Businesses identify economic and societal risks as most pressing with cyber risk becoming more important, according to a World Economic Forum survey data which is published today by strategic partners of the Forum’s Risks Report, Marsh & McLennan Companies and Zurich Insurance Group.
Unemployment, fiscal crises and the failure of a nation’s government to provide stability are the top risks facing businesses globally, according to a new survey published by the World Economic Forum (WEF), while cyber risks are rising in importance.
The results are taken from the WEF’s Executive Opinion Survey (EOS), which captures information on a broad range of socio-economic issues from a representative sample of business leaders around the world. The findings of the latest survey were based on responses from 12,411 executives across 136 countries, who were asked to identify the five biggest risks to doing business in their respective countries from a list of 29 risks.
Global risks of highest concern
Executives’ responses identified economic, geopolitical, social and technological risks as likely to carry the greatest dangers for their businesses over the next 10 years.
John Scott, Zurich Insurance Group, said of the findings: “While economic growth and technological development create new opportunities for governments and businesses, augmented geopolitical turbulence led to uncertainties about how to manage resilience in tempestuous times. Today it is a must for businesses to have clear risk management strategies in place. But at the same time, executives should start building resilience to the risks that emerge. Looking at the survey results, we can say that in the medium-term, business leaders, while focusing on social and economic risks, clearly underestimate the potential impact of environmental and technological ones.”
John Drzik, President of Global Risk & Digital, Marsh, said: “While the fragility of the global economic recovery the chief cause of corporate concern, businesses are increasingly becoming worried about the potential for cyber and technology-related risks to threaten their ability to operate. With geopolitical risks increasingly becoming cyber-related, businesses in many of world’s largest economies are now ranking cyber as their top risk. Organizations need to ensure they fully understand how these risks could impact their operations and take appropriate mitigation measures.”
Results from the EOS form part of the WEF’s annual flagship Global Risks report, which is produced annually in conjunction with partners Marsh & McLennan Companies (MMC) and Zurich Insurance Group (Zurich). The next edition of the full report will be published in January 2018.
Risk perception by regions
Executives in most regions highlighted unemployment or ‘underemployment’ and ‘fiscal crises’ as the two greatest risks, although those in North America and East Asia and Pacific regions were most concerned by risks of cyber attacks and asset bubbles.
Responding to the geopolitical turmoil, sometimes fueled by protectionist policies, business leaders in Europe, South Asia, Latin America and the Caribbean and Sub-Saharan Africa were most worried about the potential failure of national governance.
In Europe, business leaders added ‘failure of financial mechanisms or institutions,’ to the list of pressing risks, reflecting past turbulence in financial markets. In South Asia, rapid growth in urban centers led executives in that region to highlight ‘failure of urban planning’ and ‘failure of critical infrastructure’ as the key potential threats to their businesses.
Risks associated with the ‘failure of climate change adaptation’ elicited very little concern among those threats deemed likely to pose the gravest threats over the next 10 years – only Canadian executives put climate change in their top risks list, albeit ranking it lower than some other risks. The threat of potential terrorist attacks worried executives in North America and the Middle East and Northern Africa, but failed to make it to the top of the ranking among businesses in the rest of the world.
The EOS was conducted between February and June 2017. The full worldwide results will be published in January 2018 along with the new Global Risks Report.