From Niche Market to Core Function: Mapping the Political Risk Analysis Industry

Today more than ever, companies are recognizing the importance of understanding and managing (geo)political risk to protect their interests and avoid being caught in the middle of interstate tensions. More specifically, against the backdrop of formidable political and geopolitical challenges (from the war in Ukraine, conflict in the MENA, to raising tensions between the US and China), companies are pursuing two paths that are by no means mutually exclusive. On the one hand, they are augmenting their decision-making processes with a deeper reservoir of information and political acumen, thereby empowering existing sectors within the organisation, notably public affairs, and combining business insights with keen political sensibility. On the other hand, they are increasingly drawing on the information and expertise of firms specialized in providing nuanced analysis of political risk in its many dimensions. Starting with a survey of data drawn from the websites of over twenty such consultancies and drawing on in-depth interviews conducted with analysts and executives representing a spectrum of political risk consulting firms, this chapter aims to provide an overview of recent developments in the political risk analysis industry.