Business beyond borders: Using satellite tech to transform geopolitical risk strategy

From turmoil in the Ukraine to simmering tensions between the US and China, geopolitical risks are skyrocketing. And, national security concerns aside, the instability is wreaking havoc on business. Trade has halted in areas where it was once flowing, supply chains have splintered, and organisations now reply on international workforces plagued by uncertainties.

In fact, a recent Economist Impact survey has revealed that, for 42% of business leaders, geopolitical issues are now the leading financial concern. Economic uncertainty muddies the waters for investment, with unpredictable asset prices and unstable cross-border ventures making financial commitments feel like a gamble. Political upheaval can also lead to sudden changes in laws and regulations, complicating compliance and strategy as the risk to both personnel and assets – particularly in conflict zones – demands stronger security measures on top of contingency planning.

A sharper focus on geopolitical risk

In other words, the relative calm that businesses have enjoyed over the past three decades is fading and, as stakeholder expectations shift, we need sharper focus on geopolitical risk. In order to keep investors, insurers and suppliers happy, organisations must now invest more into understanding and mitigating conflict, developing a crystal-clear picture of their risk exposure to plan for impacts on revenue, supply chains and environmental and social governance (ESG).

The call for advanced strategy

According to the January 2023 EY CEO Outlook Survey, 97% of business leaders are now turning to advanced data to address the geopolitical problem. Indeed, the survey shows that, based on this data, 41% of CEOs are reconfiguring supply chains, 32% are halting investments and 34% are exiting businesses in certain markets.

Despite this progress, however, there’s still a long road ahead for many when it comes to the effective use of geopolitical data. Only 43% of businesses with passive risk mitigation strategies feel confident in their ability to manage risks actively, perhaps owing to a marked lack of high-tech geospatial data.

Rapid technological advances, particularly in geospatial technologies, offer new tools for tackling geopolitical challenges. For instance, cutting-edge satellites provide unprecedented capabilities for navigating complex international landscapes.

Decoding geospatial satellite data

Put simply, geospatial satellite data analysis involves gathering and interpreting real-time geographical data from multiple sensors and satellites. This data can then be layered over other datasets and maps to provide a detailed view of specific conditions in particular locations.

By analysing this spatial data, often using AI to sift through massive datasets quickly, companies can track assets, map conflict zones and assess regions undergoing political or social changes, even in difficult-to-access, high-risk areas. This intelligence proves invaluable for strategic planning, not only boosting operational resilience but also lowering insurance premium costs.

Real-world business benefits

To understand the true scale of business benefits, imagine, for instance, that you need to keep track of team members as they travel across potentially dangerous territory. Whilst you wouldn’t knowingly send them into active conflict zones, there are many instances where they may need to cross neighbouring countries or regions where instability could easily break out. Being aware of what’s going on at ground-level in real time, ahead of the local news, allows companies to plan ahead for this, not only keeping staff safe but also ensuring no assets are put at unnecessary risk by planning alternative routes for travel.

Areas undergoing electoral changes are one such example, with data allowing organisations to anticipate and respond to political shifts. This proactive approach not only reduces impact on operations and the supply chain, but also ensures compliance with changing regulations and market conditions as they evolve, eliminating potential lawsuits and sanctions. It’s all about staying ahead of the curve.

Take social unrest monitoring, for example. By mapping areas prone to social unrest, businesses can identify regions that might threaten their core operations. Steering clear of these hotspots can prevent consumer boycotts in other parts of the world, also informing decisions about market entry, expansion and withdrawal.

In this sense, the detailed insights that geospatial satellite technologies provide are crucial for businesses operating globally. This data helps to identify both threats and opportunities, enabling sustainable decision-making and a much more economical approach to managing risk.

Refining business strategy in an unstable world

Incorporating geospatial data into risk management strategy enhances the ability to predict and prepare for major shakeup events, whilst also managing insurance implications. The foresight gained also allows for improved resource allocation, improving crisis planning and overall resilience in an increasingly rocky world.

A data-driven strategy ultimately helps leaders to refine their political risk management, inspiring sustainable governance structures. This protects the entire workforce, which is key, particularly in a world leaning increasingly towards remote work, where threats are all around.

A strong, data-informed approach to geopolitical risk also bolsters ESG reputation, enhancing scenario planning whilst strengthening crisis management response plans.

By ensuring that organisations are fully aware of their crisis response capabilities and ability to balance risk, businesses can secure their future in terms of both survival and investment. Indeed, the integration of advanced geospatial data isn’t just strategy – it’s a necessary advantage in an ever-unpredictable world.