shoring is driving Mexican export growth (nearly $80B of additional exports is expected from LatAm and the Caribbean over the long-term due to near shoring with $35B flowing from Mexico). In fact, Costa Rica has even recently started lobbying the US and Canada to join the USMCA to complement its participation in the Dominican Republic-Central America FTA: “the CAFTA-DR jacket is a little tight for us and we need one that fits us better.” All of this is to say that the negotiations in 2026 will likely be supportive of further expanding the agreement. Still, there are a handful of disputes such as automotive rules of origin, Mexico’s ban on GMO corn, and the US challenging a 2021 amendment to Mexico’s Electric Power Industry Law that prioritizes publicly produced electricity over electricity produced by private competitors. These issues have come up during scheduled annual meetings, but 2026 will be the first major review of USMCA’s implementation. Much has changed geopolitically since it first went into effect, but so far, the agreement has been mutually beneficial for strengthening this trilateral trade bloc. Depending on who wins elections in the US and Mexico this year, we could see very different outcomes related to dispute resolutions and expansions/contractions to the agreement itself.

The 2024 elections will shape the trajectory of technological development and integration across the globe. This momentous intersection of politics and technology stands as a testament to the current era where the ballot box, for better or worse, will play a major role in unlocking or constraining the potential of emerging technology frontiers.