Italy faces geopolitical risk as a structural variable in business decisions

In a constantly evolving global scenario, the Italian production system is facing increasingly delicate challenges. The analysis of the risk linked to the change in international balances has become fundamental and, from the choice of markets to that of supply chains, now constitutes a structural variable in the decision-making processes of companies. Precisely with the aim of learning to interpret these changes, the idea of ​​the meeting "Sistema Italia and geopolitical risk: challenges and opportunities" was born, organized by the "Franco Fontana" Strategic Change Research Center of Luiss in collaboration with Intesa Sanpaolo. The event took place at the Luiss campus in viale Pola, in Rome.

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At the opening of the meeting, Paolo Boccardelli, rector of Luiss, underlined the speed and depth of the transformations affecting global geopolitical balances, involving markets, technologies, energy and value chains and «modifying the interdependencies that characterize the global economy».

According to Boccardelli, to respond to these challenges, Italy must leverage its «ability to govern its complexity by investing in human capital. From the digital transition to the demographic winter, the real challenge of strategic autonomy is played on skills: it is by training and enhancing our talents that we will be able to guarantee the resilience, economic security and competitiveness of the Italian system."

In this historical period, therefore, the monitoring and qualitative and quantitative analysis of risk have become fundamental. This is what the Luiss Geopolitical Risk Observatory (GRO) deals with, created within the "Franco Fontana" research center to provide support to companies in understanding global geopolitical dynamics and their impact on economic systems. In fact, as Giampiero Massolo, director of the GRO, explained, "we are not going through a passing crisis, but a structural system change". The world order that «for thirty years has guaranteed Italian companies shared rules and open markets is falling apart» and for this reason «geopolitics can no longer be a background, but must become a permanent competence of companies», concluded Massolo.

From this perspective, a fundamental tool is the GRO's Geopolitical Risk Index, of which Carlo Gallo is responsible. Gallo explained that the index, currently extended to 65 countries and updated fortnightly, has been structured on three causal levels: «In addition to considering the structural level, and therefore the variables and characteristics of each country that change slowly over time, we also take into account the current state of the different countries and the prediction dimension, in which we evaluate the intentions and possibilities of action of the geopolitical actors».