Dragonfly Intelligence has released its annual Strategic Outlook 2026, offering a detailed assessment of the geopolitical pressures expected to shape global operations next year. The report draws on expert analysis, threat modelling, and political-risk intelligence to map how emerging security dynamics may distort trade flows, resource availability, and supply chain reliability. This year’s framing, a shift toward a “multisphere world”, reflects an environment where cooperation, competition, and conflict often overlap, complicating business planning and resilience strategies.
Hard Power Rises as Multilateral Stability Weakens
One of the report’s strongest conclusions is the acceleration of military spending relative to development investment. Global defence outlays reached US$2.7 trillion in 2024, far outpacing commitments to stability and aid. According to public data from the Stockholm International Peace Research Institute, 2024 marked the steepest annual rise in military expenditure in over a decade, reinforcing Dragonfly’s projection of a more militarized global order.
This shift, the report notes, increases the likelihood of policy-driven disruptions, from sanctions to export controls, and reduces the buffering effect traditionally offered by multilateral institutions. Dragonfly highlights a world in which deterrence is rising faster than diplomacy, increasing the risk of sudden shocks to transportation corridors, commodity markets, and regional manufacturing hubs.
Compounding the picture is a sharper turn toward geoeconomic coercion. As Washington tightens semiconductor and technology restrictions, Beijing is reinforcing control over critical materials such as rare earth elements, chokepoints already flagged in trade reports as sensitive fault lines for automotive, electronics, and renewable-energy supply chains. Dragonfly warns that these moves could translate into longer lead times and tighter allocation for industries dependent on specialized inputs.
Technological, Climate, and Space Risks Create New Blind Spots
AI-related exposure emerges as a multi-directional threat. While companies accelerate AI adoption to automate planning, procurement, and logistics, hostile actors are using the same technologies to map network weaknesses with greater precision. This mirrors recent findings from cybersecurity industry surveys showing increased vulnerability through AI-assisted reconnaissance.
Climate-driven pressures also feature heavily. Dragonfly notes declining global commitment to climate mitigation despite rising physical impacts, including more frequent droughts and crop failures in climate-vulnerable regions. According to publicly available data from the World Meteorological Organization, 2023–2024 saw record-breaking heat and extreme weather events, signals that Dragonfly says will carry into 2026 with higher operational and commodity risk.
The report also flags intensifying space-based tensions, an area gaining prominence across defence and commercial sectors. Practices like GPS jamming and signal spoofing, already observed in several conflict zones, pose risks to navigation, aviation, and maritime operations. Dragonfly warns that a miscalculation in orbit could trigger sudden restrictions on space-enabled infrastructure critical to transport, timing, and communications.
Regional Scenarios Point to Political and Economic Pressure Points
Dragonfly’s regional modelling identifies several destabilizing dynamics for 2026:
1. United States: Political volatility is expected to rise ahead of the November 2026 midterm elections, with potential shifts in congressional balance raising concerns around policy continuity and domestic unrest.
2. Europe: Growing nationalism and stricter border controls could exacerbate labor shortages and increase bottlenecks at high-volume crossings. Trade reports throughout 2025 have already pointed to tightening immigration regimes affecting sectors like transportation, construction, and healthcare.
3. Asia-Pacific: The US–China rivalry is projected to deepen economic fragmentation, with supply chains in semiconductors, EVs, and green technology facing greater regulatory swings and retaliatory measures.
4. Climate-vulnerable regions: Countries in South Asia, sub-Saharan Africa, and parts of Latin America may see higher instability triggered by food insecurity, drought, and climate-linked migration.
Dragonfly frames these scenarios as planning tools, not predictions, urging organizations to focus on warning indicators that may signal rapid escalation.
Why Early Warning Matters More Than Perfect Forecasting
One of the most overlooked dynamics in today’s geopolitical environment is how quickly operational risk now moves from the periphery to the center of the business. Public reporting over the last year shows that disruptions, from Suez Canal diversions to semiconductor export controls, often build quietly before accelerating into system-wide constraints. The forward-looking imperative, then, is not to predict each flashpoint but to strengthen the capability to detect small shifts early and translate them into actionable adjustments. Organizations that treat geopolitical intelligence as a continuously refreshed operating input, not a periodic report, are increasingly the ones able to reposition inventory, suppliers, and capital before the rest of the market moves.
