Monday, June 30th, 2025
The narrative that the West, led by America, is in a phase of relative decline is common nowadays. From political gridlock in Washington to economic stagnation in parts of Europe, and the rise of BRICS and emerging markets, it’s become fashionable to say the future lies elsewhere.
But we’re still bullish on the West. And recent geopolitical events offer a compelling reminder of why. The battlefield, grim as it may be, often reveals where real power lies. And what we’ve seen in recent conflicts, particularly in the Middle East, is this: Western technology still dominates. And for investors, that means one thing: the West should remain the core of your global investment portfolio.
Take the ongoing conflict in the Middle East, where the Israel-Hamas war has escalated into a wider regional standoff involving Iran and its proxies. Setting aside the political and humanitarian dimensions, this war has inadvertently become a stark reminder of where technological supremacy lies.
From air defence systems like the Israeli Iron Dome, powered by American and Israeli software and hardware, to precision-guided munitions, satellite surveillance, and AI-driven threat detection, the entire military playbook runs on Western innovation.
Iran’s recent massive missile and drone attack on Israel in April was repelled with near-total effectiveness by a Western-aligned coalition using US, UK, and French systems. Hyped-up Iranian drones? Almost all of them downed. Ballistic missiles? Intercepted mid-air. The message was clear: in a high-stakes, high-tech confrontation, Western defence technology works, and it works better than anything else out there.
But this isn’t just about missiles. These same technologies, sensors, automation, real-time data integration, advanced manufacturing, are the backbone of some of the most powerful commercial trends today. The companies behind these defence systems often have a foot in civilian sectors too: think semiconductors, cloud computing, cybersecurity, and AI.
Western firms still lead in these areas. The US is home to the most advanced chip designers (NVIDIA, AMD), software platforms (Microsoft, Palantir), and defence primes (Lockheed Martin, Raytheon, Northrop Grumman). Europe is no slouch either, with aerospace leaders like Airbus and critical suppliers like ASML in the Netherlands, which produces the machines that power the global semiconductor industry.
Yes, there’s competition from China. Yes, emerging markets are growing. But if you want quality, trust, transparency, and cutting-edge tech then you’re still looking West.
The West still has its problems. Elections are polarised. Social media amplifies division. But when the world throws up hard tests, like war, pandemics, or financial shocks, Western democracies, while messy, respond well and they adapt.
The same can’t always be said elsewhere. China’s real estate crisis and opaque data, Russia’s war-driven isolation, Turkey’s flawed monetary experiments. There’s innovation and energy in the Global South, but the guardrails aren’t always there.
The West’s strength isn’t just its technology, it’s the institutions, markets, and systems that turn that technology into durable economic value.
The next time someone says, ‘the West is finished,’ ask them to explain why the most sophisticated systems in war, finance, biotech, and AI still have Western flags on them.
Investors must not be fooled by the noise. The West is still best. The tech is real. The innovation engine is alive. Western democracy, while somewhat flawed is still adaptive and is passing the tests that history keeps throwing at it.
We would like to thank Dominion Capital Strategies for writing this content and sharing it with us.
Sources: Bloomberg, Yahoo Finance, Marketwatch, MSCI.
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