Next-Generation Geopolitical Risk Management
Geopolitical risk management is a heavily under-utilised practice in New Zealand. If we are to ensure the future stability of our organisations we must bring it to the forefront, and act on the foresight it can produce. It’s time to be proactive, not reactive, to the forces of geopolitics.
Geopolitical risk has traditionally been defined as risks emerging from changes in an economic, political or security environment. However, due to the rapidly increasing interconnectedness and complexity of the challenges facing organisations, JC Ltd. believes that we must take a more holistic, non-linear approach that reflects the strategic environment. Some overarching geopolitical risks are outlined below, and these generalised risk-profiles can act as a springboard towards conceptualising more niche, emerging risks such as the delicate interplay between intellectual property, supply chain and diplomatic tensions – as is unfolding in the Zespri-China kiwifuit saga currently. These are primarily economic and political, but for some organisations closer to the forces at play they may indeed be security risks. Furthermore, these risks can just as importantly be ethical ones that yourself, your employees and your clients must be aware of.
Academia:
As a leader in an academic institution, have you assessed if your curriculum may have political or economic consequences? Monitoring of academia by foreign actors is an effective way of putting one’s finger on the pulse of political, economic and societal trends in any given state. If a foreign actor with significant political and economic influence over your institution, or even country, decides that your curriculum works against their interests, what are the potential consequences?
Technology innovation and manufacture:
If you produce technology, including software, are there potential dual-use applications outside of the purpose you intended? Do you know how your customers are applying your technology? If not, do you think they could be applying it in ways that are ethically unacceptable to you and your company’s policies or vision? Many micro-parts used in telecommunication are also used in weapons, just as some facial recognition software may become a tool of oppression and violence in the wrong hands.
Public relations:
Do you or your company take a public stance on sensitive political issues, often pertaining to human rights? Have you carefully calculated the political risk, taking into account your employees, investors, clientele and public opinion, of taking such a stance, or refraining from doing so? Is it too risky to take a stance due to the political alignment of our investors, or do we in fact stand to benefit greatly from it due to current trends in public opinion?
Supply chain:
Is your supply chain resilient against certain diplomatic, economic or security developments? Are you aware that such developments may occur, and which are more or less likely? Are you aware of current trends in conflicts that could rapidly alter the price of, say, oil? Has a key port in your supply chain recently gone through a change in management contract as part of a state’s regional connectivity or national security strategy?
Cyber:
Is your organisations data vulnerable to cyber or interference operations by a foreign state? Do you have a full understanding of your data’s potential value to hostile actors, or your proximity to potential targets? Have you taken all necessary steps to ensure your cyber-security systems are up to the task?
JC Ltd. wants to bring next-generation geopolitical risk management and futures modelling to the forefront of business. We need robust, normalised processes to ensure our organisations can access the knowledge, identify the risks and act effectively to minimise them, and capitalise on opportunities.
