In collaboration with

Boston Consulting Group

From Blind Spots to Insights:

Enhancing Geopolitical Radar
to Guide Global Business
WHITE PAPER
JANUARY 2025
Images: Getty Images

Contents
Foreword 3

Executive summary 4

Introduction 5

1 What issues are on the geopolitical radar of global business? 7

2 How firms are strengthening their geopolitical radar 10

2.1 
Objectives and tasks 11

2.2 
Tracking geopolitics 11

2.3 
Assessing information 12

2.4 
Public sector best practices and scenarios 13

2.5 
Internal organizational considerations 13

3 Corporate geopolitical radar: an assessment 14

3.1 
Distinguishing the material from the urgent 15

3.2 
The flow of insights and “key person risk” 16

4 Towards better practice 17

5 Payoffs from strengthening geopolitical radar and sonar 20

Conclusion 23

Contributors 24

Endnotes 25

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conclusions expressed herein are a result
of a collaborative process facilitated and
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but whose results do not necessarily
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© 2025 World Economic Forum. All rights
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From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 2
 January 2025 From Blind Spots to Insights:
Enhancing Geopolitical Radar to Guide Global Business

Foreword
David Bach Forecasting the geopolitical events shaping insights from 25 interviews with representatives
President and Nestlé tomorrow’s world is often likened to predicting the from the Forum’s corporate partners.
Professor of Strategy weather: sudden, unpredictable and increasingly
and Political Economy,
disruptive. Military coups, government collapses It is the second in a three-part series designed to
International Institute
for Management
and supply chain disruptions can emerge with little help public and private sector stakeholders better
Development (IMD) warning, leaving just days or weeks to react. understand, respond to and leverage the causes
and effects of disruptions, perturbations and
In an era of rising economic nationalism and reconfigurations that have beset the global trading
Mirek Dusek intensifying rivalries, business leaders with extensive system in recent years.
Managing Director, World
cross-border operations must develop sharper
Economic Forum
agility and foresight. Their ability to make informed The first report focused on the costs of
decisions in this volatile environment hinges on the deglobalization and aspects of cross-border
Nikolaus Lang strength of their so-called geopolitical radar – their corporate footprints and operations. The third report
Managing Director and capacity to effectively track and proactively assess will examine how firms are building their geopolitical
Senior Partner; Global
these shifting dynamics. muscle, including which internal structures they
Leader, BCG Henderson
Institute; Chair, BCG
are adapting, considering or implementing to
Center for Geopolitics, This requires a fundamental shift in mindset from better respond to these disruptions, either by
Boston Consulting Group relying on backward-looking, experience-driven mitigating the risks they present or leveraging the
assessments of geopolitical risks to embracing opportunities they create.
a more forward-looking tracking of geopolitical
dynamics, combined with rigorous scenario We hope the insights and recommendations
planning. With geopolitics playing an increasingly in these papers will help business leaders and
critical role in long-term business success, policy-makers to better navigate the uncertainty
companies must invest in the necessary capabilities and complexity of a new era of geopolitical rivalry
to strengthen their radar. and strategic competition. As the rules-based
order that has underpinned global stability for the
This report is the result of a collaboration between past 70 years faces unprecedented challenges,
IMD, Boston Consulting Group and the World strengthening foresight and adaptability has never
Economic Forum. Its conclusions are based on been more critical.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 3
Executive summary
By shifting from a backward-looking, event-
focused understanding of geopolitical risks
to a forward tracking of relevant dynamics,
companies will be better placed to respond
to challenges and seize opportunities.

The ways in which companies with extensive cross- are not met, the attention given to a geopolitical
border operations are reacting to the intensification factor tends to diminish. This deficiency reflects
of rivalry between governments in a multipolar world the essentially backward-looking and reactive
is of growing importance. Ultimately, the reaction of identification of relevant geopolitical factors.
international businesses will be shaped profoundly
by how corporate executives track and assess Developing geopolitical radar is not in and of
geopolitical dynamics – their so-called geopolitical itself sufficient. Geopolitical sonar is also needed
radar. Based on in-depth interviews with 25 to provide additional context on the drivers
multinational companies, this white paper explores underlying geopolitical events. There is no denying
the extent to which international businesses are that costs are incurred in developing an effective
developing and deploying their geopolitical radar. geopolitical radar and sonar. Rather than seeing
this as a deadweight cost, this report identifies six
Geopolitical radar serves a variety of purposes, commercial payoffs resulting from better navigation
each reflecting a task undertaken within firms. of geopolitical currents.
International businesses have developed near-term
tracking mechanisms, typically identifying relevant Shifting from an experience-driven, backward-
geopolitical factors based on prior experience. looking identification of geopolitical risks to a
Detailed exposure assessments of geopolitical forward-looking tracking of geopolitical dynamics
developments are now standard and such tracking will transform decision-making from reactive to
is complemented by periodic scenario planning proactive. The ability to read geopolitical events at
and consultation with external experts. However, an early stage can generate mitigating measures
international businesses differ in their approaches and business opportunities – but this requires a
towards selecting which internal unit is entrusted deeper appreciation of the drivers of geopolitical
with managing and acting on the insights gained dynamics. Ensuring that a company’s internal
through this geopolitical radar. geopolitical function sets aside legacy attitudes,
supports institutional memory, reduces key person
Corporate geopolitical radar tends to give greater risk and shares information where and when
prominence to state actions that are mandatory, needed can all contribute to efforts by international
require immediate action and are clearly impactful businesses to better capitalize on the opportunities
(for example, compliance with a regulatory that arise as globalization continues to evolve in a
requirement). When any of these three conditions multipolar world.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 4
Introduction
This white paper presents insights from
interviews with senior executives from 25
major businesses from different geographies
and industries, casting light on the current
state of efforts by companies to develop
geopolitical radar.

With no end in sight for growing geopolitical rivalry deem geopolitical. Consequently, there is a strong
and increasing disruption from low-level as well link between geopolitics and international trade,
as kinetic conflict, companies involved in cross- investment, innovation and the movement of data,
border operations and transactions are rapidly people and ideas across borders.
developing the capabilities needed to navigate the
opportunities and risks created by an ever more These interviews, conducted from June to October
fractured world. 2024, form the evidential basis for this white
paper. Experts from IMD Business School, Boston
The starting point varies for each company, with Consulting Group and the World Economic Forum’s
some further along this journey than others. international trade team participated in the interviews,
However, no global business can afford to ignore which were held off-the-record to encourage
geopolitical factors when devising operational candour. To protect confidentiality, this paper does
plans, assessing performance and options, or re- not identify interviewees or their employers.
evaluating strategies for capitalizing on the many
opportunities created by the global economy. This is the second round of interviews conducted
on this subject with executives from international
The purpose of this white paper is to provide a businesses. The first round, involving 13
status report on how firms are enhancing their companies, resulted in a white paper, Geopolitical
detection, understanding and assessment of Rivalry and Business: 10 Recommendations for
the many geopolitical factors that have emerged Policy Design, published by the World Economic
over the past decade. The term “geopolitical Forum in May 2024.1
radar” is used here to capture these tasks and is
distinguished from “geopolitical muscle”, which That initial white paper laid the groundwork by
refers to the translation of geopolitical insights into exploring how executives perceive unfolding
corporate decisions. While a useful organizing geopolitical dynamics and their immediate impact
concept, as will become evident, the concept of a on operations and financial performance, offering
geopolitical radar is not without its flaws. 10 public policy recommendations and eight
suggestions for businesses.
It is difficult to see how international businesses
could make informed decisions without a first-rate This white paper is structured into five chapters:
geopolitical radar. Assessing how companies are
applying their geopolitical muscle will follow in a – Chapter 1 discusses the commonalities and
subsequent report. differences between events, trends and factors
that businesses deem “geopolitical”.
To prepare this white paper, interviews were
conducted with senior corporate executives from – Chapter 2 describes how firms are
25 companies involved in tracking geopolitical strengthening their geopolitical radar.
factors. These companies were selected from
different geographies and industries, and are both – Chapter 3 assesses the state of corporate
publicly listed and private. They share a common progress in these efforts.
characteristic: each has a significant cross-border,
multi-jurisdictional, global commercial footprint and – Chapter 4 lays the groundwork for a discussion
therefore possesses a vested interest in an open on best practice.
world economy.
– Chapter 5 looks at possible payoffs from
The potential for cross-border impacts is a strengthening geopolitical radar and sonar.
recurring characteristic of factors that executives

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 5
 Although building these capabilities entails costs, Although some may question the relevance of
it is worth identifying the commercial benefits that these findings for small and medium-sized firms,
can accrue to companies that are better able to it is worth noting that these companies can share
navigate an increasingly fractured global landscape. the cost of developing geopolitical radar through
business associations and chambers of commerce,
making these insights broadly applicable.

BOX 1 How the interviews were conducted

Each interviewee was sent a set of questions in Interviews can be revealing but they are not
advance, the aim of which was to understand: without their flaws. First, as those interviewed tend
to carry some responsibility for tracking geopolitical
– How a company reflects on recent geopolitical factors, there was a tendency to argue “we’ve got
developments – to elicit which developments it covered.” Few revealed difficulties or deficiencies.
are top-of-mind. Often what was not said in these interviews was as
revealing and important as what was.
– How a company differentiates between
geopolitical factors (if they do so at all) and Second, statements made in interviews cannot be
the steps it is taking to develop its geopolitical verified. Nor was it possible to check whether the
radar – described as “steps to learn more insights gleaned from exercising a corporate radar
about geopolitical dynamics”. were well received or acted upon by others within
the same company. Indeed, one interviewee noted
– Which arguments executives use when that in their company it was accepted at the most
engaging with officials that have concerns senior level that geopolitical risks had important
about economic and national security (if such implications for future sourcing decisions. Yet,
engagement happens at all). no business unit’s plan for the next year made
reference to this matter. Obtaining convincing
Each interview was semi-structured and allowed insights is one thing; acting upon them is another
the interviewee to develop their own considered matter entirely.
responses. The interviews varied in length from
30 to 60 minutes. The individuals interviewed all Overall, these interviews add to the evidential basis
had some responsibilities for tracking geopolitical of how firms are navigating intensifying geopolitical
developments, but this may often be only part rivalry. They do not claim to be the last word.
of their remit. Some interviewees were involved Nevertheless, there is value in asking executives
in compliance functions, some in government to explain what steps they are taking, what their
affairs units and others in corporate strategy information diet is and who uses their analysis and
units. One was a board member, implying that product. In this manner, other companies as well
almost all were in executive roles – including as government officials can better understand how
some at a very senior level. geopolitics is being understood and potentially
acted upon at this time.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 6
1 What issues are on the
geopolitical radar of
global business?
US-China relations and security-related
geopolitical factors are top-of-mind for the
25 corporate executives interviewed.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 7
 Asking corporate executives which geopolitical possible number of mentions is 25 (the total number
factors are top-of-mind can be very insightful. While of firms interviewed).
the broad categories of these factors may not
surprise a well-informed observer, what stands out Of the six commonly identified types of geopolitical
are the attributes of specific factors that executives factors, two involve kinetic conflict, while another
identify as geopolitically relevant. two reflect economic clashes, specifically US-
China relations and national and economic
Our 25 interviewees identified over 80 different security measures. In contrast, changes in political
geopolitical factors that are relevant to their leadership – a traditional corporate political risk
business. They fall into a series of broad categories: – were mentioned only six times. Additionally,
one-quarter of interviewees identified supply chain
– Acts, such as bans on exporting certain disruption and reconfiguration as a distinct category
technologies, regulations on data transfer and of geopolitical factor.
use, cyber-security regulations and consumer
boycotts triggered by continued commercial What to make of these groups and the factors
presence in Israel. underlying them? The groups are certainly
not MECE (mutually exclusive and collectively
– Events, both actual and potential, such as the exhaustive). Deteriorating relations between China
trade disputes between the US and China, the and the US, plus the legacy of the Covid-19
2024 “year of elections”, or a potential conflict in pandemic and the importance of certain critical
the Sea of Japan. minerals (such as rare earths), may well have
increased mentions of economic security measures.
– Drivers of geopolitical events, including In all likelihood, so did the Russian invasion of
greater polarization in certain nations’ politics, Ukraine.
nationalism and the transition to clean energy.
The time when those headwinds started being
– Trends, such as supply chain reconfiguration, acted upon varied among interviewees. One Asia-
Only two
localization pressures and the rise of China. based interviewee highlighted as late as 2023 as
interviewees did the pivotal year when their company started to
not cite relations Figure 1 identifies six groups of frequently assess a supply chain diversification plan – with
between China and mentioned geopolitical factors and how often some thinking done before then, but no action
the US as a top-of- they were mentioned by our interviewees. Only taken. Another EU-based interviewee cited the
mind geopolitical two interviewees did not cite relations between invasion of Ukraine as the wake-up call, while a
development. China and the US as a top-of-mind geopolitical company in the trading sector cited Covid-19 as
development. Bear in mind that the maximum the gamechanger.

FIGURE 1 Number of mentions by interviewees of different geopolitical factors

Conflict in Gaza and 4

related matters

Supply chain disruption 6

and reconfiguration

Elections and other changes 6

in political leadership

Russia-Ukraine conflict 16

National security and 19

economic security measures

US-China relations 23

0 5 10 15 20 25

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 8
A US-based interviewee, in turn, cited the Evidently, the fact that elections and changes of
beginning of the first Trump administration as government are on the list of commonly mentioned
the moment of awakening, when the US shifted geopolitical factors implies that a quarter of
from an approach of looking to “create a set the companies interviewed view this traditional
of rules without China, but with China on your corporate political risk as a form of geopolitical
mind, so then China could join” (the Trans-Pacific risk. In turn, this raises questions about the
Partnership being a case in point) towards boundaries between both categories of risk, not
the much more combative approach that has that this fazed many interviewees.
prevailed over the past eight years.
Moreover, not every geopolitical factor identified
Perhaps the principal takeaway from Figure 1 in the interviews is associated with state action.
is that security-related geopolitical factors are Consumer boycotts and Houthi rebel attacks
top-of-mind for the corporate executives on shipping in the Red Sea are examples where
interviewed here. That the shadow of security non-state actors are significant factors. Several
concerns now looms larger over the commercial interviewees pointed out the reputational risks
policies of many governments has not been lost that corporate action or inaction can generate as
on global companies. geopolitical events unfold.

The interviewees’ responses suggest that security Interestingly, state motives were not often explicitly
concerns involve a wide range of policy imperatives. mentioned by interviewees (perhaps they may have
These include: thought such motives were obvious). Still, the idea
that a government might act to advance its position
– Assuring supply of certain items and relative to another government – even if that meant
commodities. the former damaging some of its commercial
interests – was consistent with a number of the
– Associated worries about “economic coercion” geopolitical actions mentioned in the interviews.
and the desire for “strategic autonomy”. Bans on technology exports and overseas
investment screening typically involve some
– Measures that seek to prevent potential commercial sacrifice in the pursuit of other goals.
combatants from securing technologies that
could have military use. What was common to almost all, if not every,
geopolitical factor mentioned is that there are cross-
– Concerns about preserving technological border consequences related to the associated
supremacy or narrowing gaps in capabilities actions, events and trends. Those consequences
where they exist. could implicate foreign firms operating within a
jurisdiction where a state takes action. Alternatively,
For better or worse, interviewees recognized that there may be investor, consumer or other
officialdom increasingly perceives links between stakeholder blowback against a decision a global
economic and national security considerations. business has taken in a market abroad.

Still, it would be inaccurate to argue that Drawing the findings of this section together
international business has a single notion of what suggests the following: a working definition of a
constitutes a commercially relevant geopolitical geopolitical factor relevant to international business
factor. For example, several interviewees refused is an “act, event, driver or trend where there are
to be drawn on classifying what was and was both security and cross-border dimensions that
not a geopolitical risk. “Risk is risk” was how one are likely to have material consequences on some
interviewee put it. This attitude may reflect the aspect of commercial performance.” Implicit in this
diverse set of geopolitically linked disruptions to working definition is that the triggers for geopolitical
commercial operations witnessed in recent years. factors are external to a firm, even if a firm’s prior
choices affect its exposure to such factors.

Working definition of a geopolitical factor relevant to international business

“An act, event, driver or trend where there are both security and cross-border dimensions that are likely
to have material consequences on some aspect of commercial performance.”

Given the many different ways in which international economic or national security considerations may
business takes advantage of the opportunities act as something of a filter, as will the current and
of globalization, this working definition implies planned operations of a given business, together
that there are many different developments that with its geographical footprint.
in principle a geopolitical radar could track. Still,

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 9
 2 How firms are
strengthening their
geopolitical radar
Tracking geopolitical risks can be
outsourced, but translating that information
into the “so what?” is a critical and highly
company-specific task that must be
entrusted to the right business function.

US export That geopolitics can have a material impact on Seeking to avoid such losses requires the
restrictions companies with cross-border operations is no development of a geopolitical radar and the muscle
on certain longer contested. An April 2024 study by analysts to make use of the insights generated. The former
technologies wiped at the Federal Reserve Bank of New York found that is an essential input to the latter. The focus of
US export restrictions on certain technologies had this white paper is on the ways in which firms are
$130 billion off
wiped $130 billion off the stock market valuations strengthening their detection, understanding and
the stock market
of affected American suppliers.2 Their employment assessment of the many geopolitical factors that
valuations of and profitability also fell. have surfaced over the past decade. The way in
affected American which firms utilize these inputs and turn them into
suppliers. geopolitical muscle will be addressed in a planned
third report in this series of white papers.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 10
 2.1 
Objectives and tasks

Interviewees were asked to describe how they – Review and reformulate corporate strategy, in
currently track geopolitical developments, identify light of geopolitical insights.
key decision points and explain how their tracking
methods have evolved over time. Looking across – Include geopolitical insights as an input to the
sectors and geographies, international businesses performance review by the corporate board.
have distinct purposes and tasks in mind when
developing their geopolitical radar. Within One task notably absent from all but one
companies, executives typically undertake at least interviewed company’s list was predicting specific
eight such tasks: geopolitical events, a goal widely considered too
ambitious. To adapt General Eisenhower’s famous
– Ensure compliance with existing sanctions, quote about planning: “prediction is useless, but
export controls and other regulations. estimates are indispensable.”

– Assess current exposure to geopolitical Indeed, it was noteworthy that a few interviewees
contingencies. made explicit reference to the practices of
government intelligence communities in guiding the
– Identify mitigation steps for certain defined development of their own tracking and geopolitical
geopolitical contingences. radar. The notion of preparing “estimates” is a well-
developed practice in several intelligence agencies.
– Execute mitigation measures when
contingencies come to pass. To understand how firms are developing their
geopolitical radar, it is useful to distinguish between
– Conduct enterprise risk management initiatives, their methods for tracking and assessing relevant
in light of geopolitical insights. information, be it for near-term tracking or longer-
term trend and scenario assessment. A frequent
– Carry out war-gaming and scenario planning feature of the interviews was a discussion of
exercises on potential geopolitical events. the merits of outside support versus in-house
capabilities to support (part of) these functions.

2.2 
Tracking geopolitics

All firms interviewed have some in-house staff expertise and networks, especially in areas where
and/or advisors tasked with tracking geopolitical the firm does not believe that it has adequate depth
developments. The calendar for certain events – in its own in-house capabilities. Think tanks were
such as elections and the campaigns that precede mentioned as useful sources, providing a bridge
them – are known in advance and, where material, to government and thus enabling companies to
tend to be tracked. The run-up to the US presidential understand the policy-making agenda. Many of
election in November 2024 was a case in point. the companies interviewed stated a preference for
engaging directly with government to understand
Most interviewees agreed that a wide range of and even align with its policy agenda.
information sources – beyond mainstream and
English-speaking media – is necessary to develop A few interviewees mentioned frequent exchanges
a holistic picture of the geopolitical landscape and with the national security community, including
avoid selection bias. Local media across markets, international and intergovernmental organizations
A wide range podcasts and even fiction were mentioned as (e.g. NATO) to detect emerging risks. One point
of information potential sources and inspiration. mentioned a few times is that policy-makers value
sources – beyond industry insights and data that companies possess
mainstream Some mentioned local offices as important and are therefore willing to engage in dialogue.
and English- sources of intelligence, especially in key markets That said, more than one interviewee cautioned
speaking media for a firm. Customers and other stakeholders can against placing too much emphasis on contacts
be important sources too. One consumer-facing with senior policy-makers. While attention from the
– is necessary
company went as far as to emphasize the need latter may be flattering, it was argued that officials
to develop a to track consumer sentiment across markets, to are not disinterested parties and they may shade
holistic picture of identify potential reputational issues stemming from various outcomes and their consequences in a
the geopolitical geopolitical developments. more favourable light than may be the case.
landscape and
avoid selection In addition, engaging outside consultants and The importance of corroboration of information
bias. experts has become standard to leverage their was stressed. In terms of the language of the

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 11
 intelligence community, both HUMINT (the business units and regional organizations, as well
collection of information from human sources) and as at the group level. As a result, there appears
OSINT (generally available open-source intelligence) to be a risk that companies focus on a narrow set
should be deployed to corroborate, as best as of immediate issues and eventually lose sight of
possible, any findings or insights. longer-term trends in geopolitics.

From this information diet, a few interviewees One interviewee from the logistics supply chain
have developed categories of geopolitical risks highlighted that “in geopolitics you need to think
– although, as explained further above, there global but act local”, while on the other hand
is a wide range of approaches to categorizing another executive emphasized the need to move
geopolitical issues based on geographical, towards greater horizon-scanning capabilities.
functional or other factors. A few interviewees noted that forward-looking
considerations tend to be incorporated when
For companies, the focus of tracking geopolitical there are lengthy planning and investment
developments appears heavily influenced by prior horizons. For example, one investment
experience of an international business. Within house noted that decades-long cross-border
their own industries, compliance with certain investments in certain economies require an
sanctions and regulations – and coping with the assessment of how any given investment might
episodic disruption of supply chains and operations be perceived in the future by governments in rival
in recent years – has revealed to executives the jurisdictions. Such longer-term information tends
points of vulnerability or choke points of individual to be collected on an ad hoc basis.

2.3 
Assessing information

There are differences in how companies assess Exposure assessments are central to evaluating
and internally communicate geopolitical insights. what is at stake as a geopolitical dynamic unfolds.
Translating information into the “so what?” for a These assessments involve financial estimates of
company is critical in this process. There is a widely likely impact as well as consequences for current
held view that external consultants can provide operations in affected geographies and business
assessments of events as well as current and units. Again, the purpose here is not exact
future decisions. But several interviewees noted prediction. What matters here is scaling the impact
that, unless furnished with the relevant information, correctly. Does the fallout from a geopolitical
external experts may not be in a position to draw event have a seven-digit, eight-digit or nine-
out detailed implications of geopolitical factors for a digit consequence for a business if no mitigating
company’s current operations and performance. measures are taken?

Therefore, undertaking detailed assessments Some interviewees noted the importance of

What matters of the relevance of this rich information diet for bringing the relevant people from across the firm
here is scaling the a company is a critical task. Many interviewees together to assess impacts. Approaches in this
impact correctly. stressed that it should not be outsourced. Internal regard range from establishing dedicated teams or
Does the fallout assessments of the exposure of a company’s working groups to holding frequent risk committee
current operations to geopolitical factors are now meetings dedicated to geopolitics. This stresses
from a geopolitical
standard fare. These are “as is” assessments, the notion – already evident – that there is no one-
event have a
that is, considering the impact of an external size-fits-all solution in terms of how companies
seven-digit, eight- geopolitical development on the performance of implement and operationalize their geopolitical
digit or nine-digit a business unit (or units) assuming no change in radars. Companies tend to find different avenues in
consequence for the modus operandi. The consistent application terms of structure to capture geopolitics, one not
a business if no of methods for determining impact is regarded as necessarily being more efficient than the other, but
mitigating measures crucial by those interviewees who put more store in just more fitting to the organization’s culture and
are taken? exposure assessment. operational anatomy.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 12
 2.4 
Public sector best practices and scenarios

Companies are increasingly moving to adopt Another interviewee emphasized the importance
methods that governments have employed for of articulating underlying assumptions, thinking
years, especially for assessing the longer-term through possible sequences of outcomes and
implications of geopolitical trends. Several moves and associated feedback loops and then
interviewees reported that their companies assessing plausibility. Yet another interviewee
undertake scenario planning initiatives. Some called for imagination in identifying scenarios,
acknowledged that they emulate the better which should draw from a wide range of sources,
practices of scenario planning employed by including fiction.
governments, international organizations and
leading independent experts in the field. Scenario planning initiatives were complemented
by strategic simulations of specific contingencies,
One interviewee noted that their company most notably assessing the impact of a potential
deploys an “iceberg model” to differentiate conflict in the Taiwan Strait. Identification of
between geopolitical drivers and events with an emergent challenges through horizon-scanning is
eye to identifying possible “no regret moves”, another tool mentioned by one interviewee.
in addition to informing strategy development.

2.5 Internal organizational considerations

The companies interviewed differ in the degree carries the risk that the inherited practices and
to which insights gleaned from exposure analysis contacts of that unit unduly influence which factors
and tracking are internally communicated and get tracked, which third parties get consulted and
preserved for future recollection. Effective internal the conduct of exposure assessments.
communication of geopolitical assessments
has been raised as an important factor in the For example, in some cases compliance teams
risk management process. Some companies can be blind to the opportunities created by
use regularly recurring (e.g. quarterly) reporting geopolitical events, focusing instead on adherence
cycles to inform management about geopolitical to existing sanctions regimes and the like. Equally,
issues potentially affecting the firm. Others noted centralized corporate strategy teams may not
that insights tend to be shared among ad hoc have access to the granular data on sourcing
networks of executives interested in geopolitics. practices, for example, that allows for effective
Membership of such networks ebbs and flows. exposure assessment.
Some companies also integrate the longer-term
geopolitical scenario planning directly into the When a dedicated team is established to manage
strategy development process. the geopolitical radar, identification of relevant
geopolitical factors will still involve others within the
Few of the companies interviewed have already company, such as when the CEO meets senior
established information systems that store both politicians or when managers in national business
tracked developments and the assessment of units engage with stakeholders far from the company
them. In other cases, institutional memory effectively headquarters. This in turn requires an understanding
depends on the retention of individual team members. that associated insights should be shared. The
dedicated team may also provide guidance as to
The unclear boundary between geopolitical which factors to keep an eye out for. The execution
The unclear factors in particular and corporate political risk in of the geopolitical radar of an international business
boundary between general has raised important questions for who is is inherently a joint responsibility.
geopolitical factors ultimately assigned responsibility for operationalizing
and corporate a company’s geopolitical radar. Our interviews The relationship between the tracking and
political risk has revealed tracking and assessment of geopolitical assessment of geopolitical factors and a company’s
factors being undertaken by compliance teams, enterprise risk management (ERM) system was
raised important
corporate strategy teams, government affairs mentioned in several interviews. Given the former’s
questions for
teams, sourcing departments and legal functions, salience in recent years, it is not surprising that
who is ultimately as well as by teams dedicated to assessing certain multinationals now include geopolitical risk in
assigned geopolitical factors, again attesting to a multiplicity their ERM. However, concerns were expressed that,
responsibility for of approaches rather than a universal practice. all too often, those responsible for ERM are more
operationalizing comfortable with directly quantifiable risks (such as
a company’s When a dedicated team is not created, assignment certain financial risks) and that geopolitical factors
geopolitical radar. of the geopolitical radar to an established unit are less amenable to such quantification.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 13
3 Corporate geopolitical
radar: an assessment
Too much focus on the urgency of present
events can mask deeper insights into
geopolitical drivers and trends with a more
material impact on risks and opportunities.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 14
 3.1 Distinguishing the material from the urgent

Not all analysts of international business and led to an elevated awareness of the importance of
geopolitical dynamics will agree with Dwight geopolitics for business, which is expected to last for
Eisenhower’s statement that “what is important the foreseeable future. The executives interviewed
is seldom urgent and what is urgent is seldom acknowledged that their companies are on a journey,
important.” However, reflecting on the interview with no illusions about the challenges involved.
responses, this distinction proves useful.
The respective corporate geopolitical radar of the
Before discussing concerns about the current various businesses interviewed tend to prioritize
state of corporate geopolitical radar, it is important state actions that are mandatory, require immediate
to recognize the significant strides forward that action and are clearly impactful. When any of
international businesses have made in recent years these three conditions are absent, the attention
to strengthen their geopolitical capabilities. The given to a geopolitical factor often diminishes.
US-China trade disputes, the Covid-19 pandemic Figure 2 captures this insight, identifying state acts
and Russia’s invasion of Ukraine, in particular, have associated with varying circumstances.

FIGURE 2 Geopolitical radar: better at tracking material and urgent geopolitical factors

4
Harder to spot

Salient & material 2

Action now More choice

Action later Little choice

1 Immediate export ban 2 Potential export ban 3 IRA subsidies 4 Murky financial support Radar weakens

Note: IRA = US government’s Inflation Reduction Act of 2022. Murky financial support = non-transparent state support

Applying a restrictive compliance mindset to their geopolitical radar not only to manage risks, but
Applying a developing a geopolitical radar risks missing also to harness commercial opportunities.
compliance opportunities arising from industrial policy subsidies,
mindset to which may be available for years, as with certain After more than a decade of international
provisions in the US Inflation Reduction Act. The businesses facing events such as the US-China
developing a
less transparent (or “murkier”) the state support, the trade disputes, the demand and supply shocks
geopolitical radar greater the likelihood that significant competitive caused by Covid-19 and the fallout from the
risks missing advantages for rival firms may be overlooked. 2022 Russian invasion of Ukraine, the focus on
opportunities In such cases, state actions may not require an mandatory, immediate and prominent actions is
arising from urgent response but are likely to be commercially understandable. However, this experience-driven
industrial policy important, nonetheless. This reality demonstrates approach is inherently backward-looking and may
subsidies. the point that successful firms are able to deploy inadvertently create blind spots. Furthermore, the

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 15
 experiential focus on high-profile events may leave foundational factors behind geopolitical disruptions.
limited bandwidth for understanding the underlying This focus on the “here and now” narrows both
drivers of geopolitical circumstances. the identification of and response to relevant
geopolitical risks, as well as the willingness to
One interviewee mentioned that the quarterly allocate resources and management time to
reporting cycle for their publicly listed company understanding future dynamics.
reduces the appetite for considering emerging or

3.2 The flow of insights and “key person risk”

The companies interviewed varied in the extent to inventorying and assessing geopolitical factors.
which their geopolitical radar serve relevant parties This shortfall leads to a reliance on key personnel
within the organization. In some companies, the for contextualizing developments, which creates
insights generated by their radar are well-integrated “key person risk”. Such individuals may become
into sourcing, strategy, contingency planning and bottlenecks when handling requests from across
evaluation functions across business units and at the organization – or take their knowledge with
the group level. In these cases, information and them when they leave the firm.
insights flow both ways between those managing
the geopolitical radar and other executives. In other The absence of an inventory also hampers the
companies, tracking of geopolitical events is more identification of emerging patterns across markets,
siloed, driven by the specific needs of the unit potentially overlooking risk mitigation opportunities.
responsible for the task. The departure of key individuals from a company
further undermines institutional memory and
Few of the companies interviewed have the ability to navigate an increasingly complex
invested in information systems that allow for geopolitical landscape.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 16
4 Towards better practice
Given the impact that geopolitical dynamics
are having on long-term value, business
leaders must invest in capabilities to analyse
not only events but the trends driving them.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 17
 Cutting-edge companies devote considerable move towards a more active approach and invest in
resources to future-proofing their client offerings, the necessary capabilities.
cultivating a deep understanding of the drivers of their
customers’ needs and developing value propositions The notion of a geopolitical radar indicates in
that enable them to create and capture commercial part where the opportunities exist to adopt better
value. They also invest in the development of internal practice. Radar is effective at detecting events
capabilities and core competencies to safeguard the above the water. An effective radar enables
future of their business. executives to navigate geopolitical icebergs, as one
of the interviewees asserted. A well-functioning
While considerable progress has been made over radar should provide warnings of imminent incoming
the past decade, international business is still threats. But while informed by the past, radar
generally reactive to geopolitical dynamics. Now typically focuses on current developments. Unless
that these dynamics can have first-order effects on steps are actively taken, institutional memory is
a firm’s long-term success, the time has come to weak, exacerbated by key person risk.

FIGURE 3 Geopolitical radar only takes companies so far – sonar is also needed

Acts and events Geopolitical radar

e.g. economic coercion, use of export controls,
financial sanctions and the CHIPS Act

Track what? Track how?

Drivers and trends Geopolitical sonar

e.g. contest for primacy, political polarization,
historical grievances

Worse, radar rarely reveals what is going on below Some of our interviewees acknowledged the
the water’s surface. In our context, what this means need for a more rounded world view and pointed
is that the root causes of geopolitical dynamics may to certain appointments to their corporate board
not even be identified, let alone their commercial as a way to strengthen internal competencies.
consequences assessed. Not every driver of No doubt such expertise adds value but again,
geopolitical events is slow-changing but many are individuals and HUMINT should not substitute for
(such as the factors responsible for manufacturing sound process and actively tapping OSINT and
job losses in many economies). International other forms and sources of intelligence. These are
business needs to augment its geopolitical radar complements, not substitutes.
with a geopolitical sonar, to continue the nautical
analogy (see Figure 3). Other interviewees highlighted the need for agility
in assessing geopolitical dynamics. Structured
Leaving consideration of the drivers of geopolitical monitoring of pre-selected geopolitical risks based
dynamics to (at best) periodic scenario planning on previous episodes of disruption may, if done
initiatives does not cut it. Developing a succinct correctly, reveal valuable information in a timely
“world view” on these drivers, based on manner. However, backward-looking identification
investments in internal capabilities and expertise of relevant risk increases the likelihood of being
and on externally sourced insight, is at a premium. blindsided. A geopolitical sonar that surfaces
insights into drivers of events constitutes a more
supportive, agile response.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 18
 A geopolitical In this direction, some companies are moving to security considerations will reshape the commercial
sonar that surfaces integrate more information and real-time data into landscape in nations, regions and worldwide.
insights into their processes. The increasing use of analytics Critical assumptions ought to be scrutinized. While
drivers of events tools can help establish “corporate situation rooms” it is unrealistic to expect to eliminate all sources
that support the monitoring and anticipation of of surprise, better grounded assumptions surely
constitutes a more
relevant geopolitical developments. Innovative and diminish rude awakenings.
supportive, agile
high-quality data can inform the decision-making
response. process and also foster outside-the-box thinking. Although our interviewees put a lot of weight on
geopolitical developments related to unfolding
As with its radar counterpart, geopolitical sonars are great power rivalry, economic and national
evidently context-specific. They should be developed security drivers of policy and the fallout from
with current and planned or likely lines of business kinetic conflict, looking ahead it is conceivable
and geographical footprint in mind. In this manner, that climate and weather-related factors – think
the root causes of geopolitical dynamics can inform water scarcity for example – become recognized
the classic international business decisions relating to drivers of geopolitics. A well-functioning geopolitical
“where to play” and “how to play.” sonar should factor in these considerations when
developing detailed insights to inform corporate
Development of a geopolitical sonar will bring to decision-making.
the surface assumptions being made about how

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 19
5 Payoffs from
strengthening
geopolitical radar
and sonar
Geopolitics is not all downside risk: building
an effective geopolitical radar and sonar
can lead to big wins and performance gains
over the short, medium and long term.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 20
 Developing an effective geopolitical radar and company, they expect that innovations introduced
sonar involves costs. Rather than viewing these in one market may be successfully adapted to
as deadweight expenses or, conversely, simply others – the third potential payoff.
branding them as “investments,” it is worthwhile
reflecting on the payoffs to international Geopolitically motivated state actions targeting
business from better navigating geopolitical particular firms or countries create opportunities
currents (see Table 1). for rivals. Once sanctioned, a firm’s customers
may shun that company and seek alternative
Insights from our interviewees highlight that suppliers, benefiting its competitors. A few
While risk geopolitical dynamics often create commercial interviewees reported that their companies have
mitigation and opportunities. This points to a shift in the role of profited this way – the fourth potential payoff. This
compliance remain teams dealing with geopolitical issues. While risk dynamic applies equally to talent and suppliers, as
mitigation and compliance remain important tasks, geopolitical rivalry can shape which companies are
important tasks,
geopolitical insight is increasingly sought to inform more or less desirable as employers and buyers.
geopolitical insight corporate growth and business development Previously unattainable merger and acquisition
is increasingly strategies. The payoffs from geopolitical radars targets may become available as firms grapple
sought to inform and sonars seem to be rising in this new with geopolitics.
corporate growth environment and can also serve as an internal
and business bridge to further highlight the relevance of such The imposition of financial sanctions and measures
development. teams within the firm’s structure. affecting digital assets has also created demand for
alternative commercial solutions. One interviewee
The first payoff emerges during the implementation noted that the goal is not to evade sanctions but
of risk mitigation measures: geopolitical to offer legal workarounds for customers seeking
assessments may prompt a fresh look at options to limit exposure to certain financial counterparties
previously overlooked. For instance, today’s and systems. In a related example, companies
premium on reliable delivery by suppliers can prohibited from buying specific technologies, parts
broaden sourcing choices. Decisions are less often or components may respond by creating their own
made solely on price, making higher-cost suppliers substitutes or vertically integrating with remaining
in friendly or non-aligned locations attractive as accessible suppliers. These actions are informed
diversification options for firms’ supplier bases. by a well-functioning geopolitical radar and sonar
supporting a fifth potential commercial payoff.
Companies are also discovering underserved
customer segments – and possibly developing Several interviewees argued that security-related
countries that had not been served at all – as geopolitical considerations offer opportunities for
attractive business opportunities. Previous decisions closer collaboration with government officials – a
to concentrate sales efforts in large, established sixth potential payoff. Benefits here include more
foreign markets may no longer be prudent. For opportunities to influence the implementation of
example, international businesses are exploring regulations and the design of emerging restrictions
ways to replace sales lost due to the US-China and requirements. Another avenue is participation
trade disputes. Growth outcomes and potential in in industrial policies to support private sector
underserved markets may create new opportunities development in geopolitically sensitive technologies
for profitable market entry, with effective and sectors. Robust internal capabilities enable
geopolitical capabilities supporting customer base firms to better assess governmental geopolitical
diversification. This is the second payoff. priorities and position themselves accordingly.

One interviewee noted their company’s increased In addition to highlighting the potential payoffs
emphasis on localization strategies. This involves from building an effective geopolitical radar and
not only local sourcing and broadening customer sonar, these examples serve to reinforce the point
bases, but also developing new products tailored that, as far as international business is concerned,
to specific geographic needs. As a global “geopolitics” is not all downside risk.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 21
 TA B L E 1 Six potential payoffs from building an effective geopolitical radar and sonar

Type of activity Payoff / Opportunity

1 Geopolitical risk mitigation Diversification of suppliers in more friendly or non-aligned locations

2 Replacing sales lost due to Discovery of new underserved markets supporting customer base diversification
trade wars

3 Increased focus on Development of local sourcing but also new products tailored to specific geographic needs, which could
localization be adapted to other markets

4 Reaction to sanctioned Opportunity for a rival to take sanctioned firm’s business, talent & suppliers – or acquire that firm
firms or countries

5 Reaction to sanctioned Creation of own substitutes or vertical integration with remaining accessible suppliers
technologies or components

6 Managing security-related Closer collaboration with government, with opportunity to influence design & implementation of regulations
risks & industrial policies

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 22
Conclusion
Companies with significant cross-
border operations have a vested
interest in strengthening their
capacity to understand both the
risks and opportunities presented by
unfolding geopolitical dynamics.

There is considerable interest in how firms with Looking forward, companies should take several
extensive cross-border operations are reacting to important steps. Moving from an experience-
the intensifying rivalry between governments in a driven, backward-looking identification of
multipolar world. Understanding how international geopolitical risks to forward-focused tracking of
businesses seek to capitalize on opportunities in geopolitical dynamics will shift decision-making
a global economy shaped by increasing security from a reactive to a proactive posture – and could
considerations is of interest not only to corporate create significant opportunities. Achieving this will
executives but also to analysts, officials and critical require a deeper understanding of the drivers of
stakeholders, such as customers and investors. such geopolitical dynamics.

Ultimately, the response of international Ensuring that the internal geopolitical function
businesses will be shaped by how corporate overcomes legacy attitudes, supports institutional
executives track and assess geopolitical dynamics. memory, reduces key person risk and facilitates
This white paper has focused on how firms are timely information sharing will enable international
developing their geopolitical radars and why they businesses to better capitalize on opportunities
also need geopolitical sonars. Geopolitical muscle as globalization continues to evolve within a
is essential for deriving actionable insights from multipolar world.
these dynamics; but this muscle requires sufficient
input, which this white paper addresses. Ultimately, it is the actions that companies take
that determine the extent to which they can build
On the whole, international businesses have taken competitive geopolitical advantage and seize
great strides over the past decade to reduce new opportunities in this increasingly complex
geopolitical blind spots and improve their capacity geopolitical environment. Geopolitical muscle
to understand unfolding geopolitical dynamics. is needed to turn insights into actionable and
Companies with significant cross-border successful business strategies. This will be
operations have a vested interest in continuing this examined in greater detail in the next instalment in
journey – not only defensively but also to identify this white paper series.
the commercial opportunities that a well-executed
internal geopolitical function can uncover.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 23
Contributors
Lead contributor Additional contributors

Simon J. Evenett Cristián Rodriguez Chiffelle

Professor of Geopolitics and Strategy, Partner and Director, Trade, Investment and
International Institute for Management Geopolitics, Boston Consulting Group
Development (IMD),
Co-Chair, Global Future Council on Trade and Simon Lacey
Investment, World Economic Forum Head, Digital Trade and Geopolitics, World
Economic Forum

Acknowledgements
David Bach Nikolaus Lang
President and Nestlé Professor of Strategy and Managing Director and Senior Partner; Global
Political Economy, International Institute for Leader, BCG Henderson Institute; Chair, BCG
Management Development (IMD) Center for Geopolitics, Boston Consulting Group

Richard E. Baldwin Patrick McMaster

Professor of International Economics, International Early Career Professional, International Trade and
Institute for Management Development (IMD) Investment, World Economic Forum

Sean Doherty Fernando Martin

Head, International Trade and Investment, World Head of Analytics, Global Trade Alert
Economic Forum

Thomas Gratowski
Insights Director, Center for Geopolitics, Boston
Consulting Group

Production
Albert Badia Costa Jonathan Walter
Designer Editor

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 24
 Endnotes
1. Evenett, S. and Ruge, N. (2024). Geopolitical Rivalry and Business: 10 Recommendations for Policy Design. World
Economic Forum. https://www3.weforum.org/docs/WEF_Geopolitical_Rivalry_and_Business_2024.pdf.
2. Crosignani, M. et al. (2024). Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls. Federal Reserve Bank
of New York, Staff Reports, No. 1096 April 2024; revised November 2024. https://www.newyorkfed.org/medialibrary/
media/research/staff_reports/sr1096.pdf?sc_lang=en.

From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 25
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