Contemporary corporations are dependent on third parties geographically dispersed across the globe. Enterprises are increasingly aware of the need to monitor their third parties. However, what they often fail to realize is the potentially devastating impact of risks specific to the location in which their third parties or global operations reside, and the ongoing monitoring required of these location-based risks to minimize or avoid business disruption.
Geo-Political risk is only one of 14 categories of third-party and location-based risks that Supply Wisdom monitors, however we have created this ranking highlighting Geo-Political risk for two reasons. Firstly, we believe Geo-Political risks may pose the highest level of global business disruption risks that are not being adequately monitored by enterprises today. Secondly, we believe it effectively illustrates how much location-based risk can vary from one country to another. Beyond that, companies need to understand that Geo-political risk is not static throughout the year but is instead in a constant state of flux.
The 2020 Geo-Political Risk Map
Here, we present the Geo-Political risk ranking of the countries (and Puerto Rico) currently monitored by Supply Wisdom® as frequently used global sourcing destinations. The Geo-Political risk scores used to compile the ranking in this report represent the latest risk levels as we entered into the first quarter of 2020. Explore how the 60 countries perform on Geo-Political Risk in the following map.
Highest Risk: Kenya
Lowest Risk: Ghana
Highest Risk: Sri Lanka
Lowest Risk: Singapore
Highest Risk: Ukraine
Lowest Risk: Estonia
Highest Risk: Mexico
Lowest Risk: Canada
Highest Risk: Brazil
Lowest Risk: Uruguay
The Supply Wisdom Geo-Political Risk Methodology
In Supply Wisdom’s location framework, there are three parameters that comprise the Geo-Political risk category. They are:
- Political risk
- Social & Security risk
- Natural Disaster risk
Each of these three parameters are comprised of sub-parameters. Each sub-parameter is tracked separately and assigned a risk score based on data collected and ongoing risk events. The sub-parameter scores are rolled up into the parameter scores based on weight rankings assigned by our proprietary risk model. The parameter scores are rolled up in the Geo-Political category score also based on weight rankings assigned by our proprietary risk model.
The Geo-Political risk scores used to compile the ranking in this report represent the latest risk levels as we entered into the first quarter of 2020. While these scores were captured at a single point in time, Supply Wisdom monitors these risks continuously and updates scores in real time.
The 2020 Geo-Political Risk Ranking
Risk is Not Static
The following visualization shows how the Geo-Political risk ranking for each country fluctuated through 2019. Flux in the risk scores indicates volatility, demonstrating the need for continuous and real-time location-based risk intelligence and monitoring for making well informed and effective business disruption risk mitigation decisions.