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Ongoing geopolitical tensions and the impact on the Scottish economy and Scottish Enterprise

RISK

Sustained and significant geopolitical tensions and associated shifts in foreign and economic policy continue to disrupt global, UK and Scottish economies – impacting trade, investment, supply chains, inflation, business confidence and the support that Scottish Enterprise can provide to some sectors of the economy and some companies through policy changes.

This volatility requires Scottish Enterprise to provide strategic leadership that elevates and shapes national economic ambitions and responds to both current and future economic challenges. Failure to respond appropriately may lead to:

• Increased scrutiny, criticism and challenge from stakeholders.
• Operational disruption.
• Reduced project pipelines and missed opportunities to support economic transformation.
• Reduced performance across key measures.
• Reputational damage and diminished influence in shaping Scotland's strategic economic direction.

This has been one of Scottish Enterprise's principal risks throughout 2025-26 and reflects many commentators' views that geopolitical tensions will remain elevated.

KEY MITIGATIONS

• Ongoing oversight of the Board and Executive Leadership Team on our missions and operating plans to ensure our focus aligns with the evolving needs of the economy.
• Ongoing monitoring of wider economic and political trends and potential consequences over the over short and longer terms.
• Monitoring of performance measures and project pipelines across trade, inward investment and capital investment to identify and respond to emerging issues. Continued focus on delivery of opportunities and markets that are most resilient to these impacts.
• Engagement with UK and Scottish Governments to identify potential impacts on our future focus and priorities.