Recognizing Geoeconomic Risk: Rethinking corporate risk management for the era of great power competition

As economic policy has become a key strategic means in great-power rivalry, states are
attempting to control the economic networks that connect the world. By instrumentalizing
businesses they change the risk picture for both public and private companies.
• The securitization of the economy entails a first source of new risk as states attempt to
strengthen their control of companies in sectors considered strategic and security-sensitive.
• Another source of risk stems from the balkanization of the global economy, whereby it would
disintegrate into separate spheres of economies decoupled from each other. Te competition
for control of the global standard-setting regimes constitutes an emerging area of such risk.
• A fnal source of risk is the weaponization that accelerates the use of sanctions and export
controls. It entails more barriers for companies and puts pressure on the rules-based international system.
• A novel concept of ‘geoeconomic risk’ is therefore needed to identify, assess and mitigate
these new uncertainties associated with the repurposing of the global economy.