Global Business Leaders Look to 2026: Implications for the Global South

Executive Summary

The 2026 Business Leaders Outlook from J.P. Morgan paints a picture of cautious stabilization among US midsize companies after a year of uncertainty. While optimism about the national economy has recovered from midyear lows, it remains well below the highs of early 2025. Yet confidence in individual company performance stays robust, and investment in artificial intelligence continues to reshape operations.

For the Global South, these findings offer more than a snapshot of US business sentiment. They serve as an early indicator of how global capital, technology, and trade patterns may evolve—and where emerging economies must position themselves to benefit from the next phase of structural transformation.

Introduction

Each January, the Business Leaders Outlook survey conducted by J.P. Morgan captures the expectations of midsize US business leaders spanning manufacturing, wholesale, technology, and professional services. The 2026 edition reveals a tempered but resilient corporate mood: half of respondents remain neutral on the global economy, while local and national outlooks fare somewhat better. More striking is the divergence between macro caution and micro confidence—71% of executives express optimism about their own company's performance, even as they hedge on the broader environment.

That divergence carries direct relevance for policymakers, investors, and development practitioners across the Global South. In a world where supply chains, capital flows, and technology diffusion increasingly connect emerging markets to the corporate strategies of advanced economies, shifts in business sentiment in the United States often become tangible economic signals elsewhere.

Background and Context

For much of the past two decades, the global economic cycle has been closely tied to business investment decisions in the United States and other major economies. The 2026 survey's findings come after a period marked by new tariff regimes, changing policy expectations, and rapid technological disruption—factors that have direct consequences for economies in Africa, Latin America, Asia, and the Middle East.

Historical data referenced in the report shows that national economic optimism among US business leaders hit a five-year high of 65% in early 2025, only to fall to 32% by midyear as tariffs and policy shifts took hold. The current reading of 39% suggests a partial rebound, but the lingering caution reflects the unresolved nature of trade tensions and monetary policy adjustments.

From a Global South perspective, this pattern is not new. When advanced-market businesses feel uncertain, they tend to pause foreign direct investment, delay procurement contracts, and hold back on technology partnerships. Emerging markets, which rely on export demand and external financing, often feel these shifts amplified.

Main Analysis

Cautious Global Outlook, Resolute Company-Level Focus

The survey shows that global economic optimism stands at 28%, almost exactly equal to the 15-year average. This indicates that corporate leaders have normalized a modestly pessimistic view of the global economy—something they have held since the early 2010s. By contrast, local economy optimism sits at 44%, and nearly three-quarters of respondents expect revenue growth for their own firms.

For the Global South, the normalization of low global optimism is a structural concern. When multinational and midsize companies in the United States consistently discount the global economy, they are less likely to pursue ambitious cross-border expansion into emerging markets. Instead, they focus on domestic resilience, cost efficiency, and protecting their home market share.

However, the gap between macro pessimism and company-level confidence also creates space for strategic engagement. Emerging-market firms and governments can position themselves as partners for those growth-oriented companies that are actively seeking new revenue streams, particularly in digital services, infrastructure, and consumer markets.

Artificial Intelligence and the New Production Landscape

One of the most significant findings is the accelerating integration of AI into business operations. The survey reports that 27% of leaders anticipate a headcount impact from AI in 2026, with process automation (62%), predictive analytics (44%), and market intelligence (42%) being the most common applications.

For the Global South, AI adoption in advanced markets has dual implications. On one hand, it raises the productivity bar for global competitors, making it harder for emerging-market firms to compete solely on low-cost labor. On the other hand, it accelerates the diffusion of digital tools and platforms that can be adopted or adapted in developing economies.

Countries in the Global South have already made significant progress in digital public infrastructure, mobile payments, and e-governance. The survey's emphasis on process automation and predictive analytics suggests that the next wave of AI deployment will be in back-office functions, supply chain management, and customer-facing services—areas where emerging markets are rapidly building capacity.

To translate this into development gains, governments in the Global South should prioritize AI literacy, data governance, and the creation of local AI ecosystems that complement rather than merely consume foreign technology. Regional cooperation on AI regulation and shared digital infrastructure could also reduce the cost of adoption and prevent a new digital divide.

Trade, Tariffs, and the Reconfiguration of Supply Chains

Tariffs have been a defining issue for US business leaders over the past year. The survey finds that 61% of respondents report a negative impact on their costs from tariffs, while 30% remain unaffected. This widespread concern explains the persistent caution in the global outlook and the shift toward regional or domestic sourcing.

For the Global South, the tariff-driven reconfiguration of global supply chains is a double-edged sword. In the short term, higher US tariffs on Chinese goods have created opportunities for manufacturers in Vietnam, Mexico, India, and select African economies to fill import gaps. In the longer term, the uncertainty around trade policy discourages the kind of long-term investment in export-oriented infrastructure that emerging economies need.

The survey data suggest that cost pressures are driving US firms to automate more of their production, which could reduce the labor-intensive manufacturing opportunities that have historically served as a first step on the industrialization ladder. That makes it all the more important for Global South countries to move up the value chain, investing in skills, logistics, and regional integration so that they compete on productivity rather than wage levels alone.

Investment and the Hunt for Growth

Despite their cautious macro outlook, a significant share of business leaders intends to expand their workforce (48%) and projects higher profits (64%). This indicates that many companies see growth opportunities outside their immediate macroeconomic environment. For the Global South, this suggests that capital is still available for projects with clear returns and credible governance.

Development finance institutions, sovereign wealth funds, and private equity players in the Global South can take note of the priorities these business leaders hold: revenue growth, profitability, and the efficient use of AI. Infrastructure projects that genuinely improve logistics, energy access, or digital connectivity will remain attractive to foreign investors, provided they are structured with predictable regulatory frameworks and transparent procurement.

The Innovation Economy: A Separate Momentum

The survey's Innovation Economy segment—comprising early-stage startups and high-growth businesses—shows notably higher optimism, with 82% of these respondents feeling good about their own company's prospects. They are also more likely to anticipate a recession, reflecting the higher-risk, higher-reward nature of the innovation sector.

This segment matters for the Global South because it represents the companies most likely to seek new markets, form cross-border partnerships, and adopt disruptive technologies. Emerging-market innovation hubs, from Nairobi to Bengaluru to São Paulo, are well positioned to plug into this global ecosystem, but doing so requires continued investment in technical education, intellectual property protection, and access to venture capital.

Development Impact

The trends highlighted in the 2026 Business Leaders Outlook carry concrete implications for economic development across the Global South:

• Industrialization: Tariff pressures and automation may reduce opportunities for export-led manufacturing based on low wages. This reinforces the need for industrial upgrading, worker reskilling, and the development of regional value chains.
• Technology Adoption: AI-driven process automation in advanced markets sets a new baseline for competitiveness. Emerging economies must accelerate their own adoption of digital tools in both public and private sectors to maintain cost advantages and improve service delivery.
• Trade and Investment: Cautious global sentiment could slow foreign direct investment into emerging markets. To counter this, Global South governments should strengthen investment protection, streamline regulations, and develop bankable project pipelines.
• Employment: The survey's finding that AI is beginning to affect headcount suggests that employment structures in the Global South will also shift, particularly in outsourcing and back-office sectors. Policies that support lifelong learning and social safety nets will become more critical.
• Regional Integration: As global trade becomes less predictable, intra-regional trade within the Global South becomes a more important buffer. The African Continental Free Trade Area (AfCFTA), RCEP, and other regional agreements should be accelerated to reduce dependence on distant markets.
• Climate and Energy Transition: While not directly measured in the survey, the corporate focus on cost efficiency and automation may sideline sustainability investments unless policy incentives align. The Global South should use climate finance mechanisms to attract investment in renewable energy and resilient infrastructure.
• Financial Inclusion: The adaptation of digital payments and AI-based credit scoring in advanced markets can be leapfrogged to expand financial access in underserved communities across the Global South.

Global South Perspective

The findings of the 2026 Business Leaders Outlook are primarily a reflection of US corporate sentiment, but they offer a useful lens through which to evaluate the global operating environment for the entire Global South.

For Africa, the cautious US outlook means that the continent must deepen its ties with non-traditional partners—including China, India, the Gulf states, and other Global South economies—to diversify its sources of investment and technology. The AfCFTA offers a platform for building more self-reliant value chains that can withstand volatility in Western markets.

Latin America, closely tied to the US economy, may feel the direct effects of tariff-driven cost pressures in its export industries. At the same time, the region's growing investment in nearshoring and digital services positions it well to capture relocation activity from Asia.

South and Southeast Asia remain attractive destinations for diversified manufacturing and digital innovation. The survey's emphasis on AI should motivate these regions to invest heavily in STEM education and digital infrastructure to remain competitive.

In the Middle East and North Africa, the accelerated global interest in energy transition and digital government creates openings for both oil-exporting and import-dependent economies to build resilient, diversified economies.

For BRICS and other South-South cooperation mechanisms, the outlook underscores the need to build alternative financing vehicles, such as the New Development Bank and the Asian Infrastructure Investment Bank, to support long-term development projects that may become less attractive to private investors from the advanced economies during periods of uncertainty.

Future Outlook

Looking ahead to the next five to ten years, several structural forces will shape the intersection between US business sentiment and Global South development:

• Artificial Intelligence and Digital Economy: AI will become ubiquitous in global business. The Global South must focus on building local AI capabilities, ethical data governance, and digital skills to avoid dependency on foreign technology providers. Digital trade and e-commerce will continue to expand, offering small and medium enterprises in emerging markets access to global customers.
• Industrial Transformation: The combination of automation and geopolitical trade fragmentation will likely lead to more decentralized, localized production. Global South countries that invest in infrastructure, logistics, and regulatory harmonization can attract segments of this reorganized supply chain.
• Infrastructure and Connectivity: Public investment in digital, energy, and transport infrastructure will remain a critical enabler. Multilateral development banks and blended finance will play a key role in de-risking private investment.
• Climate and Energy Transition: The corporate pressure to reduce costs may delay green investments, but climate finance frameworks—including carbon markets and resilience funds—will create new opportunities for the Global South to monetize its natural assets and leapfrog to clean energy.
• Development Finance: The cautious global outlook may encourage long-term investors to seek higher yields in emerging markets, provided risk-adjusted returns are adequate. The Global South should work to improve creditworthiness and project preparation to attract these flows.
• Global Governance: The normalisation of low global optimism among business leaders signals that trust in the global economic architecture is fragile. Reforming global governance institutions to give the Global South a stronger voice could help restore confidence and create a more inclusive and stable international order.

Conclusion

The 2026 Business Leaders Outlook from J.P. Morgan offers a revealing snapshot of corporate expectations at the start of a new year. The dominant message—cautious on the macro economy, confident at the company level, and increasingly betting on AI—has important strategic implications for the Global South.

Emerging economies cannot control the sentiment of business leaders in the United States or elsewhere. But they can control how they prepare for the shifts those sentiments portend. By investing in human capital, digital infrastructure, and regional cooperation; by pursuing a more deliberate industrial policy; and by strengthening the institutions that underpin predictable business environments, the Global South can turn a moment of global caution into an opportunity for accelerated structural transformation.

The path forward is not one of passively waiting for foreign investment moods to improve. It is one of proactive development—building the capabilities, partnerships, and governance systems that make the Global South an indispensable partner in the global economy's next chapter.