GEOPILITIC AND IMPORTANCE

TO FIRMS SURVIVAL
WHAT IS GEOPOLITICS?

• Geopolitics is traditionally the study of how political power is reinforced or

undermined by geographical arrangements (boundaries, coalitions, spatial
networks, natural resources, etc.).

• Geopolitics also denotes the practical decisions of political and social

leaders with respect to geographical arrangements. 
• The term geopolitics reflects the connection between power and interests,
strategic decision-making, and geographic space.
WHAT IS GEOPOLITICS?

• Originaly "geopolitics" reflected an understanding of international affairs

strongly influenced by Social Darwinism.
• ”Geopolitics" denotes the interplay of natural resources, strategic
dominance and geographic space on the one hand, and the various state and
non-state actors pursuing individual as well as collective interests on the
other.
• Understanding of history, cultural and social as well as political, linguistic
as well as economic
WHAT IS GEOPOLITICS?

• The word was coined by the Swedish political scientist Rudolph Kjellén at
the dawn of the 19th century, epitimising an organic conception of great
power rivalry and expansion.
• While early anglo-american geopolitical debate concerned the relative
importance of land power and sea power, German discourse centred on
interstate rivalry in continental space.
• Military technology, certainly, goes into the geopolitical equation.
WHAT IS GEOPOLITICS?

• While globalisation indicates interdependence, transnational flows and

obliterated state frontiers, geopolitics conjures great power games and
power politics
• Religion is a way to explain the world (just like geopolitics) and give moral
meaning to events and relations between people and their environment on
the basis of divine power.
• Religions create a bond of solidarity between people and therefore can have
an impact in the sphere of power and politics.
Why geopolitics are important to firms?

• Because political risk will impact the firm's performance

• Since 2020 the political risk is higher compared to yesteryears
• Globalization has created new regionalism and disrupt the status quo of a
country policies dan laws – geostrategic competition
• Technology : IOTs of 21st century . 5 G - technological sovereignty,
cybersecurity and determine the “rules of the road” for political and
economic cooperation. Create tension between the US-China relationship.
Why geopolitics are important to firms?

• Demographics: Aging catalyzes global rebalancing

• Risks of domestic political stability are rising in countries with either
extremely old or young populations.
•  The youngest region in the world is Sub-Saharan Africa, where the median
age is just 18.7 years.
• In favour of economies with sustainable working-age populations
Why geopolitics are important to firms?

• Environment: Climate change is becoming a race against time for

government, business and society to develop solutions that prevent the
worst consequences of this pre-eminent global risk to materialize.
• Climate change also holds the potential to cause large-scale migration flows
in the future, which could increase the likelihood of armed conflict.
Why geopolitics are important to firms?
• Geopolitical forces in a world of regions
• While many regions are turning inward to promote cross-border trade and
investment within their own regions, Eurasia is embracing its role in globalization
as the bridge between Asia and Europe. Additionally, the race for sovereignty in
5G, AI, and other fourth industrial revolution technologies is becoming fierce in
markets throughout East Asia and Pacific, North America and Europe. Technology
standards – and the regulations that govern their use – could evolve differently in
each region. Companies will need to consider how these trends will impact their
global supply chains and operations.
How can firms manage geopolitics matters?

• Focusing on these four primary forces of disruption enables executives to

make sense of the geopolitical environment and better anticipate the risks –
both upside and downside – that are likely to occur.
• Focus on Geostrategy