The Biggest Global Risks for Business Leaders in 2019
One of the most interesting points mentioned in this year’s Regional Risks to Doing Business Report by World Economic Forum’s Global Risks Initiative is the clear difference between the concerns of business leaders in emerging-market countries versus those in advanced economies.
Basically, technological threats are of most importance to business leaders, in addition to issues such as: gradual balkanization of the internet, continued proliferation of fake news, emerging plans for widespread cryptocurrency deployment, and confusion caused by the 5G network roll-out.
The global economy began to reach a plateau beginning with the 2008 to 2009 crisis, and there are currently signs of an impending recession. The world’s seven largest economies grew at slower rates during the second quarter of 2019 than of that in 2018, causing executives from each region to begin sharing concerns about this discovery.
The past five years have witnessed a 67% increase in cybersecurity breaches as cybercriminals continue to grow bolder in their ambitions and techniques. In areas where the economy is increasingly digitized, including North America and Europe, this has become a pressing issue. High profile breaches have led to heightened fears of foreign hackers gaining the ability to access and disable entire networks.
Employment & Underemployment
On a continent where economic growth has failed to maintain pace with an increasing population, unemployment has grown to be the main concern in Sub-Saharan Africa. Automation has led to a decrease in jobs in the strongest economies, in contrast with shorter working hours. Fiscal crisis, in combination with technological advancement, these arrangements will inevitably worsen.
Energy Price Increase
For any given aspect of business, energy prices present a knock-on effect. As recently shown by the drone attack in Saudi Arabia, shifting subsidies, political disputes and attacks on infrastructure dramatically influence supplies. Exaggerated price spikes could be caused by intense investment activity throughout this sector, leading to a painful economic shock.
National Governance Failure
Corrupt or unstable governments create economic uncertainty, disrupting businesses and unsettling employees. CEOs in Latin America, as well as the Caribbean, are among those most concerned with failures of governance. As witnessed by the recent riots in Chile, such failures may lead to dramatic upheavals.
Serious Social Instability
Instability has been triggered by economic liberalization, paired with political change, by removing steady support of public services. Some civilians have begun engaging in mass protests, such as those in Hong Kong, while others are disengaging from existing social structures altogether.
Data Theft & Fraud
Limited government response has led to repeat criminal behavior, allowing data fraud to grow into a significant business concern. Gathering sensitive data has created damaging opportunities for fraudsters, by creating sizable occasions to target customers.
Regions such as Ukraine, Syria and elsewhere present immediate problems with violent conflict. Forceful U.S. foreign policy is raising tensions throughout Iran and China, as CEOs in Europe are ever watchful of trouble within a weakened EU.
Critical Infrastructure Failure
In areas where lack of investment has led to fundamental system inadequacies, infrastructure failure has become a large concern, especially for Africa and Latin America. Underinvestment in the U.S., as well as climate change in Canada, have caused serious problems in North America, contributing massive strain to critical systems.
Facing the Crisis
A vital foundation for resilience is dependent upon the ability to connect the dots to the bigger picture, in addition to business implications as the world braces for 2020. CEOs are more than capable of identifying main business risks, creating a plan to tackle issues with the right skills, although it can be hard to evaluate current risks.
In conclusion, this year’s survey results show world business leaders confronting a wide range of political and geo-economics volatilities. As we head towards 2020, connecting little tremors with the big picture and business implications will be an important ability to harness for business resilience.