Executive Briefings

Execs Increasingly Feel Geopolitical Risk Will Affect Them, Yet Most Aren't Doing Anything About It

Executives are likelier than ever to believe that geopolitical and domestic political instability will affect global business and their own companies in coming years, according to the newest McKinsey Global Survey on globalization.

In two years' time, the share of respondents identifying geopolitical instability as a very important factor affecting their businesses has doubled - the largest increase for a given trend since we began surveying executives on this topic a decade ago.

Most respondents expect that geopolitical, political and macroeconomic instability—which, taken together, we call geostrategic risks—will affect their companies, with decidedly negative implications for profits. Yet a vast majority say their organizations are not yet taking active steps to address these issues. They also say that among the other trends that have risen in importance since the previous survey, technological developments present their businesses with both challenges (such as cybersecurity) and opportunities (such as the use of big data and data-driven management techniques).

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In two years' time, the share of respondents identifying geopolitical instability as a very important factor affecting their businesses has doubled - the largest increase for a given trend since we began surveying executives on this topic a decade ago.

Most respondents expect that geopolitical, political and macroeconomic instability—which, taken together, we call geostrategic risks—will affect their companies, with decidedly negative implications for profits. Yet a vast majority say their organizations are not yet taking active steps to address these issues. They also say that among the other trends that have risen in importance since the previous survey, technological developments present their businesses with both challenges (such as cybersecurity) and opportunities (such as the use of big data and data-driven management techniques).

Read Full Article