Iceland
Read with care
Third illustrative run, on the second-pass scenario set. The capability scores are candidate ratings and the test settings were drafted with the scenario records in the second pass; neither has been adopted. Scores are from the GINC National Capability Index 2026, which describes them as candidate ratings. Exposure is set nation by nation from the CIA World Factbook 2025 and the scenario’s regional exposure. Results show the method working on real scores; they are not findings about any nation. How the tests work.
Vulnerability and opportunity
Archetype: Climbers. Low vulnerability, and gains from open markets and digital public services. One of 39 nations with a similar pattern of results.
Well placed over 10 years: lower vulnerability, higher opportunity than the median nation.
- Vulnerability · 10 years
- 13.8
- rank 141 of 197 · 3 years: 13.6
- Opportunity · 10 years
- +10.4
- rank 41 of 197 · 3 years: +10.7
- Shock absorbed
- 41%
- by its own buffers, across downside scenarios
- Policy dividend
- +0.17
- expected index points from best practice
- Breadth
- 10of 10
- scenarios in which a domain falls a band
- Weakest link
- Semiconductors & Advanced Computing
- weakest point in 1 scenarios
Main drivers of vulnerability over 10 years: Hybrid coercion, Regional war spillover, AI labour shock. Highest exposure indicators: share of oil and gas use not met by domestic production; internet users as a share of population; urban share of population; refugees hosted per head of population; public debt relative to gdp; share of population aged 65 and over.
Downside scenarios: load test
Change in Iceland’s capability index under each scenario at Standard Severe and current plans, largest fall first.
ScenarioChange in index, points
| Scenario | Exposure | Change | No response | Best practice | Rank shift | Bands lost | Weakest point |
|---|---|---|---|---|---|---|---|
| Regional war spillover S03 | High 0.91 | −0.84 | −1.27 | −0.57 | ▼ 2 | 28 | Strategic Strike & Missile Defence 0 · Inception |
| Cryptographic trust break S09 | High 0.91 | −0.77 | −1.13 | −0.50 | 0 | 25 | Cyber & Electromagnetic Operations 2.1 · Inception |
| Severe pandemic S10 | High 0.84 | −0.73 | −1.29 | −0.57 | 0 | 27 | Biotechnology & Health Technologies 4.6 · Nascent |
| AI labour shock S08 | High 0.86 | −0.68 | −1.27 | −0.55 | 0 | 26 | Artificial Intelligence 4 · Nascent |
| Hybrid coercion S04 | High 0.79 | −0.60 | −0.86 | −0.38 | ▼ 1 | 21 | Maritime Power 2.1 · Inception |
| Trade bloc rupture S01 | Medium 0.55 | −0.51 | −0.80 | −0.35 | ▲ 1 | 18 | Semiconductors & Advanced Computing 0.3 · Inception |
| Global funding seizure S02 | High 0.74 | −0.49 | −0.92 | −0.40 | ▲ 1 | 19 | Economic Output & Productivity 7.8 · Foundational |
| Core disaster S07 | High 0.62 | −0.40 | −0.86 | −0.37 | ▲ 2 | 14 | Energy Infrastructure 7.9 · Foundational |
| Legitimacy rupture S05 | Medium 0.45 | −0.27 | −0.57 | −0.24 | ▲ 1 | 7 | Force Generation & Mobilisation 0.7 · Inception |
| Breadbasket failure S06 | Low 0.25 | −0.21 | −0.39 | −0.17 | ▲ 1 | 7 | Diplomatic Statecraft & Global Networks 7.8 · Foundational |
Where each scenario lands
Change in each of the nine capability domains, in points. Darker is a larger fall.
| Scenario | CT Critical Technology | SI Strategic Infrastructure | NS National Security | HC Human Capital | II Information & Influence | GI Governance & Integrity | FS Financial Strength | PI Production & Innovation | TI Trade & Investment |
|---|---|---|---|---|---|---|---|---|---|
| Regional war spillover | −0.48 | −1.15 | −0.88 | −0.44 | −0.44 | −1.11 | −1.03 | −0.88 | −1.14 |
| Cryptographic trust break | −0.96 | −0.56 | −0.92 | · | −1.24 | −1.16 | −1.09 | −0.47 | −0.53 |
| Severe pandemic | −0.74 | −0.39 | −0.32 | −0.94 | −0.82 | −0.88 | −0.82 | −0.81 | −0.81 |
| AI labour shock | −0.72 | −0.34 | · | −0.92 | −0.80 | −0.95 | −0.80 | −0.79 | −0.79 |
| Hybrid coercion | −0.45 | −0.99 | −0.91 | · | −1.10 | −1.14 | · | −0.41 | −0.41 |
| Trade bloc rupture | −0.66 | −0.26 | −0.23 | −0.26 | −0.61 | −0.58 | −0.61 | −0.59 | −0.82 |
| Global funding seizure | −0.29 | −0.32 | · | −0.32 | −0.29 | −0.66 | −1.07 | −0.75 | −0.67 |
| Core disaster | −0.02 | −0.61 | −0.19 | −0.48 | −0.22 | −0.54 | −0.58 | −0.49 | −0.49 |
| Legitimacy rupture | −0.16 | −0.17 | −0.32 | −0.16 | −0.37 | −0.52 | −0.42 | −0.16 | −0.18 |
| Breadbasket failure | −0.11 | −0.26 | −0.09 | −0.25 | −0.24 | −0.25 | −0.27 | −0.20 | −0.23 |
Smaller to larger fall
Columns: CT Critical Technology · SI Strategic Infrastructure · NS National Security · HC Human Capital · II Information & Influence · GI Governance & Integrity · FS Financial Strength · PI Production & Innovation · TI Trade & Investment.
Upside scenarios: capture test
Net position in each upside scenario: what Iceland is ready to capture, less what it stands to lose.
| Scenario | Position | Net | Capture | Loss | Readiness | Rank | Binding capability |
|---|---|---|---|---|---|---|---|
| Outbreak defence succeeds S20 ↗ | Gainer | +35.2 | 36.9 | 1.7 | 45 | 36 | Biotechnology & Health Technologies 6 · Foundational |
| Clean power threshold S15 ↗ | Gainer | +31.6 | 31.9 | 0.3 | 37 | 30 | Energy Technologies 4.2 · Nascent |
| Middle East settlement S14 ↗ | Gainer | +19.2 | 20.4 | 1.2 | 38 | 41 | Intelligence & Assessment 4.2 · Nascent |
| Chronic disease advance S19 ↗ | Gainer | +14.8 | 33.4 | 18.6 | 47 | 41 | Biotechnology & Health Technologies 6 · Foundational |
| Public service leap S18 ↗ | Mixed | +8.0 | 11.7 | 3.7 | 44 | 40 | Connectivity, Cyber & Trust Technologies 4.2 · Nascent |
| Market access opening S12 ↗ | Mixed | +6.6 | 24.1 | 17.5 | 52 | 49 | Energy Infrastructure 8.8 · Foundational |
| Automated discovery step S17 ↗ | Mixed | +5.4 | 20.1 | 14.6 | 22 | 40 | Semiconductors & Advanced Computing 1.3 · Inception |
| Great-power détente S13 ↗ | Mixed | −1.5 | 12.1 | 13.6 | 27 | 52 | Semiconductors & Advanced Computing 1.3 · Inception |
| Debt service reset S11 ↗ | Mixed | −6.7 | 2.2 | 8.8 | 57 | 179 | Energy Infrastructure 8.8 · Foundational |
| Water-efficient food leap S16 ↗ | Mixed | −7.3 | 3.7 | 10.9 | 45 | 132 | Biotechnology & Health Technologies 6 · Foundational |
Reverse stress test
Working backwards from an outcome to the conditions most likely to produce it for Iceland, over 10 years. Headroom is how many times Standard Severe the nearest single scenario would have to be. The lever is the capability where a change would move the result most.How to read it.
| Routes to failure | Basket | Likelihood | Most likely route | Headroom | Lever |
|---|---|---|---|---|---|
| Breakdown of state function | 15.2 Advanced → Established | 4.7% Possible · rank 24 | Hybrid coercion Severe + Cryptographic trust break Majorplans fail | ×2.1 | Cyber & Electromagnetic Operations 4 |
| Loss of financial stability | 12.7 Established → Transitional | 2.7% Possible · rank 50 | Global funding seizure Major + Cryptographic trust break Severeplans fail | ×2.6 | Quantum Technologies 1.3 |
| Broad fall in governance and integrity | 15.0 Established → Transitional | 2.2% Possible · rank 35 | Hybrid coercion Severe + Cryptographic trust break Severeplans fail | ×2.6 | Quantum Technologies 1.3 |
| Strategic awareness failure | 3.5 Nascent → Inception | 2.0% Possible · rank 12 | Hybrid coercion Major + Cryptographic trust break Severeplans fail | ×1.9 | Quantum Technologies 1.3 |
| Collapse in energy security | 6.1 Foundational → Nascent | 1.8% Possible · rank 6 | Regional war spillover Severe + Hybrid coercion Majorplans fail | ×2.0 | Maritime Power 3.8 |
| Broad fall in financial strength | 12.2 Established → Foundational | 1.4% Possible · rank 66 | Global funding seizure Extremeplans fail | ×2.8 | Sovereign Capital & External Financial Power 9.4 |
| Breakdown of information trust | 10.2 Transitional → Foundational | 1.4% Possible · rank 19 | Hybrid coercion Severe + Cryptographic trust break Severeplans fail | ×2.4 | Quantum Technologies 1.3 |
| Rupture in trade and supply | 10.0 Transitional → Foundational | 1.1% Possible · rank 68 | Trade bloc rupture Major + Regional war spillover Severeplans fail | ×1.9 | Maritime Power 3.8 |
| Broad fall in information and influence | 8.0 Foundational → Nascent | 1.1% Possible · rank 17 | Hybrid coercion Severe + Cryptographic trust break Severeplans fail | ×2.4 | Quantum Technologies 1.3 |
| Diplomatic isolation | 8.8 Foundational → Nascent | 1.1% Possible · rank 15 | Hybrid coercion Severe + Cryptographic trust break Severeplans fail | ×2.4 | Quantum Technologies 1.3 |
| Rule of law failure | 15.4 Advanced → Established | 1.1% Possible · rank 38 | Hybrid coercion Severe + Cryptographic trust break Severeplans fail | ×2.4 | Quantum Technologies 1.3 |
| Failure of digital lifelines | 10.1 Transitional → Foundational | 1.0% Possible · rank 5 | Hybrid coercion Severe + Cryptographic trust break Severeplans fail | ×2.4 | Quantum Technologies 1.3 |
| Broad fall in strategic infrastructure | 9.6 Transitional → Foundational | 0.9% Unlikely · rank 10 | Regional war spillover Severe + Hybrid coercion Severeplans fail | ×2.6 | Maritime Power 3.8 |
| Broad fall in trade and investment | 10.7 Transitional → Foundational | 0.8% Unlikely · rank 41 | Trade bloc rupture Severe + Regional war spillover Severeplans fail | ×2.6 | Maritime Power 3.8 |
| Health system failure | 15.7 Advanced → Established | 0.8% Unlikely · rank 65 | Global funding seizure Major + Severe pandemic Severeplans fail | ×2.1 | Biotechnology & Health Technologies 6 |
| Loss of industrial capacity | 10.3 Transitional → Foundational | 0.6% Unlikely · rank 30 | Regional war spillover Major + Severe pandemic Extremeplans fail | ×3.4 | Biotechnology & Health Technologies 6 |
| Broad fall in production and innovation | 11.6 Transitional → Foundational | 0.6% Unlikely · rank 25 | Regional war spillover Major + Severe pandemic Extremeplans fail | ×3.4 | Biotechnology & Health Technologies 6 |
| Broad fall in human capital | 14.5 Established → Transitional | 0.3% Unlikely · rank 21 | Regional war spillover Major + Severe pandemic Extremeplans fail | ×3.2 | Biotechnology & Health Technologies 6 |
| Food and water failure | 11.8 Transitional → Foundational | 0.3% Unlikely · rank 112 | Regional war spillover Severe + Hybrid coercion Extremeplans fail | ×3.4 | Cyber & Electromagnetic Operations 4 |
| Education pipeline failure | 14.5 Established → Transitional | 0.1% Remote · rank 61 | Regional war spillover Severe + Severe pandemic Extremeplans fail | ×3.4 | Biotechnology & Health Technologies 6 |
| Broad fall in critical technology | 3.2 Nascent → Inception | — Remote · rank 59 | AI labour shock Extreme + Severe pandemic Extremeplans fail | ×3.1 | Artificial Intelligence 5.3 |
| Broad fall in national security | 2.0 Inception | — No route · rank 88 | Already at the foot of the scale | ×3.3 | — |
| Loss of advanced technology base | 1.4 Inception | — No route · rank 57 | Already at the foot of the scale | ×3.9 | — |
| Defence readiness failure | 1.9 Inception | — No route · rank 122 | Already at the foot of the scale | ×3.0 | — |
| Loss of strategic deterrence | 0.6 Inception | — No route · rank 58 | Already at the foot of the scale | ×7.1 | — |
| Routes to prosperity | Basket | Likelihood | Most likely route | Headroom | Lever |
|---|---|---|---|---|---|
| Reliable low-cost energy | 6.5 Foundational → Foundational | 3.0% Possible · rank 35 | Clean power threshold Extreme | ×1.6 | Energy Technologies 4.2 |
| Stronger health and biotechnology | 12.4 Established → Established | 2.2% Possible · rank 48 | Chronic disease advance Severe + Outbreak defence succeeds Severe | ×1.6 | Biotechnology & Health Technologies 6 |
| Broad rise in governance and integrity | 15.0 Established → Advanced | 0.9% Unlikely · rank 49 | Chronic disease advance Major + Outbreak defence succeeds Extreme | ×2.0 | Biotechnology & Health Technologies 6 |
| Capable digital government | 14.7 Established → Advanced | 0.9% Unlikely · rank 49 | Chronic disease advance Major + Outbreak defence succeeds Extreme | ×2.0 | Biotechnology & Health Technologies 6 |
| Trusted public institutions | 14.7 Established → Advanced | 0.5% Unlikely · rank 55 | Chronic disease advance Severe + Outbreak defence succeeds Extreme | ×2.2 | Biotechnology & Health Technologies 6 |
| Broad rise in critical technology | 3.2 Nascent → Nascent | 0.4% Unlikely · rank 45 | Chronic disease advance Severe + Outbreak defence succeeds Extreme | ×2.5 | Biotechnology & Health Technologies 6 |
| Frontier AI and compute | 3.3 Nascent → Nascent | 0.4% Unlikely · rank 44 | Automated discovery step Extreme + Outbreak defence succeeds Severe | ×2.5 | Semiconductors & Advanced Computing 1.3 |
| Broad rise in human capital | 14.5 Established → Advanced | 0.3% Unlikely · rank 46 | Chronic disease advance Severe + Outbreak defence succeeds Extreme | ×2.4 | Biotechnology & Health Technologies 6 |
| Broad rise in strategic infrastructure | 9.6 Transitional → Transitional | 0.1% Remote · rank 47 | Market access opening Extreme + Clean power threshold Extreme | ×2.5 | Energy Technologies 4.2 |
| Research translated into value | 12.2 Established → Established | 0.1% Remote · rank 44 | Clean power threshold Extreme + Automated discovery step Extreme | ×2.7 | Energy Technologies 4.2 |
| Broad rise in production and innovation | 11.6 Transitional → Established | under 0.1% Remote · rank 42 | Market access opening Extreme + Clean power threshold Extreme | ×2.4 | Energy Technologies 4.2 |
| Broad rise in trade and investment | 10.7 Transitional → Established | under 0.1% Remote · rank 48 | Market access opening Extreme + Clean power threshold Extreme | ×2.4 | Energy Infrastructure 8.8 |
| Higher-value international business | 11.8 Transitional → Established | under 0.1% Remote · rank 46 | Market access opening Extreme + Clean power threshold Extreme | ×2.5 | Energy Infrastructure 8.8 |
| Sophisticated export strength | 10.4 Transitional → Transitional | under 0.1% Remote · rank 48 | Market access opening Extreme + Clean power threshold Extreme | ×2.7 | Energy Infrastructure 8.8 |
| Higher-value manufacturing | 5.9 Nascent → Foundational | under 0.1% Remote · rank 47 | Automated discovery step Extreme + Outbreak defence succeeds Extreme | ×2.7 | Biotechnology & Health Technologies 6 |
| Adaptable skilled workforce | 14.1 Established → Advanced | under 0.1% Remote · rank 50 | Chronic disease advance Extreme + Outbreak defence succeeds Extreme | ×2.7 | Biotechnology & Health Technologies 6 |
| Stronger information environment | 7.3 Foundational → Foundational | under 0.1% Remote · rank 45 | Chronic disease advance Extreme + Outbreak defence succeeds Extreme | ×2.0 | Biotechnology & Health Technologies 6 |
| Broad rise in financial strength | 12.2 Established → Established | under 0.1% Remote · rank 49 | Clean power threshold Extreme + Chronic disease advance Extreme | ×2.6 | Biotechnology & Health Technologies 6 |
| Deeper long-term finance | 11.8 Transitional → Established | under 0.1% Remote · rank 46 | Clean power threshold Extreme + Chronic disease advance Extreme | ×2.5 | Energy Technologies 4.2 |
| Secure food and water supply | 11.8 Transitional → Established | under 0.1% Remote · rank 61 | Clean power threshold Extreme + Outbreak defence succeeds Extreme | ×2.7 | Biotechnology & Health Technologies 6 |
| Broad rise in national security | 2.0 Inception | — No route · rank 50 | No route found · closest 1.0 of 1.5 | ×4.5 | — |
| Broad rise in information and influence | 8.0 Foundational → Transitional | — Remote · rank 52 | Middle East settlement Extreme + Outbreak defence succeeds Extreme | ×2.3 | Biotechnology & Health Technologies 6 |
| Assured space services | 1.4 Inception | — No route · rank 50 | No route found · closest 1.4 of 1.5 | ×3.1 | — |
| More deployable joint force | 2.3 Inception | — No route · rank 50 | No route found · closest 1.0 of 1.5 | ×4.9 | — |
| Wider international influence | 8.8 Foundational → Transitional | — Remote · rank 57 | Middle East settlement Extreme + Outbreak defence succeeds Extreme | ×2.7 | Biotechnology & Health Technologies 6 |