For the first time, digital technologies sit at the centre of interstate relations — and the alignment between political attention and business interests that firms have long relied on is coming apart. This shift has happened before, but especially in Europe, it has been some time since the last comparable realignment. Critically, this one looks structural rather than cyclical.

The two-level game

In 1988, political scientist Robert Putnam observed that governments play a two-level game: negotiating simultaneously abroad — on trade, technology, security, climate — and at home, with voters, parties, regulators and interest groups. For decades this alignment held: leaders committed internationally to what they could defend domestically, and domestic coalitions shaped what was internationally possible.

That alignment is now diverging. Governments increasingly optimise for geopolitical leverage rather than for domestic or business interests as their focus shifts toward interstate relations.

From economic to geopolitical priorities

For firms, the consequence is concrete: export controls, investment screening, abrupt regulatory shifts — even where these undermine economic cooperation and integration. Firms can no longer assume a stable, rules-based international trade and investment regime. Where an industry isn’t essential to a government’s policy focus, security and national interest will take priority over its needs.

Firms must therefore take responsibility for managing political uncertainty themselves.

Why organisational resilience is a strategic capability

This growing volatility calls for a managerial shift: building organisational resilience as a core capability, not a crisis response. Resilient firms diversify supply chains rather than optimising around a single country, spread revenue exposure across multiple markets, build financial buffers, develop rapid decision-making capacity, and monitor geopolitical risk as closely as market risk.

Organisational resilience is the capacity to anticipate, withstand, adapt to, and recover from disruption while continuing to deliver on strategic objectives. It is not only crisis response — it is a capability embedded in governance, operations, culture, and leadership.

The strategic takeaway

Firms already navigating digital and sustainability transformation now face a third, compounding pressure: geopolitical volatility. Those that build the internal capacity to absorb and adapt to this uncertainty will face significantly less disruption than competitors who treat it as someone else’s problem.

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Keep exploring

This is the first in an ongoing series on strategic resilience for SMEs navigating the digital, sustainability, and geopolitical age. If these questions are live for your organisation, two places to go next: