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Cyber attacks are the second biggest challenge for executives, and the most important one for European and North American businesses for the second year in a row, highlighting the increased sophistication and proliferation of this type of attack, according to the World Economic Forum’s Regional Risks for Doing Business 2019 report. It’s a survey of nearly 13,000 business leaders in 130 countries.
Environmental-related risks are the top concerns in South Asia and in East Asia and the Pacific, with both regions having suffered natural disasters and extreme weather. Social challenges rank high in Eurasia, affected by economic slowdown, and 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” leads due to ongoing price and production volatility, and in sub-Saharan Africa, where youth unemployment is above 13 per cent, executives are worried by their economies’ inability to create jobs. While global cooperation is still the most effective tool to address these varying risks, the report’s mapping highlights the areas in which regions can act.
Emilio Granados-Franco, Head of Global Risks and Geopolitical Agenda at the World Economic Forum said: “At a time when global economic growth appears fragile, business leaders are deeply concerned by their governments’ fiscal resilience. Meanwhile, cyberthreats 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.”
The Regional Risks for Doing Business 2019 report is published with the firms Marsh & McLennan Companies and Zurich Insurance Group. John Drzik, President of Global Risk and Digital at Marsh, said: “Cybersecurity remains the most concerning risk to business leaders in advanced economies, and growing technology dependence for many businesses will only amplify this. Combined with fractious geopolitical developments, and growing economic concerns, executives face a very challenging portfolio of potential threats. Business leaders should reevaluate their underlying view of the global risk environment and make greater efforts to strengthen their corporate agility and resilience.”
And Eugenie Molyneux, Chief Risk Officer Commercial Insurance at Zurich said: “There is a real existential threat to businesses worldwide. Executives are concerned that governments have too much debt to be able to afford measures that could help avoid a recession, and see cyberattacks as the number one risk in 16 economies representing over 40pc of the world’s GDP. At the same time, businesses are not even factoring in the impact of climate change over the next decade. These three risks need urgent action.”
Globally, three of the top five risks are economic-related with “unemployment or underemployment” coming in third and “energy price shock” ranking fourth.
The latest edition of the survey was carried out from January to April. Business leaders were asked to choose up to five risks from a list of 30, including terrorist attacks, extreme weather events and state collapse or crisis.