A 'geopolitical radar' is critical for global businesses. Here's why – and how to develop one

Today, forecasting geopolitical events can feel like predicting the weather, with military coups, government collapses and the ramping up of trade restrictions almost a daily occurrence. These disruptions invariably leave businesses scrambling to react.

With geopolitical rivalries intensifying and economic nationalism on the rise, global businesses must evolve from reactive to proactive in navigating these turbulent waters. A new white paper, produced in collaboration by the World Economic Forum, IMD Business School and Boston Consulting Group, sheds light on how this can be done, namely by businesses sharpening their “geopolitical radar.”

Global businesses are as vulnerable to geopolitical shocks as they have ever been. From supply chain disruptions to new and often burdensome regulations and sanctions, the challenges these pose for business are reaching new heights. Companies that ignore geopolitical dynamics risk losing access to markets, suppliers, distribution channels, as well as access to sources of finance that can have a significant negative impact on their balance sheets.

So, what is a geopolitical radar? Think of it as a company’s capacity to track, assess and respond to geopolitical developments before they become full blown crises. It’s not just about compliance with existing regulations but also about identifying, analysing and developing strategic responses to future risks and opportunities.

Based on 25 structured interviews with executives from multinational corporations, we’ve identified a set of key lessons on how companies can strengthen their geopolitical radar—and why it’s more important than ever to do so.

One of the most striking insights from our interviews is that businesses often focus too much on the immediate and obvious risks—such as new sanctions or export bans—while missing the underlying drivers of geopolitical change. This short-term mindset creates blind spots.

For example, take the US-China rivalry, a top concern for nearly all interviewees. While companies are quick to react to new tariffs or regulations, few invest in understanding the broader geopolitical shifts driving these policies. By focusing solely on the “what” (the event), businesses miss out on the “why” (the underlying drivers), limiting their ability to anticipate future developments.

To counter this, companies should develop a “geopolitical sonar” in addition to their radar since a sonar can help detect deeper, slower-moving trends that may not yet be on the surface but that are likely to have significant long-term impacts.

Strengthening a geopolitical radar isn’t just about tracking more data. It’s about ensuring the right people within the organization are empowered to act on that data.

Our interviews reveal that many companies struggle with “key person risk”, which entails relying heavily on a few individuals to interpret geopolitical insights. This creates bottlenecks and vulnerabilities. When these key individuals leave, the company’s geopolitical radar is invariably weakened.

Companies with decades of experience dealing with such geopolitical risks tend to address this by embedding geopolitical awareness across the organization. They integrate geopolitical insights into enterprise risk management, strategy development and even performance reviews. Some have established dedicated geopolitical teams or “corporate situation rooms” to monitor developments in real time. The goal is to move from a reactive, siloed approach to a more integrated, proactive one.

Many businesses still view geopolitics as a threat to be mitigated. The reality, however, is that geopolitical dynamics can also create commercial opportunities.

Consider the rise of economic nationalism and the push for “strategic autonomy.” While these trends create challenges, they also open doors for companies that can adapt quickly. For instance, as firms diversify their supply chains to avoid geopolitical hotspots, they discover new markets and customers. Some companies have leveraged geopolitical shifts to secure competitive advantages—whether by acquiring rivals impacted by sanctions or by participating in government-backed industrial policies.

To capitalize on these opportunities, companies must shift their mindset from a compliance-driven mindset to one that is opportunity-driven. This involves not just tracking geopolitical events but also understanding the underlying trends and drivers shaping the global landscape.

Based on the insights from our interviews, here are five actionable steps businesses can take to strengthen their geopolitical radar:

1. Invest in horizon-scanning capabilities: Go beyond tracking immediate events. Develop capabilities to identify long-term geopolitical trends and drivers that may impact your business in the future.

2. Embed geopolitical insights across functions: Ensure that geopolitical awareness is not limited to a single team or individual. Integrate it into risk management, strategy and decision-making processes.

3. Leverage external expertise: Engage with think tanks, government officials and geopolitical experts to gain diverse perspectives. But remember, external insights are only valuable if they are contextualized for your business.

4. Establish “corporate situation rooms”: Create dedicated teams or processes to monitor and assess geopolitical developments in real time, ensuring timely and coordinated responses.

5. Focus on both radar and sonar: Track both immediate events (radar) and underlying drivers (sonar) to ensure a holistic understanding of the geopolitical landscape.

Strengthening your geopolitical radar and sonar isn’t just about avoiding risks—it’s about gaining a competitive edge. Companies that excel in navigating geopolitical dynamics can diversify suppliers and customer bases more effectively, identify new market opportunities created by geopolitical shifts and build stronger relationships with governments and influence regulatory frameworks.

Moreover, in an increasingly fractured world, geopolitical muscle—the subject of the next instalment in this series of working papers—is rapidly becoming a key differentiator. The ability to turn geopolitical insights into actionable strategies can determine whether a business thrives or struggles in the years ahead.

The world is well and truly in an era of heightened geopolitical rivalry and strategic competition.

For global businesses, understanding and navigating these dynamics is no longer optional—it’s essential. By shifting from a reactive posture to a proactive one, businesses can not only help mitigate risks but also help unlock new opportunities, positioning businesses for long-term success in what is now a multipolar world.