EY and Teneo launch geostrategic collaboration as instability leaks into 2018

19 January 2018 Consultancy.uk 6 min. read
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Global professional services firm EY has announced the launch of its Geostrategic Business Group, in collaboration with Teneo Intelligence. The new wing of EY will work with or organisations and institutions on a global basis to understand the business implications of the geopolitical landscape, amid uncertainty brought on by Brexit, the Presidency of Donald Trump, and a host of inconclusive elections across Europe.

Following almost decade of austerity, as the global economy continued to reel from the crisis of 2008, GDP growth – particularly among the G7 economies – appeared to have stabilised at around 1.8% in 2016, with little deviation across the world’s largest economic powers. However,  productivity growth remained low, while key uncertainties emerged in the form of US protectionism and Brexit. According to EY analysis, global Initial Public Offering investments had already slowed before both results, with businesses hoping to wait out the potential storm during the lengthy campaign processes for both polls. However, thanks to the shock election of Donald Trump and the majority decision for the UK to leave the EU, a wave of market panic threatened to derail the recovery.

While little material change has actually emerged from either decision – thanks in part to Trump’s mismanagement of his Senate and Congressional majorities as well as Brexit negotiations making little progress over the past year – the potential for major changes to global trade remain, including the possibility of import and export tariffs, and the further restriction of the movement of labour to two of the world’s largest economies. 2017 saw these fears compounded by uncertainty emerging across the broader EU, in the wake of a wave of inconclusive elections. While the infamous “hung Parliament” caused by Britain’s surprise snap election left Theresa May’s Conservative government teetering on the brink of collapse – further hampering negotiations with Brussels – Austria, the Netherlands and Germany joined the UK in each returning ballot results, which delivered no overall control to ruling parties.

EY and Teneo launch Geostrategic Business Group as instability leaks into 2018

While much was made of a supposed defeat of right-wing populism across the continent throughout 2017, the Party for Freedom of Dutch hardliner Geert Wilders, and the German far-right AfD – a member of whom a Berlin court recently ruled could be labelled a ‘holocaust denier – both saw record levels of support in their respective elections. Meanwhile in Austria, the conservative People’s Party opted to go into coalition with the anti-migrant Freedom Party – after the populist entity drew 26% of the national vote. The result left a number of high-profile media outlets suggesting that Europe was on “a tipping point”, making for an anxious start to 2018 for businesses and citizens alike.

EY Geostrategic Business Group

Amid this continuing world-wide uncertainty, Big Four firm EY has announced the launch of the its new Geostrategic Business Group. The entity is aimed at actively working with organisations and institutions globally, in order to navigate the business implications of the tumultuous geopolitical landscape, by helping them to manage existing global operations, and identify new business opportunities. The EY Geostrategic Business Group will do this by providing insightful analysis of key geopolitical events, geographic trends and global trade policies – embedding these across the full range of EY service offerings. EY will draw on their global network of professionals with deep country-level experience in order to support the new practice, supplementing this with its relationships with external groups such as geopolitical advisory firms, think tanks and universities, as well as leveraging an alliance with Teneo Intelligence’s geopolitical advisory competencies specifically for the platform. The geostrategic group will seek to use these combined talents to provide businesses and governments with advice, implementation and execution services.

Teneo Intelligence is the political risk advisory, research and consulting division of global CEO advisory firm, Teneo Consulting. Teneo provides a full range of management consulting services to many of the world’s largest companies and has experienced significant growth in recent times, having worked on a range of major projects. Notably this included a 2015 contract to assist football’s global governing body, FIFA, with a public image crisis, following a rash of bribery scandals at the sporting institution. The consultancy has set its sights on growing into the business support, engineering, health, technology, and software and IT service advisory sub-markets among others, and completed four acquisitions – including that of London-based business consulting group Credo – before the end of 2017 in a bid to widen its pool of expertise.

Commenting on the pertinence of his firm’s new collaboration with EY, Kevin Kajiwara, Co-President of Teneo Intelligence, said, “Geopolitics is re-ordering the global operating environment, and a clear-eyed appraisal of political actors’ motivations and limitations will be key to contextualising the opportunities presented by the evolution of globalisation. Close monitoring of the issues playing out, coupled with a dispassionate analysis of what it means longer term, are more critical than ever for the ongoing success of today’s multinational corporations and the people that run them.”

The EY Global Geostrategic Business Group will be led by Jonathan Shames, who will draw on his own 34 years of experience serving global clients and holding EY leadership roles. Commenting on the new group’s important role, Shames said, “We are experiencing unprecedented levels of political and economic change around the world and geopolitical uncertainty is a key disruptive force impacting business decisions… It is clear that organisations, now more than ever, need to understand the business implications of geopolitical change and integrate that into the decision making at their highest levels. Our group will actively work with businesses to assess global risk, as well as identify the opportunities that emerge from geopolitical disruption.”

Remarking on the launch, Mark Weinberger, EY Global Chairman and CEO, added, “Geopolitical and macroeconomic instability and risk are currently among the top concerns for EY clients around the world, yet many still need to take active steps to address the issues. We are already helping large multinationals make informed decisions using a broad approach that embeds geopolitical insights and our global and local knowledge.”