Fears of rising unemployment have topped the list of major business concerns in the latest study by the World Economic Forum (WEF).
The WEF’s Regional Risks for Doing Business 2020 report polled over 12,000 business leaders in 127 countries. The respondents were presented with a core list of 30 global risks and asked to select “the five global risks that you believe to be of most concern for doing business in your country within the next 10 years”.
Globally unemployment topped the list of fears, with a fiscal crisis, the top concern in 2019, coming third.
Unsurprisingly, infectious diseases leapt 28 spots and is the second most recurring risk, appearing in the top 10 in all regions except South Asia. Surveyed regions include East Asia and the Pacific, Eurasia, Europe, Latin America and the Caribbean, Middle East and North Africa, North America, South Asia, sub-Saharan Africa. The survey covers 30 risks, including terrorist attacks, extreme weather events and state collapse or crisis.
While the top risks are mostly related to economics, climate-related risks are causing greater concern this year, with natural catastrophes (up seven places), extreme weather events (up five), biodiversity loss and ecosystem collapse (up eight), and failure of climate-change adaptation (up two) featuring more prominently. Other significant changes include human-made environmental catastrophes (down six), failure of urban planning (down seven), and terrorist attacks (down nine).
“The employment disruptions caused by the pandemic, rising automation and the transition to greener economies are fundamentally changing labour markets,” Saadia Zahidi, Managing Director at the World Economic Forum said. “As we emerge from the crisis, leaders have a remarkable opportunity to create new jobs, support living wages, and reimagine social safety nets to adequately meet the challenges in the labour markets of tomorrow.”
The Regional Risks for Doing Business 2020 is in the form of an interactive map and was developed in partnership with Marsh & McLennan Companies, Zurich Insurance Group, and SK Group. It is part of the Forum’s Global Risks Initiative, a workstream that analyses critical global risks and communicates these risks to stakeholders and the wider public through digital and media assets.
Peter Giger, Group Chief Risk Officer, Zurich Insurance Group, warned that the current pandemic cannot derail efforts to tackle the risks which were at the top of the global agenda prior to the virus.
“COVID-19 is distracting us from certain long-term risks that will be around long after the current crisis is resolved,” he said. “But the pandemic is also having the positive effect of leading many to reassess priorities. This, I hope, will ensure that businesses advance their risk resilience strategies and result in decisive and impactful action to combat existential risks like climate change.”
“The COVID-19 crisis has shone a spotlight on organisational resilience,” said John Doyle, President and Chief Executive Officer of Marsh. “As firms look to the future, they are matching their risk and resilience arrangements with a threat landscape marked by significant customer and workforce behavioural shifts. Just as economic and climate concerns will require firms to refocus business plans, a greater reliance on digital infrastructures will mean a marked increase in cyber risk exposures. To optimize recovery, organizations will need to build greater preparedness into their business models in order to be more resilient in the face of future disruptions.” “The global pandemic has unleashed untold damage to our economies and societies,” warned Lee Hyung Hee President, Social Value Committee, SK Group. “Business leaders in Asia have recognized that risk in their response to the Forum’s survey, with infectious diseases appearing as the number one risk for the region. As new partners to the initiative, we are working to better understand the interconnections between the risk perceptions of business leaders and their broader multistakeholder community. What we already know is that tackling the intersecting risks of pandemic, financial risks, and climate change will be a cornerstone of the desired new normal.”