Geopolitical Resilience: The New Imperative for American Business and Diplomacy

The world is navigating an unprecedented wave of elections, with over 2 billion people in 80 countries heading to the polls this year. From the upcoming elections in France and the United Kingdom to those in Brazil and the U.S. this fall, the potential for sweeping political changes is immense. For American businesses, this means navigating a landscape where the rules of engagement can be rewritten overnight.

Geopolitics is fundamentally about power—who has it, who wants it, and how it’s leveraged. In a world where the playing field can suddenly shift due to elections or escalating conflicts, the most valuable asset is geopolitical resilience: the ability to adapt and thrive amidst these ever-changing dynamics. Geopolitical resilience is imperative not just for a company’s bottom line; it is integral to American diplomacy and our country’s ability to lead in the world.

So how can companies develop geopolitical resilience? Through a three-part approach: resourcing their workforce, fostering partnerships with the U.S. government, and building international coalitions.

First, geopolitical resilience must be embedded into a company’s organizational DNA. A recent Fortune/Deloitte survey found that 65% of CEOs believe geopolitical instability will be the most significant external business disruptor in 2024. Despite this, many CEOs confine the management of these risks to a small segment of their organization, typically the global government affairs team. Companies need to invest in an integrated geopolitical strategy that touches every business unit and function. From operations to marketing, employees at all levels need global insights, cross-cultural intelligence, and networks to manage a complex global environment.

The second dimension of geopolitical resilience is developing greater cooperation between the private sector and the U.S. government. COVID-19 exposed significant vulnerabilities in global supply chains, prompting the U.S. government and businesses to strengthen national security interests by increasing essential goods and reshoring critical industries. Government initiatives to support and secure the production of semiconductors through the CHIPS Act, critical minerals, and pharmaceuticals in the U.S. are steps in the right direction, although more channels of collaboration between the public and private sector are needed.

The private sector should be viewed as force multiplier to our country’s official diplomatic presence by providing strategic continuity. As Administrations turn over and relations shift, the American business presence remains a constant and a stabilizing force. When the U.S. has constrained official diplomatic ties with countries, American business often remains the only critical link. Before the normalization of relations with Vietnam in 1995, American companies like Coca-Cola and IBM had limited engagements that paved the way for eventual diplomatic reconciliation and expanded business relations. Even among allies, the private sector provides critical and continual ballast to our international relationships.

Finally, as businesses grapple with diverse and changing regulatory environments governing AI standards, trade, and more, building international coalitions is crucial. Alliances with global partners to harmonize rules and norms within global governance institutions like the World Trade Organization (WTO) and the International Telecommunications Union (ITU) is critical to promoting a level playing field and competitiveness in international markets.  Increasingly we see a “variable geometry diplomacy” approach to building mini-lateral alliances tailored to advance specific interests that the private sector can leverage. The Quad, an alliance between the U.S., Australia, Japan, and India focused on safeguarding strategic interests in the Pacific around emerging technologies, vaccine production, and climate and energy has led to robust corresponding partnerships in the private sector.

By pooling investments and aligning multi-billion-dollar transactions, coalitions can strengthen opportunities and manage risk for U.S. companies competing abroad. Earlier this month, U.S. private sector leaders met with their international counterparts on the sidelines of the G7 Summit in Italy to coordinate on the Partnership for Global Infrastructure and Investment to counter China’s growing influence in the Global South. By working with global partners, companies can more effectively compete and navigate the evolving landscape of international trade and regulation.

While America’s role in the world is being questioned, JP Morgan Chase & Co. CEO Jamie Dimon wrote in his 2023 shareholder report: “We should remember that America, ‘conceived in liberty and dedicated to the proposition that all men are created equal,’ still remains a shining beacon of hope to citizens around the world.” Business leaders, American workers, and entrepreneurs have influence and power that extend far beyond their companies to advance American diplomacy and build a better shared future. Building geopolitical resilience in companies is foundational to this effort.

[Image by helpsg from Pixabay]

The views and opinions expressed in this article are those of the author.