'2025 Geopolitical Risk Response Strategies' Report
"Restructuring Needed in Supply Chains, Regulations, Technology, and Workforce"
It has been suggested that companies must establish and operate strategies such as supply chain localization and eco-friendly transitions to respond to global geopolitical risks.
On April 30, Samjong KPMG published a report titled "2025 Geopolitical Risk Response Strategies," which contains these insights. The report analyzes the main challenges faced by companies in a complex global risk environment characterized by intensified US-China strategic competition, the restructuring of economic blocs, the strengthening of protectionism, and the climate crisis, and proposes corresponding response strategies.
The report identified the top five geopolitical risks for this year as: ▲ tectonic shifts in the economy and trade, ▲ a complex and fragmented regulatory and tax environment, ▲ a rapidly changing and politicized technological landscape, ▲ various threats to supply chains, and ▲ pressures in workforce management.
The report stated, "The global geopolitical landscape is being reshaped due to intensified US-China strategic competition and the rise of middle-power countries such as BRICS," and pointed out, "With the spread of protectionism and the strengthening of trade barriers, changes in companies' investment, supply chain, and manufacturing site strategies have become inevitable." The report analyzed that major countries are reinforcing the establishment of domestic supply chains in key industries such as semiconductors, artificial intelligence (AI), 5G infrastructure, energy, pharmaceuticals, defense, and electric vehicles, and that reshoring, nearshoring, and friendshoring strategies are accelerating. Regarding the Middle East and Southeast Asia, the report noted that diversification of capital markets and investments in manufacturing are actively taking place.
The report also found that a complex and fragmented regulatory and tax environment is increasing the burden on companies. It stated, "While more countries are adopting the global minimum tax, some are showing signs of withdrawing from multilateral tax cooperation," and added, "Unlike the regulatory easing trend in the United States, new frameworks such as strengthened ESG (Environmental, Social, and Governance) disclosure requirements are being introduced, particularly in the European Union." The report continued, "These changes require companies to invest significant resources in regulatory monitoring and compliance."
Rapid changes and politicization in the technological environment are also emerging as major variables. The report analyzed, "As AI and generative AI technologies become linked to national security, export controls and purchase restrictions on certain technologies are being strengthened," and added, "Global companies increasingly need to seek alliance-centered cooperation strategies to secure advanced technologies."
Regarding supply chain risks, the report stated, "Complex factors such as geopolitical conflicts, protectionism, resource competition, cyber threats, and climate change are threatening the stability of global supply chains," and evaluated, "As a result, countries are accelerating efforts to protect and diversify supply chains for energy, food, critical minerals, and technology."
In addition, the report mentioned that structural changes such as aging populations, declining demographics, and the introduction of AI are bringing about a significant turning point in workforce management. According to the "2024 KPMG Global CEO Outlook," 31% of CEOs worldwide cited a shortage of skilled workers to replace retiring employees as their greatest concern, and 80% responded that investment in technology development and lifelong learning is essential for nurturing future talent.
Samjong KPMG emphasized that companies should establish five strategic directions to respond to these complex risks. Samjong KPMG stated, "Companies should build new regional investments and alliances through friendshoring and supply chain localization, strengthen regulatory and tax monitoring systems to secure market trust, and pursue eco-friendly transitions in parallel."
The report further suggested, "It is necessary to establish a resilient technology supply chain centered on eco-friendly AI technology infrastructure, review supply chain strategies to build circular supply chains, and strengthen capabilities to respond to the climate crisis," and added, "Companies should enhance organizational operational efficiency by establishing hybrid work environments and utilizing AI."
Samjong KPMG Executive Director Bong Chansik stated, "As complex risks are occurring simultaneously across management areas such as supply chains, regulations, technology, and workforce, companies need to go beyond risk management and adopt strategic responses." He added, "To secure sustainable competitiveness, it is essential to establish customized investment and operational strategies that consider the characteristics of each region and industry."
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