From Blind Spots to Insights 2025

Asking corporate executives which geopolitical factors are top-of-mind can be very insightful. While the broad categories of these factors may not surprise a well-informed observer, what stands out are the attributes of specific factors that executives identify as geopolitically relevant. Our 25 interviewees identified over 80 different geopolitical factors that are relevant to their business. They fall into a series of broad categories: –Acts, such as bans on exporting certain technologies, regulations on data transfer and use, cyber-security regulations and consumer boycotts triggered by continued commercial presence in Israel. –Events, both actual and potential, such as the trade disputes between the US and China, the 2024 “year of elections”, or a potential conflict in the Sea of Japan. –Drivers of geopolitical events, including greater polarization in certain nations’ politics, nationalism and the transition to clean energy. –Trends, such as supply chain reconfiguration, localization pressures and the rise of China. Figure 1 identifies six groups of frequently mentioned geopolitical factors and how often they were mentioned by our interviewees. Only two interviewees did not cite relations between China and the US as a top-of-mind geopolitical development. Bear in mind that the maximum possible number of mentions is 25 (the total number of firms interviewed). Of the six commonly identified types of geopolitical factors, two involve kinetic conflict, while another two reflect economic clashes, specifically US- China relations and national and economic security measures. In contrast, changes in political leadership – a traditional corporate political risk – were mentioned only six times. Additionally, one-quarter of interviewees identified supply chain disruption and reconfiguration as a distinct category of geopolitical factor. What to make of these groups and the factors underlying them? The groups are certainly not MECE (mutually exclusive and collectively exhaustive). Deteriorating relations between China and the US, plus the legacy of the Covid-19 pandemic and the importance of certain critical minerals (such as rare earths), may well have increased mentions of economic security measures. In all likelihood, so did the Russian invasion of Ukraine. The time when those headwinds started being acted upon varied among interviewees. One Asia- based interviewee highlighted as late as 2023 as the pivotal year when their company started to assess a supply chain diversification plan – with some thinking done before then, but no action taken. Another EU-based interviewee cited the invasion of Ukraine as the wake-up call, while a company in the trading sector cited Covid-19 as the gamechanger. Number of mentions by interviewees of different geopolitical factors FIGURE 1 0 5 10 15 20 25Conflict in Gaza and related matters Supply chain disruption and reconfiguration4 6 6 16Elections and other changes in political leadership Russia-Ukraine conflict 19 National security and economic security measures 23 US-China relations Only two interviewees did not cite relations between China and the US as a top-of- mind geopolitical development. From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business 8