New Research from BCG, IMD Business School, and the World Economic Forum Reveals That While Executive Awareness Is High, Most Companies Lack Embedded Structures to Act on Geopolitical Risk and Opportunity
DAVOS, Switzerland, Jan. 12, 2026 /PRNewswire/ — In 2025, global policy uncertainty reached a 20-year peak, more than four times higher than during the global financial crisis and around 50% above COVID-19 levels. Senior executives now cite trade reconfiguration, weakening multilateral institutions, and the weaponization of economic tools as persistent threats to business continuity and competitiveness. As geopolitical disruption becomes a defining feature of global business, most companies still lack the ability to systematically anticipate, assess, and respond to these risks, with less than 20% of companies having created a dedicated geopolitics department.
Boston Consulting Group logo (PRNewsfoto/The Boston Consulting Group)
These are among the findings of a new white paper published today by IMD Business School and the World Economic Forum in collaboration with Boston Consulting Group and BCG’s Center for Geopolitics. Titled Building Geopolitical Muscle: How Companies Turn Insights into Strategic Advantage, the paper draws on 56 interviews with senior executives across industries and geographies. Some participants agreed to share their experience publicly, and their cases are profiled in nine examples from around the world.
The paper reveals that while geopolitical topics have climbed up the corporate agenda—particularly since COVID-19 and Russia’s full-scale invasion of Ukraine—most firms remain in a reactive posture and continue to treat geopolitics episodically. Leadership attention is high, but embedded routines to link geopolitical developments to core business metrics and actions remain rare.
“Too many companies treat geopolitics as a headline issue rather than a business capability,” said Nikolaus Lang, Global Leader of the BCG Henderson Institute, Chair of BCG’s Center for Geopolitics, and coauthor of the report. “That model is no longer sustainable. The frequency and simultaneity of shocks now demand geopolitical muscle—the institutionalized ability to sense, reoptimize, and act at scale systematically.”
Other key findings include:
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The direct or indirect effects of major geopolitical developments are now felt across all regions. The top factors cited by companies interviewed for the study were: US policy volatility and tariffs, the Russia-Ukraine war, US-China rivalry, and European competitiveness.
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Geopolitics has long been the purview of the board and CEO, but leadership alone no longer has the bandwidth to manage the speed and scale of today’s disruptions. Dedicated geopolitical capabilities are now required, and teams with direct access to leadership are more likely to influence outcomes.
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There is no single blueprint for mainstreaming geopolitics. While more than half of the companies interviewed locate their geopolitical capability within government or corporate affairs, firms pursue different operating models such as task forces, senior advisers, and full-time dedicated teams.
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The usefulness of emerging AI tools for geopolitical sensing remains limited. Most companies still rely on manual curation or consultant summaries to filter noise. As these tools mature, however, they may increasingly support early-warning systems, scenario generation, and rapid briefing production.
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The ability to connect geopolitical developments to corporate value creation and express them in standard commercial, financial, or operational terms is a prerequisite for relevance. Without this bridge, even strong geopolitical awareness remains disconnected from action.
“Geopolitics isn’t just for diplomats. It needs to be a top priority for business leaders,” said Simon J. Evenett, Professor of Geopolitics and Strategy at IMD Business School, Co-Chair, Global Future Council on International Trade and Investment, and coauthor of the report. “Leadership focus can shift, so teams dedicated to geopolitics need to prove their value by moving beyond risk avoidance and showing real business impact.”
The paper offers a practical guide for leaders seeking to translate awareness into action. It outlines five building blocks to develop organizational geopolitical muscle: clear mandates anchored at the top, robust radar and sonar to detect signals and trends, adaptive operating models, credible leadership and talent, and disciplined integration into decision making.
“Organizations that develop these capabilities are better able to sense, adapt, and build long-term resilience,” said Sean Doherty, Head, International Trade and Investment at the World Economic Forum. “The tariff volatility and supply chain fragmentation we’ve seen over the past year, as well as strategic competition on technology, have shown how geopolitical disruption impacts business. At its best, the geopolitical muscle does more than mitigate risk. It can enhance reputation and brand value, open the door to business opportunities and strengthen an organization’s commercial positioning.”
Download the publication here:
http://www.weforum.org/publications/building-geopolitical-muscle-how-companies-turn-insights-into-strategic-advantage
Media Contacts:
Moyette Gibbons: communications@imd.org
Eric Gregoire: gregoire.eric@bcg.com
About IMD Business School
The International Institute for Management Development (IMD) has been pioneering leadership development for nearly 80 years. Founded by business for business, we are an independent university institute with Swiss roots and global reach. Operating from Lausanne with strategic hubs in Singapore, Shenzhen, and Cape Town, IMD works with 20,000+ executives from 120+ countries annually. Our 145,000+ alumni form a powerful global network. Consistently ranked among the world’s top business schools, IMD bridges cutting-edge research with real-world application to help leaders solve problems, scale solutions, and drive impact. Real learning for Real Impact.
About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.
Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.
About BCG’s Center for Geopolitics
BCG’s Center for Geopolitics brings clarity to the shifting complexities of global power dynamics, unlocking opportunities for growth and collaboration worldwide. By integrating deep geopolitical expertise with BCG’s renowned analytical capabilities, we deliver business-focused and actionable insights that foster open dialogue and equip the world’s top organizations and their leaders with tools to navigate uncertainty with resilience and confidence. Partnering with industry and functional experts across BCG, we cut through the noise with data-driven analysis, offering business leaders strategic and timely responses to emerging challenges, today’s realities, and tomorrow’s scenarios. For more information, please visit the Center for Geopolitics.
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