Dragonfly Strategic Outlook: Bracing for Supply Chain Risks

Dragonfly Intelligence has released its flagship annual assessment Strategic Outlook 2026, presenting an estimate of global security and geopolitical risks that will have an impact throughout the coming year.

The report explores trends that emerged within 2025, with the potential of them worsening to cause even greater disruption over 2026.

It has also examined risks specific to each region, as well as the greater supply chain risks which will occur as a result. 

2026 risk

Dragonfly, a Dow Jones company since April 2025, is a risk intelligence business, helping clients navigate uncertainty and build resilience in an increasingly complex environment. Dow Jones is a global news provider, delivering content around the world in a range of formats. The 2026 Strategic Outlook report uses a combined pool of expert analysis of data and intelligence, scenario modelling, threat and risk assessments and political science. 

Over the last few years, businesses around the world have been left vulnerable to one geopolitical disruption after another. According to Dragonfly, this is unlikely to change in 2026. The world, Dragonfly experts explain, is becoming a multisphere space - "a fluid order defined by overlapping and often competing interests, dependencies and contestation." 

Militarisation is increasing, with governments investing more in warfighting capabilities than in development and investing in stability. In 2024, global defence spending reached US$2.7tn - this is 13 times the investments in development aid. 

Major powers are contributing to risk on a high level, with bodies putting more funding into deterrence than prevention, and acts of geopolitical violence - such as the ongoing tariff concerns - are causing ripple effects throughout global markets as well as reducing trust in the US. 

"Strategic Outlook 2026 provides a region-byregion and thematic assessment of key risk trends, trajectories, scenarios and warning signs," says Henry Wilkinson, Chief Intelligence Officer at Dragonfly and Editor-in-Chief of Strategic Outlook 2026. 

"This year’s theme of a multisphere world challenges assumptions about how the global system will function in 2026, provides a conceptual framework to use to make sense of it, and looks at how geopolitical risks will take shape." 

Supply chain trends

Dragonfly points towards a series of trends which it predicts will shape 2026.

Hard power
Global powers are investing more in advanced military, while institutions in place to prevent wars, such as the Untied Nations, are facing more issues. As a result, the risk of war appears to be growing. This will consequently create a heightened exposure to volatility, policy-driven disruption and strategic uncertainty for businesses around the world.

Geoeconomic coercion
As the US-China rivalry grows, allies become caught up in the conflict. In response to Washington's tariffs and limits on trade, China is tightening control over critical supply chain chokepoints - such as its restrictions on rare earth elements. Supply chains around the world will be exposed to geoeconomic confrontation, with resources becoming less available.

Adversarial AI
As AI has become a more vital part of business operations, it is also introducing businesses to more risks to cyberattacks, as AI can help hostile actors identify weaknesses in supply chains at a faster and less-detectable rate. 

Climate inaction
Commitments to climate action are decreasing, with the impacts of climate change accelerating at a rapid rate. Climate vulnerable states will be impacted by these actions, with more frequent droughts and crop failings resulting in limited resources. 

Space Tensions
Competition for space supremacy is growing, with global powers testing deterrence and searching for vulnerabilities. In doing so, their tactics, which include GPS jamming and signal spoofing, affect both military systems and civilian infrastructure, such as navigation and communication. The risk of accidental collisions and retaliation is rising fast. 

Henry continues: "Between these spheres, competition is playing out across all domains, from politics and economics, to trade, cyberspace, space and our societies. In this fluid state where the lines between cooperation, competition and conflict increasingly blur, the vectors of geopolitical risk – the threats – are evolving rapidly and demand constant intelligence and analysis."

Regional outlooks

As well as looking at shared trends around the world, Dragonfly examined the regional outlooks of various states. For each region, it has run a series of scenarios, examining how likely each scenario is and how disruptive it could be.

In its research, it found that the US is likely to be more volatile in 2026 than before. The November 2026 midterm elections are viewed as a pivotal moment, with the possibility of Republicans loosing their congressional majority, which could heighten civil unrest risks. 

Growing nationalism is becoming a cause of concern in Europe, with a tightening of immigration controls and border restrictions increasing the risk of supply chain bottlenecks. This would also likely worsen labour shortages, particularly within hospitality, healthcare and construction. 

Dragonfly has run a great deal of scenarios across various regions, exploring how businesses and governments should prepare in order to avoid disruption.