Geopolitical and security risk adviser Hagai M. Segal told the Australian Investment Conference 2026, hosted by the CFA Society Australia, that global conflict has become a permanent feature of the economic landscape rather than an occasional shock. He argued that investors who treat geopolitics as unmanageable background noise are miscalculating, since preparedness, not prediction, is the realistic goal.
A world of overlapping crises
Segal described the current environment as a "polycrisis," with roughly eight or nine destabilizing situations unfolding simultaneously worldwide. He cited a rise in active conflicts globally from 29 in 2010 to 65 in 2026, noting most are low- or mid-level disputes rather than conventional state-on-state wars. In his view, this diffuse instability has become the default economic backdrop rather than an exception. He also cautioned that while geopolitics has triggered global systemic economic collapse only twice in 125 years, political and economic forces are now far more intertwined, making geopolitical awareness relevant to routine investment decisions.
Australia's position and a governance gap
Segal pointed to Australia's dual exposure - strategically reliant on the United States while economically dependent on China - as a clear example of why distance no longer insulates investors from geopolitical shifts. He referenced the Shanghai Cooperation Organisation, which he said spans 80 percent of the Eurasian landmass and 40 percent of the world's population, as a structure many Western leaders overlook. Citing research from law firm Clyde & Co. based on interviews with 250 general counsels and C-suite executives, Segal said only 40 percent of organizations could adapt quickly enough to geopolitical change, a shortfall he termed an "agility deficit." He added that few major companies have appointed dedicated geopolitical risk officers with real authority, leaving many firms governed by decades-old risk frameworks shaped by individual executives' personal risk tolerance.
Turning risk assessment into opportunity
Despite the warnings, Segal framed geopolitical literacy as a competitive advantage rather than a defensive measure. He described firms that enter markets rivals avoid specifically because competitors have skipped proper risk assessment, and cited one unnamed company that, after identifying supply-chain exposure linked to Xinjiang and Congolese cobalt, used ethical sourcing as a differentiator. According to Segal, that company saw a 10 percent improvement in staff retention and morale and a 5 percent improvement on its balance sheet within 12 months. He recommended investors integrate geopolitical analysis into due diligence and ongoing portfolio monitoring, using accessible academic research and AI tools to track developments without needing specialist expertise.
A show of hands during the session suggested most attendees had neither formal processes nor significant influence over how geopolitical risk affects their portfolios, underscoring the gap between Segal's recommendations and current practice.