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How will geopolitical risks evolve in 2021?

Credit, Political Risk and Terrorism
Geopolitical Risk

By Ryan Brown | March 15, 2021

Geopolitical risks will continue to evolve in 2021 to produce even more unpredictable events. We highlight three key areas for risk managers.

2020 was a year of constant global change as the world contended with a multitude of challenges — a global pandemic, social change, and Brexit negotiations to name a few — that seemed interlinked and only compounded impacts. These events further stressed global political relationships as distrust and a nationalist mindset1 influenced government decisions on an almost unparalleled level.

In a world dominated by COVID-19, we saw governments scramble to be the first to reserve as many vaccine doses as possible. Such a mindset influenced abnormal geopolitical behaviour, not just in relation to the vaccination procurement, but in a wide variety of unprecedented geopolitical risks, as corporate contracts were challenged in public by political leaders.

These connections also deepened as digitalisation accelerated and the world became more technologically interdependent (and reliant)2. Private companies are increasingly exposed to geopolitical acts such as cyber breaches, with several vaccine companies experiencing attempted breaches3. These events are testing business resilience and contingency plans, along with a growing risk of large fines as companies in every industry amass vast amounts of private data.

Evolving risks in 2021

With the pandemic still raging, 2021 looks to be much of a continuation of the last 12 months. However, there is no doubt that geopolitical risks could evolve in 2021 to produce even more unpredictable events and developments.

Three areas to watch include:

  1. 01

    Divided America

    The US election in November saw Joe Biden elected as Donald Trump’s successor. The last 10 years of American politics has seen the near collapse of bipartisanship, and the rise of social division within the country. After four years of a Trump administration, President Biden is likely to take a hard reverse on some significant issues impacting domestic and international businesses operating in the US and abroad.

    Despite most of the risk here being domestic, the rising distrust in the democratic system in a country as influential as the US may lead to negative effects for the efforts of democratisation around the world, potentially paving the way for increased authoritarianism. As geopolitical events can often provoke intense reaction and supply chains continue to grow longer and more complex, a swift change in global sentiment may leave supply chains vulnerable to geopolitical tension.

  2. 02

    G-zero mentality

    The COVID-19 pandemic has shown great co-operation between countries, however it has also catalysed much of a realist international — or worse nationalist — approach as we have seen governments increasingly utilise a g-zero mindset, a concept that Ian Bremmer defined in his book Every Nation for Itself where countries are increasingly self-interested and less concerned with international order4.

    Self-interested competition for vaccinations, resources and foodstuffs has seen traditional supply chains put under real pressure5, and international travel restricted to almost war-time levels; increasing the operational and productive strain on international organisations worldwide. As vaccinations are beginning to roll out at various speeds and success levels around the world, 2021 asks important questions on how resident-status, vaccination passports and how countries without enough vaccination reservations will be treated nationally and internationally.

  3. 03

    Growing cyber risks

    As the pandemic prompted organisations to adopt new technologies at an unprecedented rate, organisations that previously did not have to protect against cyber-attacks and threats are now finding themselves in increasingly unfamiliar territory. Organisations may be at risk of geopolitically motivated cyber-attacks, with previous cases seeing trusted services such as Outlook and Linkedin being targeted.

    As cyber threats expand both through geopolitical developments and through an organisation’s growing reliance on new technologies, it has never been more important to look at cyber risk holistically through targeted risk assessment surveys and analysing risk in conjunction with other key geopolitical lenses.

Conclusion: Interconnected risks require an integrated response

The world is changing quickly in all aspects of private enterprise and geopolitics. As the world becomes increasingly interdependent and connected in many ways, there is also a coinciding trend of distrust and Darwinist6 thinking amongst international leaders. And just as the world becomes more connected, so do the risks. It has never been more important to assess and mitigate risks in a holistic manner, analysing how exposures in different areas overlap and intertwine.

With the world changing in more drastic and unpredictable ways than ever before, so too does the necessity for businesses to adapt in order to minimise risk and maximise opportunities as they present themselves. Taking an integrated view will help future-proof organisations; exposing opportunity and helping to protect the business from known and unknown risks — a vital necessity as we say goodbye to 2020, and hello to 2021.

Footnotes

1 GZERO Summit: Geopolitics in a post-pandemic world, December 2020,

2 Has COVID-19 changed the political landscape for global business?, November 2020

3 Cyber attacks and precision targeting of the vaccine supply chain, December 2020,

4 The G-Zero World, December 2015

5 How to build resilience against challenging geopolitical risk, January 2021

6 Addressing the ‘evolutionary pressure’ of geopolitical risk, July 2019,

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