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What is geopolitical risk, and how do you measure it for an Israeli business?

Answer by: , founder of Strategic Intelligence Lab · Updated: · לגרסה בעברית

Short answer: Geopolitical risk is the probability that a decision by a government, a major power or a regional actor will change the conditions your business operates in: market access, the cost of capital and energy, regulation, supply chains and demand. You do not measure it by asking how dangerous the region is. You measure it by the organization's specific exposure: which revenues, suppliers, assets and planning assumptions depend on a decision made outside Israel.

The longer view

Most companies treat geopolitical risk like the weather: a headline, a feeling, and a decision to postpone. Real measurement starts with an exposure map. Take your five largest revenue sources, your five critical suppliers and your three central planning assumptions, and ask of each one: which policy decision, tariff, sanction, trade corridor or conflict could change it, and how quickly. The result is a table of exposures, not a general score.

The second step is speed. Geopolitical risk moves at three speeds: slow layers (resources, demographics, alliances), medium layers (capital, infrastructure, regulation) and fast layers (technology, narrative and media). Exposure to a fast layer requires continuous monitoring; exposure to a slow layer requires multi-year planning. An Israeli company is almost always exposed to all three: it is small, export-driven and dependent on distant markets.

This is a reading through the seven layers of The Blue Pumpkin, the method of Dr. Bella Barda-Bareket.

What to do tomorrow morning

Build the exposure map on a single page and mark the three items that depend on a decision due in the next six months. That is the foundation for every other analysis.

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