Building Geopolitical Muscle 2026

Introduction Interviews with senior executives from more than 55 global businesses inform a pragmatic toolbox to build geopolitical capabilities. IMF Global World Uncertainty Index (WUI) and World Trade Uncertainty Index (WTUI) (January 2008–August 2025) FIGURE 1 0k20k40k60k80k100k120k 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 WUI WTUIGreat financial crisisEU sovereign debt crisisUS electionsTrade tensions COVID-19 Russian invasion of UkraineUS election, trade wars and geopolitical risk Brexit Note: WUI is computed by counting the % of the word “uncertain” (or its variant) in the Economist Intelligence Unit country reports. The WUI is then rescaled by multiplying by 1,000,000. A higher number means higher uncertainty and vice versa. Source: Ahir, H., Bloom, N., & Furceri, D. (2022, February), The World Uncertainty Index, National Bureau of Economic Research1 In 2025, global uncertainty reached a 20-year peak (Figure 1), more than four times higher than during the global financial crisis and around 50% above COVID-19 levels. This uncertainty is deeply felt in the business community. In April 2025, 82% of chief economists surveyed by the World Economic Forum characterized current levels of uncertainty as “very high”, and 45% expected this uncertainty to remain unchanged or increase in the year ahead.2 In August 2025, they were asked to assess the scale and duration of disruption from multiple sources (Figure 2). Two stood out as undergoing the most profound and structural transformation: trade and global value chains; and international economic institutions.3 Throughout this paper, geopolitics (or geoeconomics, as some executives prefer) is defined as “An act, event, driver or trend that has cross-border and security dimensions likely to impact materially commercial performance.”4 Such acts are typically undertaken by governments, but, as the attacks on shipping in the Red Sea have shown, non-state actors can take geopolitical actions as well. Geopolitics is both pervasive and persistent. It is globally relevant because the direct or indirect effects of major geopolitical developments are now felt across all regions. The top factors cited by companies interviewed for this study were: US policy volatility and tariffs; the Russia–Ukraine war; US–China rivalry; and European competitiveness. As one executive remarked, “Being global used to be an advantage, now it’s becoming a risk.” It is likely to remain persistent because the fiscal pressures created by high and growing fiscal deficits in major economies, notably the US, will make tariff revenues politically difficult to unwind. Building Geopolitical Muscle: How Companies Turn Insights into Strategic Advantage 5