HOW GEOPOLITICS IS RESHAPING THE OUTDOOR ECONOMY

For thirty years, we became exceptionally good at efficiency. We optimized every unit. We reduced inventory — ideally. We built global supply chains around the best capabilities and the best costs. And for a long time, efficiency, value creation and predictability reinforced each other.

It was brilliant. Until it wasn’t.

One assumption underneath that model has become much less reliable: stability.

When we talk about geopolitics today, we tend to look at individual developments: US tariffs, the US dollar, China, Ukraine, the Middle East. Yet these events are happening inside something much larger. Climate is changing operating conditions. Artificial intelligence is accelerating capabilities — and creating new dependencies. Demographics and wealth are shifting demand. Consumers behave differently across regions. Governments are intervening more directly in economies. Participation itself is changing.

These forces do not arrive separately in our P&L. They interact. Complexity is not the result of our analysis. It is the starting point.

ACT I | UNDERSTAND THE SHIFT

The World Economic Forum ranks geoeconomic confrontation as the number-one global risk for 2026. And 68 percent of respondents expect the next decade to be characterised by a multipolar or fragmented global order.

The consequence for business reaches much further than adding geopolitical risk to an existing risk register. The assumptions underneath decisions that once sat relatively comfortably inside individual functions are becoming interconnected.

A sourcing decision can become a geopolitical decision. A technology decision can create a strategic dependency. Pricing interacts with purchasing power. Climate affects production and participation. And where we sell may become as strategically important as where we produce.

Or put simply: Planning is not becoming less important. Certainty is simply becoming less available. There is no simple escape into localisation either. Skills, technologies, capabilities and supplier ecosystems built over decades cannot simply be moved on a spreadsheet. 

Foundational modelling by the OECD (Shocks, Risks and Global Value Chains) demonstrates clearly that broad relocalisation would reduce global trade by more than 18 percent and cut global GDP by over 5 percent — without consistently improving supply chain resilience.

Furthermore, the McKinsey Global Institute in Geopolitics and the Geometry of Global Trade (2024) proves that physical geographic distance in supply chains has remained stable at around 5,200 kilometers. What is shrinking dramatically is geopolitical distance through deliberate friend-shoring.

Global business will remain interdependent. The strategic question is therefore the quality of that interdependence: where it creates value, where it creates exposure and where it can take away our ability to act. I call this Informed Interdependence.

ACT II | READ THE OUTDOOR ECONOMY

Over time in my industry experience I shared time with leaders across industries — in strategy, finance, supply chains, international markets, boards and associations. Different companies. Different sizes. Different positions in the value chain. Different answers. Putting those conversations next to each other, I started seeing connections. For the Outdoor Economy, three are particularly relevant:

SUPPLY

We spent decades optimizing global value chains, and that logic has not disappeared. Another dimension now sits directly beside cost and efficiency: our ability to act when one part of the system becomes unavailable.

That part is not necessarily the factory producing the finished product. It may sit much further upstream: a material, a specialised capability, a shipping route, software, data — or expertise that took twenty years to build and cannot be recreated within a season.

Moving assembly from China to Vietnam changes little if both locations depend on the same upstream material or technology cluster. At the same time, our commercial systems are accelerating. Sales cycles are compressing. Commitments move earlier. Digital tools provide more information and increase speed. Yet the external environment is becoming harder to forecast.

This creates a significant management paradox: We are being forced to decide earlier in a world we can predict less accurately. The consequences reach straight into working capital, inventory, forecasting, margin and ultimately the speed and quality of management decisions.

DEMAND

On the demand side, the signals can appear contradictory. We see purchasing restraint and margin pressure in parts of Europe while wealth and new middle classes develop elsewhere. New Outdoor brands are emerging from Asia. Outdoor codes are moving into urban culture. Activities once belonging to relatively small communities are becoming mainstream.

We often describe this as consumer volatility. But what we call consumer volatility is frequently a rational response to changing conditions. Purchasing power. Region. Climate. Community. Access. Price.

A consumer extending the life of a jacket during a cost-of-living squeeze and a new middle-class consumer entering skiing in China are both behaving rationally — inside completely different conditions. The average consumer therefore becomes less useful as an economic unit of analysis. This matters for market allocation and for pricing. A general price increase tells us very little; price elasticity tells us where demand actually reacts — by product, region, price point and competitive environment.

PARTICIPATION

The World Health Organization (WHO) states it starkly in its Global Status Report on Physical Activity: 31 percent of adults and 80 percent of adolescents globally fail to meet basic physical activity guidelines.

The Zukunftsinstitut, in its 2024 Megatrend research, highlights the fusion of Health (Healthy Longevity) and Neo-Ecology: Nature is no longer a weekend luxury; it is becoming the primary resilience system for a hyper-digitized society.

Outdoor has always lived between core and mainstream, expertise and access, exclusivity and participation. That boundary is moving. Technology, infrastructure and new formats are lowering barriers. Communities are opening activities that once required expertise, physical capability or access to a very specific world. And in trail running, events like the UTMB demonstrate the precise tension of our era: How do you scale participation without eroding local communities and authentic roots?

Meanwhile, China shows us that participation is state strategy. Through the official "National Fitness Plan (2021–2025)" and the "Outdoor Sports Industry Development Plan," Beijing is actively funding infrastructure, trails, winter sports, and event activation to scale an outdoor sport economy to 3 trillion yuan — roughly 400 billion US dollars.

 Access therefore becomes an economic variable. And there is an important condition attached to that growth: participation only creates lasting value if growth respects the people, communities and natural systems it depends on. That is the most fascinating paradox of our decade: The heavy forces that disrupt our operating environment are simultaneously expanding the economic relevance of our industry.

The macroeconomic environment is not ours to control. Its microeconomic consequences are ours to manage.

ACT III | THE CEO AGENDA

So what does this mean in practice? If you asked me today, “Kim, what would you actually do?”, my answer would be simple: Step out of operations. Completely. For a moment, look at your own company almost as a restructuring advisor would — before you need one. Take the business apart economically, operationally and organisationally: revenue and margin, cash and capital, product and portfolio, supply and distribution, markets and customers, technology and data, people and capabilities.

Then put it back together.

Where do we really make money? What has to function for us to make it? Which assumptions sit underneath our plan? Which capabilities would take years to replace? Where is capital tied up? Who has the knowledge to see a change — and who has the authority to act? Then test whether the strategy you believe you have actually translates all the way from vision and priorities into product, value chain, money, timeline, people and target. Under uncertainty, the quality of strategy becomes visible in how clearly it tells an organisation what to protect — and what it is prepared to change.

That is the job now. Here are six reasonable aspects to take care of:

01 | READ THE SYSTEM

Geopolitical events reach companies through economic consequences. Take an escalation around Taiwan. A company with very little direct sourcing from Taiwan could still have substantial economic exposure. A supplier in Vietnam may depend on Taiwanese machinery. A component becomes unavailable. A shipping route becomes unreliable. Sanctions affect market access. Currency moves against you. Technology availability changes. Consumer confidence weakens somewhere else entirely.

All of those consequences eventually meet in the same place: the business model, the P&L and the balance sheet. Climate follows the same economic logic. Heat changes participation patterns. Snow reliability changes destinations and product demand. Water scarcity affects production. Extreme weather changes logistics, insurance and infrastructure. Climate, geopolitics, consumer behaviour, technology and regulation become business variables when they hit the company. Management therefore needs to model which combinations of consequences materially change the company's ability to create value.

Read the system in which they interact. Then identify where that system can take away your ability to act.

02 | MAP THE STRATEGIC DEPENDENCY ARCHITECTURE

Every company knows its value chain. Beside it, I would map what I call the Strategic Dependency Architecture. A value chain tells us how value is created. A Dependency Architecture tells us where our ability to create that value can be taken away. That architecture reaches far beyond the supplier list: raw materials, components, capabilities, production, logistics, technology, data, market access, distribution, capital and people.

Four dimensions help identify where a dependency becomes economically critical: Concentration · Criticality · Replaceability · Time to Recover

Direct exposure to a region or material may look manageable while three suppliers in three different countries still depend on the same upstream component, chemical cluster, machinery, software infrastructure or highly specialised expertise. Increasingly, data belongs on that dependency map as well. The direction of travel around Europe's Digital Product Passport makes the economic connection increasingly relevant:

Data → Compliance → Market Access → Working Capital

When data quality affects whether and how efficiently a product reaches the market, it affects inventory, cash and the ability to trade. Data compliance becomes working-capital protection. The dependency map can therefore look very different from the supplier map.

And once we understand it, we can put money behind it.

03 | PUT A PRICE ON OPTIONALITY

A deliberately simple starting point is:

Earnings at Risk = Revenue Exposure × Disruption Severity × Contribution Margin

Imagine a category generating €40 million in annual revenue. Sixty percent depends on one critical supply structure. A disruption scenario makes 75 percent of that exposed volume unavailable. Contribution margin is 40 percent.

€40M × 60% × 75% × 40% = €7.2M Earnings at Risk.

Now price the option: second source, qualification, tooling, capacity reservation, strategic inventory, working capital — whatever is required to keep a viable alternative alive. Assume the Cost of Optionality is €1.4 million.

The board now has two numbers:

€7.2M EaR ↔ €1.4M CoO

The calculation can of course go further: probability, best and worst case, currency-adjusted margin, recovery time and secondary revenue effects. Even the simplified equation changes the quality of the decision because Risk, Operations and Finance are discussing the same economic exposure. Resilience becomes a capital allocation decision.

There is also a hard financial constraint. A company can identify the correct strategic option and still be unable to afford it. Margin, cash, balance-sheet strength, ownership structure, financing and capital horizon determine how much optionality is actually available.

So resilience needs allocation where the economic exposure justifies it: Efficiency where we can. Optionality where we must.

Selective resilience.

04 | MANAGE THE SPEED OF RESPONSE

Exposure and optionality still leave us with one decisive variable: time. I would put three clocks into every critical management scenario:

Time to Detect → Time to Decide → Time to Recover

This applies across the company: geopolitical shifts, cyberattacks, logistics interruptions, regulatory changes, currency movements, sudden demand shifts, climate events or the loss of a critical person or capability. How quickly do we know? How quickly do we understand the economic consequence and decide? How quickly can we recover, replace or reallocate?

For critical exposures, organisations need concrete targets. An illustrative ambition could be:

Detect < 24 hours · Decide < 48 hours · Recover 80% of critical capability within 14 days

The appropriate numbers will differ by business and exposure. The important point is that without a target, fast means very little. A Plan B that takes nine months to activate has a completely different economic value from an option capable of restoring critical capability within two weeks.

This is also where investments in AI, data and digital systems connect directly to resilience. Can the system detect the signal? Can it connect that signal to revenue, margin, inventory and market exposure? Can the right people see it? Can somebody decide? Can the organisation execute?

Speed without information is panic. Information without decision capability is administration. The competitive capability is the time between signal and economically effective action.

05 | BUILD AN ORGANISATION THAT CAN ACT

Every model eventually reaches a person who has to understand, decide or act. A company cannot reallocate faster than its people can understand why. Under continuous change, strategy has an additional job: orientation.

Vision and mission hold the long-term direction. Strategy must make that direction usable when the assumptions underneath the annual plan move. People need clarity on what the company protects, where it retains room to move, which priorities remain and who has the authority to decide. Time is easily lost through unclear responsibilities, internal politics or fear of making the wrong decision. If every reallocation feels like a new strategy, confidence falls. When the underlying strategic logic is clear, decisions remain connected to direction even when capital, product, capacity or people move. Strategic clarity creates the confidence to act. That is organisational resilience.

06 | FOLLOW WHERE ECONOMIC VALUE IS MOVING

Structural change also moves value. The World Health Organization estimates that physical inactivity could create around US$300 billion in direct healthcare costs between 2020 and 2030. The Outdoor industry already understands the value of physical activity. The economic question is where that value accrues. When someone becomes sustainably active, value can be created across a much larger system: employers, insurers, destinations, municipalities, tourism economies, health systems — and our own industry.

Many of these relationships already exist. The opportunity is to quantify the economic value underneath them and make it economically usable. Outdoor can create value that currently appears somewhere else in the economic system.

And that value depends on the assets underneath it: People · Communities · Nature. An we all agree: Value creation needs legitimacy — and respect. The strategic opportunity is to follow where economic value is moving.

(CLOSING)

I don't think our job is to predict the future more accurately. Our job is to understand our exposure — and preserve our ability to act. The macro forces are not ours to control. Their microeconomic consequences are ours to manage. And one thing remains remarkably simple: Human nature will always need nature.

Selected Sources & Evidence Base

World Economic Forum — Global Risks Report 2026 · McKinsey & Company — Geopolitics / Global Supply Chains / CEO & Risk Surveys · OECD — Supply Chain Resilience Review 2025 · World Health Organization — Global Status Report on Physical Activity · Zukunftsinstitut — Zukunftsmap / Megatrend Research · Hohberger — Research on Strategic & Economic Resilience · European Commission — ESPR / Digital Product Passport · Confidential Executive Interviews conducted by Kim Scholze, 2026.