the retreat of global institutions have all contributed to a dramatic uptick in political and business uncertainty and the rise of economic security as a key national priority (Timelab/Unsplash)

The rise and rise of geopolitical risk

Volatile geopolitics creates risks for business. A new industry is emerging in Australia to meet the demand for intelligence and advice.

Matthew Newman

14 November 20254 min read

Last week, the Australian Critical Infrastructure Security Centre published its Third Annual Risk Review. The report said “geopolitical risk is an ongoing reality for all critical infrastructure sectors”, echoing sentiments in the Australian Prudential Regulatory Authority 2024-25 Annual Report, which said geopolitical resilience was a major area of activity for the organisation.

The rise of China, an assertive Russia, populism in Western democracies, and the retreat of global institutions have all contributed to a dramatic uptick in political and business uncertainty.

Geopolitical risk has emerged as a rising concern for the private sector. From armed conflict in eastern Europe and tensions in the South China Sea to cyberattacks and disinformation campaigns, the world is confronting a new era of uncertainty that is reconfiguring the international business landscape.

As these pressures compound, and the prospect of war in Asia becomes less remote, it is worth exploring how corporate Australia should prepare to weather these global challenges.

One option for Australian business is the uptake of geopolitical risk advisory services to help it understand and minimise its exposure to global shocks and shifts. When undertaken at a broader scale – across highly exposed export industries and the banking sector – the cumulative benefit is likely to be a more resilient and prepared economy capable of withstanding the impacts of geopolitical flux.

Geopolitical risk advice is a specialised service that enables organisations to assess and navigate the impact of political, economic, and security developments on their operations and strategies. It combines political science, economics, security studies, and data analysis into actionable intelligence for business executives.

The type of service provided can range from deep strategic insights on country risk to advice on regulatory shifts to detailed scenario planning for military conflict or prolonged political instability. For multinational corporations and investors, this kind of foresight has the potential to mitigate sizeable financial losses.

Geopolitical risk has increased considerably over the past decade. The world order, perceived as relatively stable following the Cold War, has become less predictable and more contested. The rise of China, an assertive Russia, populism in Western democracies, and the retreat of global institutions have all contributed to a dramatic uptick in political and business uncertainty and the rise of economic security as a key national priority.

This is not an abstract challenge for Australian businesses. China’s imposition of anti-dumping tariffs on Australian wine was a watershed moment for exporters, such as Treasury Wine Estates, regarding the risks involved with operating in politically sensitive markets. As a result of the 2020 levy, Treasury recorded a 15% decline in earnings in Asia and saw share prices almost halve in the following months. Geopolitics was the primary factor impacting the bottom line.

ASIO boss Mike Burgess recently warned business leaders in Melbourne that growing regional tensions were accelerating the exposure of Australian critical and business infrastructure to "high-impact sabotage” by foreign actors. On the back of recent cyber-attacks against Optus and Qantas, there is an emerging convergence of geopolitics with the reputation and profitability of Australian firms.

Yet, for all this demand, Australia's geopolitical risk advisory landscape has only recently begun to expand.

Whereas some companies, such as ANZ and Commonwealth Bank, have opted to undertake this work in-house, the shallowness of the domestic geopolitical risk labour market, combined with the economies of scale available through third-party consultancy, has encouraged the expansion of a standalone industry.

To meet the growing appetite, several firms have emerged offering geopolitical risk services to Australian businesses. Dragoman Global and the KPMG Geopolitics Hub, for example, provide strategic advisory services to several ASX200 companies. Foreign players such as Control Risks have established an Australian presence to capitalise on the relative infancy of the domestic sector.

Australia's geopolitical risk advisory landscape has only recently begun to expand.

These ventures deliver tangible insights and strategies to clients, and prove the commercial utility of geopolitical risk advice to the broader Australian business community – in turn enhancing Australia’s national economic resilience.

Though Australia’s geopolitical risk advisory sector is on the rise, it must continue to mature to deliver broader economic security benefits. That means building corporate and government awareness of the importance of this work and developing a talent pool capable of supporting industry growth.

As the Indo-Pacific becomes more volatile, and as Australia becomes more exposed through defence partnerships such as AUKUS, the level of geopolitical risk impacting domestic entities will only grow.

Corporate Australia cannot afford to sleepwalk through this new age of business risk. It must build the capabilities – and the culture – to anticipate and adapt. The tools are already being sharpened. Now is the time to use them.

About the author

Matthew Newman

Matthew Newman is the 2025 Michael and Deborah Thawley Scholar in International Security at the Lowy Institute and Center for Strategic and International Studies.

Topics

Australia Defence & security