Major WEF report takes global business risk pulse

Economic issues dominate concerns for businesses at the global level, whilst cyber risk is the number one worry for those doing business in Europe and North America. These are among the conclusions of a World Economic Forum survey of nearly 13,000 business leaders who were asked to name the top five global risks of doing business in their country over the next 10 years.

Globally, three of the top five risks are related to the economy, with unemployment or underemployment coming in third and energy price shock ranking fourth. Failure of national governance and profound social instability ranked fifth and sixth, respectively.

Head of global risks and geopolitical agenda at the World Economic Forum, Emilio Granados-Franco said the results show a growing concern around governmental leadership against a worrying economic backdrop.

“At a time when global economic growth appears fragile, business leaders are deeply concerned by their governments’ fiscal resilience. Meanwhile, cyber threats remain a major risk due to their rapid evolution and increasingly disruptive potential.

“But in examining risk at the regional level, we also see various, interconnected drivers shaping diverse risks landscapes. Only by addressing economic risks and societal, technological, and environmental risks in an integrated manner, can stakeholders truly build resiliency,” he added.

Risks related to the environment were the focus for businesses in South Asia and in East Asia and the Pacific, with both regions having suffered devastating natural disasters and extreme weather events.

Social challenges rank high in Eurasia, Latin America and in the Caribbean, where governments are still aiming to deliver critical social services.

In the Middle East and North Africa energy price shock is a key concern,, and in sub-Saharan Africa, where youth unemployment is above 13%, executives are worried by their economies’ inability to create jobs.

Europe

Commenting on the most pressing risks for CEOs in the four largest EU economies (Germany, France, Italy and the UK), chief executive of Zurich UK, Tulsi Naidu said: "Data breaches and cyber attacks have caused billions of pounds of damage to organisations across the globe. These attacks are becoming increasingly frequent and sophisticated at an organisational and at a personal level, and it is vital that organisations and individuals take the right precautions to protect themselves.

"While organisations are increasingly alert to the impact cyber attacks can have, many do not yet fully appreciate the dangers, and must step up their efforts to combat the threat. As such, this is an area of insurance we expect to see grow.”

Top five risks in Europe (Source: WEF)

1. Cyber attack
2. Asset bubble
3. Interstate conflict
4. Energy price shock
5. Fiscal crises

Analysis for the Regional Risks for Doing Business report was carried out from January to April 2019. Some 12,897 executives from 133 countries were asked to choose up to five risks from a list of 30, including terrorist attacks, extreme weather events and state collapse or crisis.

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