Leaders no longer have the luxury of seeing geopolitics as mere background noise accompanying globalization: it has become the invisible yet decisive framework that shapes and breaks value chains [UNCTAD, World Investment Report 2024]. Tensions between major powers, sanction regimes, the rise of export controls, and the proliferation of cyberattacks have ushered companies into an era of “hybrid warfare,” where the line between economic risk and strategic risk is increasingly blurred [CEPR, “Global economic fracturing and shifting investment patterns”, 2024].
In this new environment, continuing to optimize production site locations as if it were simply a matter of costs and market returns is akin to managing a multinational with outdated maps. Recent studies on the “fracturing” of international investment flows show that geopolitics now weighs as heavily as traditional economic determinants, even relegating them to the background when tensions escalate [Attinasi, Ioannou, Lebastard, Morris, ECB Economic Bulletin 7, 2023]. For boards of directors, the choice is no longer between change or the status quo, but between orderly reconfiguration and constrained adjustments in urgency.
Taking stock of “geopolitical distance”
One initial requirement is to acknowledge that geopolitics is no longer just about qualitative impressions, but that it has measurable indicators. The concept of “geopolitical distance,” often understood through the divergence of votes in the United Nations General Assembly, allows for quantifying alignment or discord between two states [CEPR, “Geopolitical fragmentation and friendshoring”, 2024].
:max_bytes(300000)/frontpop/2026/03/SIPA_00377627_000006.jpeg "The political heritage of General De Gaulle to break out of political impasse and decline")
