Navigating the turbulent waters of geopolitics: A guide for businesses
The global geopolitical landscape is more volatile than it has been in decades. Ongoing military conflicts, economic rivalries, shifting power dynamics and the ever-present threat of cyberattacks, create ripple effects that extend into board rooms and supply chains across the world.
Businesses are facing a complex and unpredictable environment, and are grappling with a growing sense of uncertainty.
To ensure stability and growth, it is paramount to understand the challenges ahead. This post outlines the major players, immediate challenges and the most prominent geopolitical issues and pinpoints a number of proactive steps to help you stay ahead and mitigate potential risks, ensuring long-term resilience.
The war in Ukraine
The ongoing war between Ukraine and Russia continues to dominate the world stage. Come February, the war will enter its fourth year, and with Western sanctions and military aid to Ukraine that further strain relations with Russia, tensions are at an all time high. Beyond the actual battlefield, the war has also escalated the frequency and sophistication of both cyberattacks and physical attempts to disrupt critical infrastructure targeting sectors like energy, water and transportation.
“Make America Great Again” – again
Further fueling global tensions is the shift in U.S. foreign policy. With a new and more radical administration in place, there is a heightened focus on American domestic interests and a more unpredictable approach to international relations. The America First stance is already reshaping global trade, alliances, and security dynamics and threats of trade tariffs and the possible deployment of military power to resolve territorial claims have added yet another layer of complexity that forces businesses to navigate an increasingly intricate web of challenges, where long-standing alliances may fracture, leaving former allies on opposite sides of critical issues.
The rise of China
Simultaneously, the rise of China as a global economic and military power has led to heightened tensions. While China’s economic growth presents opportunities for collaboration, its increasing assertiveness, violation of basic human rights and territorial disputes in the South China Sea have also created an environment fraught with uncertainty for businesses dependent on global supply chains. For companies operating in these regions, the risks of shifting alliances, export controls and regulatory challenges cannot be ignored.
The European struggle
Meanwhile, the European Union faces its own internal challenges. Differing priorities among member states often complicate collective decision-making, particularly in responding to global challenges. The EUโs reliance on the U.S. for security, coupled with the pressure to balance trade relations with major powers like China and Russia, places European businesses in a precarious position. This dependence on external actors has raised questions about the resilience of EU industries and the need for more localized and diversified supply chains.
Adding to the complexity is the rise of political polarization at a national level. Across Europe, the U.S., and beyond, sharp divisions over issues like climate policy, immigration and economic strategy have made it harder to reach consensus on critical issues, potentially leading to instability and hindering effective governance. For businesses, this means operating in an environment where regulatory frameworks are subject to abrupt shifts, further complicating strategic planning.
This uncertainty is further amplified by the rapid advancement of artificial intelligence and other disruptive technologies. As geopolitical powers compete for technological supremacy, the stakes for innovation, ethical governance and cybersecurity rise. For instance, recent announcements such as the newly launched Chinese chatbot DeepSeek or Trump’s AI investment plans, underscore how technological advancements are poised to become both a tool and a battleground for geopolitical influence.
It is a lot to take in, and at times, the outlook can seem very daunting. However, uncertainty does not equal inaction. By staying informed, assessing risks proactively and safeguarding operations, you can navigate the challenges ahead by following these key steps:
Identify assets and key stakeholders
For many organizations, identifying what needs protection can seem like an overwhelming and unmanageable task. Yet, it is a critical first step and an absolute necessity. Effective risk mitigation starts with an understanding of what is at stake and where potential risks may emerge.
You should start by mapping key stakeholders, including supply chain and customers. Schedule ongoing workshops, interview focus groups and/or use products such as Falcon Discover to uncover the systems employees have downloaded to their computers and use actively.
Analyze your dependencies on specific countries and regions. Ask yourself the following questions:
- Do you rely on suppliers in and products from the US, China, Russia or other volatile regions?
- Are your customers primarily from the EU or do you depend on non-EU customers?
- What measures do you need to take to ensure that you retain the customers in case of tariffs or political instability?
Understanding your exposure to potential disruptions, such as tariffs, trade restrictions, or political instability, is essential for proactive risk mitigation and how you get through changes in the geopolitical situation.
Consider diversifying your supplier base and exploring opportunities to work with national or EU partners. For example, investigate the benefits of using Danish suppliers for IT services, hosting or cybersecurity solutions.
Prioritize scenario planning and risk management
We cannot stress enough the importance of preparing risk assessments and conducting scenario planning. Based on the identified systems and stakeholders, you should draw up plans for handling various events triggered by geopolitical changes. Consider how different scenarios could potentially impact your operations, finances and reputation. Risk planning may involve implementing mitigating action now or preparing plans for potential future events. This is Business Continuity Planning 101: It is always easier to plan ahead with a cool head and clear mind, than to manage a crisis without prior preparation.
As part of your risk management efforts, engage relevant departments in workshops to address critical questions such as:
- How could shifts in the geopolitical landscape affect our data security and compliance?
- Which critical IT infrastructure suppliers are we dependent on? Are there alternative suppliers located in Denmark or the EU?
- Could our products or services be impacted by geopolitical changes?
Stay informed on news and developments
Keeping up with geopolitical changes and their impact on your organization can be challenging, but is essential. Develop a strategy to stay informed about the geopolitical landscape and rely on diverse and credible sources. Always cross-check information with the original source to ensure accuracy. Consider following organizations like Center for Cyber Security (CFCS) for updates on cyber threats and national security assessments.
Be mindful of echo chambers – when similar opinions circulate and reinforce existing beliefs, oftentimes amplified by algorithms that push content tailored to your preferences. To counter echo chambers make sure to diversify your news sources, check and verify their credibility, actively listen and ask critical questions with an open mind.
Protecting your business in a turbulent world
In conclusion, the global geopolitical landscape presents a complex and ever-evolving array of challenges for businesses. From escalating military conflicts and trade wars to the rise of new technologies and political polarization, organizations must navigate a world of uncertainty. This necessitates a proactive and strategic approach to risk management, one that anticipates potential disruptions and safeguards your business for the future. Implementing a robust GRC framework can be instrumental in navigating these turbulent times.
While the complexities may seem overwhelming, remember that foresight and preparedness are your greatest assets. By understanding the geopolitical forces at play and taking proactive steps to mitigate potential risks, you can ensure the continued stability and growth of your business.