Marsh: new era of unprecedented complexity is here
Marsh has issued a new report that claims that the accelerating geopolitical transition is unleashing a new era of unprecedented complexity – unseen in decades – that will persist in the near term as global geopolitical fractures continue to impact trade, conflict, finance, and digital infrastructure. By treating this period as a powerful catalyst for innovation, differentiation, and expansion rather than a source of disruption, organisations can avoid decision paralysis and gain significant competitive advantages in the longer term.
Marsh’s Political Risk Report outlines the major trends in the global political and economic landscape that will impact multinationals and investors this year. While business leaders expect major changes in geopolitics and global restructuring in the next 12 months, they are not dedicating enough time to understand and prepare for the strategic impact of these events on their organisations and are continuing to focus instead on the immediate effects of short-term volatility.
While firms’ exposure to the global geopolitical transition will depend on their geographic presence, sector, and risk preparedness, all are likely to face pressures on physical and digital supply chains, potential disruptions from physical and digital conflicts, and mounting political influence in decision-making. Digital infrastructure – spanning data centre power, construction, data centres themselves, cloud services, and satellite communications – are also being viewed by governments through an increasingly competitive geopolitical lens in the race to win Industry 4.0.
According to the report, assessing how the changing rules and norms of the US-shaped global architecture will impact their organisations should form the foundation of long-term risk management strategies, blending traditional risk transfer with active resilience-building. Solutions such as credit and political risk insurance and surety guarantees can support credit risk and liquidity management and stabilise cash flow, while protecting against counterparty default and geopolitical risk to investments.
Angela Duca, global head, credit specialties, Marsh Risk, said: “An accelerating geopolitical transition is ushering in an era of heightened complexity unseen in decades, while also creating significant opportunities that prepared firms can use to help turn the emergence of the new world order into a powerful vehicle for opportunity, differentiation, and expansion.
“A shared leadership perspective on the prospects for geopolitical change, when integrated into the planning process and across operational domains, can provide greater clarity and confidence to continue taking risks, pursuing investments, and growing trade in a difficult climate as new allegiances in the global trade architecture emerge.”
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