Most Stable Countries for Business

In today’s interconnected world, businesses expanding into new markets face unprecedented challenges. Geopolitical instability, climate change, economic volatility, and social unrest can severely disrupt operations and investments. This guide provides a practical, data-driven framework for assessing country resilience, empowering businesses to make informed decisions and navigate global uncertainty.

This article is part of our Business Attraction Index Series, where we try to figure out the best places to start and grow your business.

Why Resilience Matters

Resilience, a country’s ability to withstand and recover from shocks, is paramount for business success. Resilient countries offer greater stability, predictability, and minimize disruptions to operations. They protect investments and facilitate faster recovery, making them attractive destinations for long-term growth. This analysis utilizes a combined assessment approach, incorporating multiple factors to create a holistic view of resilience for market expansion.

Methodology: A Multi-Index Approach

This assessment combines three established indices, weighted to reflect their relative importance for business expansion:

• FM Global Resilience Index (40%): Focuses specifically on business environment resilience, assessing factors like supply chain robustness, natural hazard risk quality, and political risk. A higher rank indicates greater resilience (lower risk). This receives the highest weighting due to its direct focus on business operations. https://www.fm.com/resources/resilience-index
• Global Peace Index (GPI) (30%): Measures national peacefulness by considering levels of violence, crime, and militarization. A lower GPI rank signifies a more peaceful environment. Peace and security are foundational for stable business operations. https://www.visionofhumanity.org/wp-content/uploads/2024/06/GPI-2024-web.pdf
• Sustainable Responsibility Index (SRI) (30%): Evaluates national ESG (Environmental, Social, and Governance) performance, reflecting long-term sustainability and social responsibility. A higher SRI rank suggests stronger ESG performance. Sustainable practices are vital for long-term value creation and stakeholder confidence. https://fundforpeace.org/SRI/dashboard.html

There are many other similar indexes focused on particular topics. They roughly show a similar pattern and index. A good example is the Global Organized Crime Index (OCI)

Calculating the Combined Resilience Score:

1. FM Global Score: Convert the FM Global Rank to a score out of 100 (100 for rank 1, 0 for the worst rank). Use the best regional score if available.
2. GPI Score: Convert the GPI Rank to a score out of 100 (100 for rank 1, 0 for the worst rank).
3. SRI Score: Convert the SRI Rank to a score out of 100 (100 for rank 1, 0 for the worst rank). Use the average rank when joint rankings occur.
4. Combined Resilience Score: Calculate the weighted average: (0.4 * FM Global Score) + (0.3 * GPI Score) + (0.3 * SRI Score)

Country Resilience Tiers

Based on their combined resilience scores, we have categorized them into three tiers:

Country Resilience Summaries

Singapore:

• FM Global Resilience Index Rank: 3
• GPI Rank: 5
• SRI Rank: 17/18
• Overview: Singapore excels in business environment resilience due to its efficient logistics, political stability, and low corruption. While generally peaceful, its GPI ranking could be influenced by regional instability. Its SRI rank is moderate, indicating that while there is a focus on economic growth and stability, there’s room to grow on the social and environmental sustainability fronts.

Denmark:

• FM Global Resilience Index Rank: 1
• GPI Rank: 8
• SRI Rank: 5
• Overview: Denmark consistently demonstrates high resilience, securing top rankings across multiple indices. Its robust infrastructure, reliable supply chains, and stable political landscape create a secure and attractive environment for business operations. Coupled with its strong commitment to sustainability and social responsibility, it’s an ideal market for expansion.

Estonia:

• FM Global Resilience Index Rank: 22
• GPI Rank: 24
• SRI Rank: 17/18
• Overview: Estonia shows good resilience overall, benefiting from a peaceful domestic environment and relatively strong ESG performance. Its FM Global rank is moderate, possibly reflecting economic factors, such as its smaller size and reliance on global trade which increases vulnerability to external shocks.

New Zealand:

• FM Global Resilience Index Rank: 20
• GPI Rank: 4
• SRI Rank: 6
• Overview: New Zealand demonstrates strong resilience, excelling in peace and security, as shown by its top GPI ranking. Its strong SRI rank indicates a commitment to sustainability. The moderate FM Global rank might reflect its geographical isolation and vulnerability to certain natural hazards.

Switzerland:

• FM Global Resilience Index Rank: 4
• GPI Rank: 6
• SRI Rank: 4
• Overview: Switzerland consistently performs well on resilience, benefiting from its neutrality, a robust economy, and a mature approach to social responsibility. This combination of factors makes it an incredibly attractive and stable market for expansion.

UAE:

• FM Global Resilience Index Rank: 39
• GPI Rank: 53
• SRI Rank: 17/18
• Overview: The UAE shows moderate and improving resilience. Recent progress in peace and security has contributed to a more stable environment, complemented by moderate ESG performance. It’s worth noting that the UAE is investing in diversifying its economy and promoting sustainable practices, suggesting further enhancements to its resilience profile in the coming years.

Lithuania:

• FM Global Resilience Index Rank: 28
• GPI Rank: 31
• SRI Rank: 27/28
• Overview: Lithuania presents a mixed resilience profile. While its peacefulness is a key strength, its lower rankings on the FM Global and SRI indices suggest some challenges related to business environment risks and sustainable practices. This highlights the importance of thorough due diligence before expansion.

Canada:

• FM Global Resilience Index Rank: 10/12/16 (10 is best)
• GPI Rank: 11
• SRI Rank: 4
• Overview: Canada demonstrates robust resilience, particularly in its strong performance on social responsibility and a peaceful society. The regional variations captured by the FM Global Index suggest businesses should assess specific locations within Canada for their operational resilience.

Australia:

• FM Global Resilience Index Rank: 13
• GPI Rank: 19
• SRI Rank: 10
• Overview: Australia exhibits high resilience, benefiting from its strong economy, stable political system, and good performance on sustainability indicators. Its moderate GPI rank reflects a generally secure environment and geopolitical factors. Geographic isolation and certain natural hazard exposures may influence specific aspects of its FM Global ranking.

Netherlands:

• FM Global Resilience Index Rank: 21
• GPI Rank: 18
• SRI Rank: 9
• Overview: The Netherlands consistently performs well in resilience assessments. A stable political system, developed economy, and robust social responsibility practices create a strong foundation for business operations.

Sweden:

• FM Global Resilience Index Rank: 6
• GPI Rank: 39
• SRI Rank: 2
• Overview: Sweden stands out for its exceptional resilience, with very high rankings in business environment strength and social responsibility. While geopolitical factors and some internal social unrest influence its GPI, it remains a generally peaceful and secure nation.

US:

• FM Global Resilience Index Rank: 10/12/16 (10 is best)
• GPI Rank: 132
• SRI Rank: 15
• Overview: The US offers a mixed resilience profile. While it enjoys a strong economy and ranks highly on business environment resilience in certain regions, its strikingly low GPI rank highlights significant societal challenges, including high levels of violence and political polarization. These factors should be carefully considered for their potential impact on business operations. A moderate SRI rank indicates areas for continued ESG development.

UK:

• FM Global Resilience Index Rank: 15
• GPI Rank: 34
• SRI Rank: 12
• Overview: The UK demonstrates moderate resilience. While its long history of political stability and developed economy contribute to a secure environment for business, socio-political factors and fluctuating economic conditions can pose challenges and should be monitored.

Germany:

• FM Global Resilience Index Rank: 5
• GPI Rank: 20
• SRI Rank: 8
• Overview: Germany’s high resilience ranking across indicators reflects a well-rounded profile, balancing a strong business environment with peacefulness and a commitment to sustainability. This creates an attractive and stable market for long-term business operations.

France:

• FM Global Resilience Index Rank: 17
• GPI Rank: 86
• SRI Rank: 16
• Overview: France demonstrates a mixed resilience profile, with moderate business environment resilience and ESG performance but a comparatively lower GPI rank. Geopolitical factors and internal social and political dynamics can impact its stability. Thorough due diligence and risk assessment are advised.

Japan:

• FM Global Resilience Index Rank: 31
• GPI Rank: 17
• SRI Rank: 14
• Overview: Japan benefits from a resilient business environment, bolstered by a robust economy and proactive disaster preparedness measures. Its GPI ranking reflects a peaceful society. Its moderate SRI score shows a relatively good performance in key areas of social responsibility, while also highlighting opportunities for improvement in specific areas of environmental sustainability and governance.

Finland:

• FM Global Resilience Index Rank: 7
• GPI Rank: 13
• SRI Rank: 3
• Overview: Finland consistently demonstrates exceptional resilience, reflecting strength across all aspects of the analysis. High rankings on all indices show a secure, sustainable, and highly attractive environment for business expansion.

Ireland:

• FM Global Resilience Index Rank: 11
• GPI Rank: 2
• SRI Rank: 13
• Overview: Ireland offers very high resilience overall, excelling in peace and security. A strong business environment further bolsters its attractiveness for market expansion. While its SRI score is good, there are opportunities for further progress in specific aspects of corporate social responsibility and sustainable development.

Norway:

• FM Global Resilience Index Rank: 8
• GPI Rank: 28
• SRI Rank: 1
• Overview: Norway consistently showcases exceptional resilience, particularly its world-leading commitment to social responsibility, as indicated by its top SRI ranking. Combined with high peacefulness and a stable business environment, it remains a very attractive market.

South Korea:

• FM Global Resilience Index Rank: 32
• GPI Rank: 46
• SRI Rank: 20
• Overview: South Korea demonstrates good business environment resilience, though geopolitical factors influence its GPI ranking. It has a moderate SRI rank, reflecting ongoing development in ESG practices.

Taiwan:

• FM Global Resilience Index Rank: 48
• GPI Rank: 43
• SRI Rank: N/A
• Overview: Taiwan shows moderate resilience in its business environment, though geopolitical risks and regional tensions are key considerations, impacting its GPI score. A lack of SRI data makes a full evaluation of its sustainability performance challenging. Due diligence should focus on these geopolitical and sustainability considerations.

Portugal:

• FM Global Resilience Index Rank: 30
• GPI Rank: 7
• SRI Rank: 22/23
• Overview: Portugal displays good resilience overall, with a relatively peaceful society and a moderately resilient business environment. Its SRI ranking reveals room for continued development in sustainability and social responsibility practices.

Czech Republic:

• FM Global Resilience Index Rank: 26
• GPI Rank: 12
• SRI Rank: 27/28
• Overview: The Czech Republic shows good overall resilience, characterized by a generally stable business environment and high peacefulness. Opportunities exist to enhance its resilience further by strengthening social responsibility and sustainability initiatives.

Poland:

• FM Global Resilience Index Rank: 25
• GPI Rank: 32
• SRI Rank: 25/26
• Overview: Poland’s resilience is moderate. Its peaceful environment is a key strength. However, both its business environment and ESG performance have room for improvement to enhance its attractiveness for market expansion.

Practical Considerations for Businesses

• Due Diligence: Beyond these indices, conduct thorough, industry-specific due diligence. Evaluate political and economic stability, regulatory frameworks, market conditions, cultural factors, and potential operational challenges.
• Dynamic Monitoring: Geopolitical, economic, and social landscapes shift constantly. Monitor target markets for changing risk profiles, using these indices as a baseline but incorporating real-time information.
• Risk Mitigation Strategies: Develop comprehensive risk mitigation and business continuity plans. Consider supply chain diversification, political risk insurance, cybersecurity enhancements, and robust crisis management protocols.
• Identify Opportunities: Resilience reveals opportunities. Stable and sustainable markets are often attractive for long-term growth. Look for nations actively addressing vulnerabilities and demonstrating improvement in their resilience profiles.
• Prioritize ESG: Strong ESG performance attracts socially conscious investors and customers. Thoroughly assess target markets’ SRI rankings. Engage with local stakeholders and understand their social and environmental priorities.

Conclusion

In today’s complex world, understanding country resilience is paramount for market expansion success. Combining the FM Global Resilience Index, the GPI, and the SRI provides businesses with a practical and data-driven assessment tool. The resulting rankings and country summaries offer valuable insights for strategic planning, risk management, and long-term investment decisions. By prioritizing resilience, businesses can navigate uncertainty, protect their interests, and unlock sustainable growth opportunities in dynamic global markets. Continuous monitoring and adaptation remain crucial in the evolving landscape of global resilience. Remember: These indices are valuable tools, but thorough, context-specific due diligence remains essential.

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