Geopolitical risk, a compass for exporting companies from the Luiss Observatory

A compass for companies that want to export and invest abroad, perhaps even looking for alternative markets to the traditional ones, in this phase of 'weaponisation' of the traditional tools and rules of economics and finance, in the words of Giampiero Massolo, director of the Geopolitical Risk Observatory (Gro), the Geopolitical Risk Observatory conceived and implemented by the Luiss Guido Carli University, presented yesterday at the Internationalisation Group of Confindustria, in Rome, with an initial official event, which will be followed by others, at regular intervals, to launch the Observatory's various activities.

"More and more frequently, in a world where the law of the strongest and 'my country first' prevails, states make armed use, so to speak, of instruments that are neutral in themselves, such as tariffs or the activities of sovereign wealth funds, which become tools in the hands of governments to fuel confrontations between states and to favour national companies, to the detriment of those of other countries,' explains Massolo, who is also president of Mundys and Fincantieri Nextech. The competition between the US and China has generated a geopolitical scenario in which the criterion of convenience, which we believed to be dominant, is overlaid by the criterion of security and, as a result, governments and companies must increasingly take this element into account in their decisions and adapt, investing in economic intelligence and in structures aimed at mitigating geopolitical risks. It is a new world, in which normal business decisions are in danger of no longer being adequate'.

Hence the Luiss University's desire to set up an observatory to help companies going abroad find their way in this new scenario, through three types of activity. "We are developing a geopolitical risk index, which we will present in May," Massolo points out. "It is a quantitative measurement, based on qualitative inputs, of how government policies affect the investment or export decisions of the country system and Italian companies. The index will be extended over time to a growing number of countries considered priorities for Italia and periodically presented'. Alongside this activity, Gro's team of analysts and researchers develops periodic analyses (disseminated on its website and social media) of international crises based not on the daily evolution of events, but on the dynamics of the risks that could arise from them. Finally, Massolo explains, 'we offer customised services to companies, through briefings, mentoring activities and training'.

More and more medium, medium and small companies, as well as industrial associations, are interested in understanding the risks not only of a country, but also of a certain supply chain. 'For Europe, this issue is fundamental,' adds Massolo. 'Today it should move towards a growing strategic autonomy, which also means better defence and protection of production chains. Another fundamental theme is that of infrastructure, which is decisive for economic competitiveness and national security'. It is precisely the need for greater autonomy that responds, according to Massolo, to the greater dynamism shown by Europe in recent months to reach free trade agreements with countries or regions with great potential, such as those signed with Mercosur and India or the one that could come with Australia. "The advice is always to keep moving," Massolo concludes, "to continue investing and going to the markets, but having a clear idea of the parameters of the new reality.