Geopolitical conditions have always influenced companies’ fortunes, but since the end of the Cold War, they’ve taken a back seat to macroeconomic, strategic, and operational concerns. No longer.
Business leaders today view geopolitical tensions as the biggest risk to economic growth, according to the latest McKinsey Global Survey on economic conditions. The resilience and strategies of multinational corporations have been tested by intensifying regional conflicts and international trade divergences in recent years. CEOs and boards understand that a shift in the global order is under way. But many have yet to grapple with an important implication: geopolitical shifts present not only risks to mitigate but also opportunities to seize. Indeed, institutions that position themselves to flourish in today’s geopolitical climate will enhance the lives and livelihoods of their employees and populations.
We believe the often-nebulous concept of geopolitics can be abstracted to a set of concrete drivers that influence everyday business decisions. McKinsey’s Geopolitics Practice looks at these drivers from a value-creation perspective, helping leaders minimize the downside effects of geopolitical shifts and mobilize opportunities for institutional and societal benefit.
