In today's rapidly evolving global economic landscape, businesses face mounting geopolitical instability. Yet, despite these challenges, recent survey data reveals that US procurement buyers are not slowing their innovation efforts—they're accelerating them. Organizations equipped with artificial intelligence (AI) tools demonstrate a clear advantage in preparing for these risks, according to new research.
Geopolitical Risks Reshaping Supply Chain Strategies
A recent report by Ivalua, surveying US supply chain and procurement decision-makers, highlights deep concerns among local businesses about escalating geopolitical risks. The findings show that 91% of respondents anticipate new trade policies will trigger supply chain disruptions , while 85% say international instability is already influencing their decision-making. However, companies actively deploying AI technologies are emerging as industry leaders, showcasing remarkable resilience.
"98% of respondents using comprehensive AI tools feel well-prepared to handle geopolitical risks, with nearly half describing themselves as 'very prepared.' This contrasts sharply with organizations still implementing AI (21% preparedness) and those not considering AI adoption (0%)."
The Innovation Paradox: Cost Pressures vs. Tech Investment
While 77% of surveyed companies are advancing AI applications in procurement and supplier management, only 36% currently prioritize AI for their supply chains. Most firms remain focused on cost control and risk mitigation—yet this doesn't signify abandoned innovation. In fact, 73% of business leaders believe increased technology investment is essential for identifying and mitigating geopolitical risks.
The survey reveals a complex landscape: 65% of companies have paused or reduced investments due to trade policy uncertainty, yet 59% still rank innovation as a priority—demonstrating that transformation continues even under pressure.
AI Maturity Delivers Competitive Advantage
Companies with mature AI strategies significantly outperform peers in managing geopolitical risks and cost pressures. For instance, while 78% of unprepared organizations expect cost increases, this drops to just 50% among well-prepared firms. The research also uncovered striking disparities across management levels:
67% of business owners and 56% of C-suite executives believe their organizations are "very prepared," compared to just 17% of senior managers and 10% of junior managers —highlighting critical gaps in execution and communication.
Conclusion: Innovation as a Strategic Imperative
Ivalua's findings demonstrate that innovation serves not merely as a risk response strategy, but as a powerful driver of operational agility and competitive advantage during uncertain times. As geopolitical complexities intensify, AI adoption is becoming a defining differentiator between market leaders and vulnerable competitors.