The New Geography of Risk and Resilience

We live in a complex system, not a world of theoretical silos. Military conflicts such as the Russia‒Ukraine war, economic tensions between the USA and China, technological disruptions driven by AI advances, and accelerating climate volatility all have — individually and collectively — a wide array of first-, second-, and third-order effects that are nearly impossible to predict in advance. Every nation must be prepared for a wide range of scenarios that might unfold.

Such is the Darwinian condition of the world today: Survival of the fittest. But Darwin himself wrote that “It is not the strongest of the species that survives, nor the most intelligent — but the one that is most adaptable to change.” Adaptation to change, then, is the key to resilience.

Achieving societal resilience to shocks has quickly become a national priority around the world, spurred by the Covid-19 pandemic. But while the term ‘resilience’ is on everyone’s lips, measuring it has proven elusive.

We are inundated with reports warning of risks and ranking them, but we haven’t had equally rigorous metrics for resilience — until now.

Measuring Risk and Resilience in a Volatile World

Henley & Partners and AlphaGeo are pleased to jointly present this Global Investment Risk and Resilience Index. This groundbreaking tool looks holistically at national-level risk factors and identifies the corresponding attributes of resilience that offset them, giving a comprehensive picture of a society’s stability and attractiveness for international investors and migrants.

Central banks measure resilience according to macro-economic and financial variables; public policy experts look at political and socio-economic factors; engineers focus on infrastructure capacity. We have brought all these criteria together into a comprehensive framework that spans currency volatility and inflation, political and regulatory landscape, governance and social progress, technological innovation and climate adaptation. Together, these factors determine a society’s overall resilience to a wide range of potential shocks.

Benchmarking is a powerful tool to help nations compare their strengths and weaknesses with others and learn from what their peers are doing to build resilience. By measuring risk, we capture how exposures and vulnerabilities can undermine national stability. By measuring resilience, we capture the safeguards that protect value.

Our results are genuinely unique. You will see the top tier populated by countries across numerous continents, including nations large and small. This demonstrates that resilience is not the sole preserve of countries traditionally associated with stability.

Adaptation as the New Imperative

In an age of persistent volatility, measuring national resilience could supersede narrow measures of wealth or biases towards types of government. Instead, it is the societies that are most resilient that in the long run are most likely to succeed. Locations that invest in adaptation to perpetual uncertainty will attract investment and migrants, enjoy economic growth and value creation. This makes adaptation both the best risk mitigation and absolute return strategy — for all stakeholders.

AlphaGeo’s founding mission is to guide resilient investing, while Henley & Partners’ is to guide global citizens towards resilient geographies. Together, we present this index to the global community as an analysis and a playbook — both for governments and for individuals. We encourage members of the general public, expert community, and our clients to engage with the index and the accompanying insights and provide feedback so we can better serve you in investing in resilience.