For much of the postwar era, the Group of Seven (G7) functioned as the executive board of the global economy. With its members accounting for nearly 70 percent of global GDP at its zenith, the bloc helped steer the course of trade liberalization, financial stability, and institutional reform. Today, that share has dropped below 30 percent. The G7 now speaks for just 10 percent of the world’s population. In terms of economic clout and political legitimacy, its influence is fading—if not yet irrelevant, then certainly more fragile than it once was.

Still, the G7 commands outsized sway, anchored by its dominance over multilateral institutions, deep capital markets, and leadership in advanced technologies. What it lacks is a coherent strategy. As power increasingly shifts toward Asia and the Global South, the G7 faces a pivotal decision: cling to its legacy of Western primacy, or adapt to a world that is more pluralistic, more entangled, and less deferential.

So far, the bloc appears to be hedging—caught between preserving old hierarchies and cautiously engaging with the new order. Take climate policy. Despite grand pronouncements about phasing out fossil fuel subsidies, G7 countries collectively poured $282 billion into such subsidies in 2023 alone. Meanwhile, climate finance for developing countries remains sluggish, unreliable, and well below the oft-repeated $100 billion annual pledge. The result is a credibility crisis, one that feeds suspicions among emerging economies that Western climate initiatives are just veiled industrial policy.

Trade tells a similar story. Once the champions of open markets, the G7 countries have turned inward. “De-risking,” “friendshoring,” and other euphemisms now dominate their policy toolkit. Tariffs are back. So are export controls and state subsidies. The U.S.-China trade war has fragmented supply chains, and intra-G7 spats over digital services, carbon adjustment mechanisms, and electric vehicle subsidies reveal cracks in what was once a relatively unified bloc.

This drift toward economic nationalism carries a clear risk. A G7 ensnared in zero-sum logic—where gains are hoarded, access is rationed, and cooperation is transactional—will struggle to maintain relevance in a global system increasingly defined by shared platforms, open data flows, and cross-border energy transitions.

If it hopes to avoid the margins, the G7 must adopt a win-win mindset—one that treats global prosperity not as a battleground, but as a joint venture. This isn’t sentimentalism; it’s strategic realism.

Start with climate. Rather than offer climate finance tethered to rigid conditions, G7 nations should pursue co-investment models with the Global South. Blended finance, debt-for-climate swaps, and tech transfer agreements could unlock much-needed capital, seed green markets, and ease the geopolitical frictions driven by climate migration and resource scarcity.

In trade, the G7 must resist the urge to retreat behind protectionist walls. Reforming the World Trade Organization, aligning digital trade standards, and integrating developing nations into supply chains—not excluding them—are moves that would bolster both systemic stability and economic competitiveness. Friendshoring doesn’t have to mean fortressing; it can be transparent, inclusive, and anchored in development-sensitive safeguards.

The same principle holds in technology, especially with artificial intelligence. The G7 faces a stark choice: treat AI as a geopolitical weapon or lead the way in establishing inclusive, global governance norms. Yes, the bloc is right to raise red flags about ethical and security risks. But initiatives like the “AI Hiroshima Process” will ring hollow if they remain Western echo chambers. Emerging markets must be brought in not as passive observers, but as active participants—standard-setters, data rights claimants, and innovation partners.

Institutional reform is also overdue. Outreach countries like India, Brazil, South Africa, and Indonesia deserve more than ceremonial invitations. The G7 should formalize their involvement through rotating advisory roles, structured partnerships, and task forces on cross-cutting issues like energy, AI, and pandemic preparedness. Such steps would begin to close the widening legitimacy gap.

Ultimately, the G7’s strength lies less in its formal powers than in its convening capacity. It is small enough to be nimble, wealthy enough to catalyze global action, and seasoned enough to recognize that durable leadership is earned, not assumed. Coalition-building—not control—is the modus operandi that this century demands.

The G7 was founded on a bet: that liberal capitalism, multilateralism, and rules-based order could generate global prosperity. That bet paid off—for a time. The challenge now is not to discard those principles but to reinvent them for a world that is more populous, more contested, and more interconnected than ever.

If the G7 insists on clinging to its old playbook—competing for dominance, rationing influence, and excluding rising powers—it risks becoming a relic of a bygone era. But if it chooses to lead with openness, reciprocity, and shared purpose, it could still remain the table where the world’s most consequential decisions are made.