How to enhance geopolitical risk assessment using this combined strategy

Geopolitical risk has become increasingly complex in an era marked by rapid technological advances, political instability, climate change and economic disruptions.

Traditional models often fall short when it comes to capturing the breadth of these shifts. The response must be to integrate the identification of emerging worlds with scenario planning, two methodologies that shift the focus from trends to future developments. By doing so, we can better understand geopolitical shifts that defy traditional forecasting methods and enhance our decision-making capabilities.

This approach aligns closely with the perspectives outlined in the World Economic Forum’s recent white paper, From Blind Spots to Insights: Enhancing Geopolitical Radar to Guide Global Business. In the study, the Forum underscores the importance of developing a forward-looking “geopolitical radar” and “geopolitical sonar”, combining near-term tracking of state actions or events with deeper analyses of underlying drivers and trends.

Existing models have struggled to anticipate transformative events, whether that is the global shock of the COVID-19 pandemic, or the sudden upheaval triggered by Russia’s invasion of Ukraine. These approaches often create an illusion of certainty, encouraging decision-makers to rely too heavily on extrapolations of historical patterns. This rigidity prevents organizations and policymakers from responding effectively to the profound complexities and uncertainties shaping the global stage today.

In contrast, more imaginative methods such as scenario planning acknowledge that the future may not simply follow existing trends. They embrace uncertainty and complexity, encouraging leaders to prepare for multiple potential outcomes rather than relying on a single forecast. Similarly, the Forum’s white paper highlights the need for both reactive and proactive capabilities, what it calls “radar” for imminent disruptions and “sonar” for spotting deeper, slower-moving drivers of geopolitical change.

Scenario planning envisions a variety of plausible futures. It encourages exploring multiple, often divergent paths the world might take. This approach helps leaders question their assumptions, see beyond straight-line forecasts and anticipate potential disruptions. By doing so, scenario planning challenges the status quo, ensuring preparedness for a broad spectrum of future realities, an element also emphasized in the Forum’s focus on distinguishing the urgent from the truly important.

While scenario planning creates an imaginative space, emerging world identification pinpoints nascent global dynamics that are still forming. Rather than relying exclusively on historical data, it focuses on new phenomena that may redefine power structures, alliances, resource competition or technological influence. Recognizing these signals early offers the opportunity to shape policies before these dynamics fully unfold. It complements scenario planning by visualizing the transitions and inflection points that pave the way to these alternate futures.

To improve our ability to detect and understand these emerging worlds, we can incorporate artificial intelligence, particularly statistical learning techniques like outlier and breakpoint detection. These methods identify data points that deviate from established patterns, flagging emerging shifts that might signal the evolution of a new geopolitical landscape. Integrating these insights with scenario-based thinking can further strengthen the firm’s geopolitical radar, much like the Forum suggests combining rigorous near-term tracking with deeper structural analysis.

By integrating scenario planning with emerging world identification, we can improve how we perceive and prepare for geopolitical risks. Some key advantages include:

As global dynamics grow increasingly fluid and unpredictable, traditional forecasting methods alone are insufficient for effective geopolitical risk assessment. By blending scenario planning with emerging world identification and enhancing these approaches through AI-based analytical tools, we can develop an integrated framework that better meets today’s complexity. This combined strategy echoes the calls in the Forum’s report for both near-term vigilance and deeper forward-looking analysis. It can help policymakers, investors and strategists navigate an ever-changing environment, improve their decision-making capabilities, and foster resilience in the face of global uncertainty.