From Blind Spots to Insights 2025

Developing an effective geopolitical radar and sonar involves costs. Rather than viewing these as deadweight expenses or, conversely, simply branding them as “investments,” it is worthwhile reflecting on the payoffs to international business from better navigating geopolitical currents (see Table 1). Insights from our interviewees highlight that geopolitical dynamics often create commercial opportunities. This points to a shift in the role of teams dealing with geopolitical issues. While risk mitigation and compliance remain important tasks, geopolitical insight is increasingly sought to inform corporate growth and business development strategies. The payoffs from geopolitical radars and sonars seem to be rising in this new environment and can also serve as an internal bridge to further highlight the relevance of such teams within the firm’s structure. The first payoff emerges during the implementation of risk mitigation measures: geopolitical assessments may prompt a fresh look at options previously overlooked. For instance, today’s premium on reliable delivery by suppliers can broaden sourcing choices. Decisions are less often made solely on price, making higher-cost suppliers in friendly or non-aligned locations attractive as diversification options for firms’ supplier bases. Companies are also discovering underserved customer segments – and possibly developing countries that had not been served at all – as attractive business opportunities. Previous decisions to concentrate sales efforts in large, established foreign markets may no longer be prudent. For example, international businesses are exploring ways to replace sales lost due to the US-China trade disputes. Growth outcomes and potential in underserved markets may create new opportunities for profitable market entry, with effective geopolitical capabilities supporting customer base diversification. This is the second payoff. One interviewee noted their company’s increased emphasis on localization strategies. This involves not only local sourcing and broadening customer bases, but also developing new products tailored to specific geographic needs. As a global company, they expect that innovations introduced in one market may be successfully adapted to others – the third potential payoff. Geopolitically motivated state actions targeting particular firms or countries create opportunities for rivals. Once sanctioned, a firm’s customers may shun that company and seek alternative suppliers, benefiting its competitors. A few interviewees reported that their companies have profited this way – the fourth potential payoff. This dynamic applies equally to talent and suppliers, as geopolitical rivalry can shape which companies are more or less desirable as employers and buyers. Previously unattainable merger and acquisition targets may become available as firms grapple with geopolitics. The imposition of financial sanctions and measures affecting digital assets has also created demand for alternative commercial solutions. One interviewee noted that the goal is not to evade sanctions but to offer legal workarounds for customers seeking to limit exposure to certain financial counterparties and systems. In a related example, companies prohibited from buying specific technologies, parts or components may respond by creating their own substitutes or vertically integrating with remaining accessible suppliers. These actions are informed by a well-functioning geopolitical radar and sonar supporting a fifth potential commercial payoff. Several interviewees argued that security-related geopolitical considerations offer opportunities for closer collaboration with government officials – a sixth potential payoff. Benefits here include more opportunities to influence the implementation of regulations and the design of emerging restrictions and requirements. Another avenue is participation in industrial policies to support private sector development in geopolitically sensitive technologies and sectors. Robust internal capabilities enable firms to better assess governmental geopolitical priorities and position themselves accordingly. In addition to highlighting the potential payoffs from building an effective geopolitical radar and sonar, these examples serve to reinforce the point that, as far as international business is concerned, “geopolitics” is not all downside risk. While risk mitigation and compliance remain important tasks, geopolitical insight is increasingly sought to inform corporate growth and business development. From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 21