As a new decade draws upon us — and as the next conference convenes in February in San Francisco — a new set of challenges is here. to the 1930s, as some of the developments which did not reach a denouement in A victory for the Democrats could also fuel uncertainty and fierce opposition over a potential wealth tax, more regulations on business, and an overhaul of the health system, perhaps sparking fierce reaction from markets. Top 10 business risks and opportunities – 2020 – Spanish (pdf) Download 2 MB T he fluctuations in the risks, as well as new risks highlight the ongoing disruption in the sector. Extreme weather events (e.g. Risk outlook: the world in 2020. Global business environment slightly less risky in 2020. The top 50% of companies have been growing at twice the GDP growth rate on the average, while the bottom 50% of companies have had near zero average annual growth. Present at the re-creation: A global strategy for revitalizing, adapting, and defending a rules-based international system, Policy on donor acceptance and disclosure. After several years of stable responses, our latest poll shows significant shifts in the risks that are most concerning. With diminishing Chinese and Russian cooperation, ‘maximum pressure’ is of limited utility. Robert A. Manning, Mathew J. Burrows, A South Korean soldier walks past a TV broadcasting a news report on North Korea firing a missile that is believed to be launched from a submarine, in Seoul, South Korea, October 2, 2019. The report is based on a survey of operational risk practitioners across the globe and in-depth interview with respondents. The Top 10 Risks for 2020. The time has come to update our Top Risks 2020, taking into account how the coronavirus has accelerated the trends that worry us most. End of US-ROK alliance, probability 50-50 (strong Department of Defense and Congressional pushback). A Trump victory would set the United States up for four more years of withdrawal from the multilateral world order, while a narrow Trump loss could cause domestic political turmoil. Survey respondents were asked to rate 30 different risks involving macroeconomic, strategic, and operational issues. Fire and explosion incidents may rank as the sixth top peril for businesses in 2020 according to Allianz Risk Barometer respondents but it is actually the number one cause of financial losses based on the results of insurance claims analysis by AGCS. Read the 2020 Global Risks Report (GRR) report to see the bigger picture and learn more about the global risks that can impact your company and to build resilience toward these events. As participants in a highly regulated industry, insurers are always highly concerned with this risk. against company and country. The WEF surveyed 347 risk analysts to uncover the most likely post-pandemic threats—and no area from the economy to the environment is untouched. Risk Radar – Top 20 risks before 2020 3 14 17 8 11 19 5 7 4 9 12 10 15 18 6 13 20 1 2 16 Emerging Established key risk To be considered on a recurring basis Non-standard or exceptional Emerging and exceptional risks, categorized as a current, high priority by stakeholders ... dominating four of the top five risks overall. Those six risks are: The presumption of this risk was that there is or will be a golden opportunity that will take the company to the next level. The 2020 global risks landscape: Top 10 List. Trump calls it a great deal. This is happening at a moment when new risks to crisis stability (secure second strikes) are growing from non-nuclear emerging technologies (AI, offensive cyber, anti-space weapons, and hypersonic missiles). Insurers that offer liability coverage may be worried about court cases that challenge tort caps. This piece also appeared in The National Interest. It focuses on a range of issues, including digitalization, business resilience, organizational change, and geopolitical risks. Several simmering conflicts, symptoms of a Probability of a world financial crisis in 2020: 35-65. : Who Governs the US? following a potential Trump reelection. Opening the gates to cheap US agricultural goods could undermine Tory base support and stir public anger. Still a high concern, but slowly drifting lower. This will lead US allies and partners to rethink US security guarantees. Rigged! Growing global populist and nationalist outbursts are likely Risk outlook: the world in 2020. offer any great surprises or ‘Black Swans,’ but the fragile world order did As luck would have it, this is the only risk in the survey that had the exact same ranking as last year. In 2020, the top risks that are most important for internal audit to provide the board with assurance over are underlaid by four major themes: Increased organizational complexity Heightened stakes for managing and protecting data A quick win on a deal with Washington isn’t likely to compensate for uncertainty over talks with Brussels, as the UK trades more with the EU than elsewhere. These large countries, using their market size to weaponize trade via tariffs, will play a larger role in setting terms of trade. by In the two years since, the post-Cold War order has continued to unravel without a “new normal” emerging. We know how companies can unlock potential through effective risk management. Over the long run, Brexit may lead to the breakup of the United Kingdom, as the Scottish Nationalist Party swept the Tories into dust and more Irish nationalist MPs were elected in Northern Ireland than the Democratic Unionist Party (DUP). Baker McKenzie partnered with Risk.net in its annual ranking of the top operational risks for 2020. A deeper dive into the report, under operational risks, highlights a growing emphasis on “talent and culture,” which made up four of the top 10 risks. Our sophisticated approach to risk helps clients free up capital. Most executives concerned about economic conditions. The drivers of activism are being supercharged. Cybercrime, disruptive technology and pricing/profit are the top three most dangerous risks, according to a new Willis Towers Watson survey of more than 100 insurance industry executives. 2 Represents a new risk added to the 2020 survey. the past year cross the finish line. In the past, it might have sufficed to adopt a somewhat defensive or reactive approach to manage these risks… Our participants focused on a wide range of issues, from business disruption and malicious attacks to data protection and innovation. Washington is seeking to disrupt supply chains linking the United States and China, cutting off investment, scientific exchanges, and tech exports and imports from China. Disruptive technology above). In any case, universal rules and enforcement will be less important in shaping the terms of trade than the size and power of major economies. Follow him on Twitter @Rmanning4. shift from the mere corroding of multilateral institutions and US alliances toward continuing to move beyond just hedging against US uncertainty towards pursuing We have you covered! The retirees leaving do make it harder to keep doing things just the way that they have been forever. Regulatory changes and scrutiny may heighten, noticeably affecting the manner in which our products or services will be produced or delivered 2. Gray Swan: A China reckoning/ world financial crisis: A perfect storm involving a simultaneous slowdown in the three economic centers could catapult the global economy into another deep economic crisis. Cyber incidents. Atlantic Council Strategy Paper Series Probability: 60-40; Demise of US traditional alliances: The global leadership deficit grows in a fragmenting world order. ... Do the board and senior executives expect risk functions to align on top risks, risk prioritization and relative responsibilities? 3 Theft and fraud. Many insurers were afraid that retiring Baby Boomers would take decades and decades of valuable experience with them. global system under strain from US President Donald J. Trump’s “anti-globalist” Of those, the top 10 risks identified are as follows: Video 2020 is a tipping point. The EU, led by France and Germany, are increasingly wary of a UK which tries to undercut the single market by not adhering to the same environmental, labor, and other standards. A UK-EU free trade deal could end up formalizing the Irish Sea as the border between the two trade zones. total dysfunction. Risks typically fall in rankings like this because of high levels of concern and awareness but when they fail to produce any problems or losses, concern fades. Following are the top 10 risks identified in the “Executive Perspectives on Top Risks for 2020” report: We need a new strategy—one that is both ambitious and innovative, geared towards meeting the challenges and opportunities that the new decade brings. 2020 will likely bear more resemblance A similar dynamic threatens the US-Japan alliance, with Tokyo building ties to new economic and security partners. End of denuclearization diplomacy: 65-35; Nuclear stability unravels, The New START and Open Skies agreements follow a Trump pattern of withdrawing from “globalist” treaties. Geopolitical & macroeconomic leads the emerging risks global diplomacy and establishing new institutions without the United States © 2019 Atlantic Council by By 2020 Global Risk Study webcast Register now. In fact, the only change to our Top 5 Risks for 2020 is the order in which we rank them, with the political and economic impacts of the pandemic pushing the risks previously ranked in fourth and fifth place to the fore. Back in January, we flagged that as bad as the tech war between the U.S. and … TABLE OF CONTENTS Methodology Analysis Across Different Sizes of Organizations Analysis Across Geographic Regions Overall Level of Risk Concerns for 2020 Overview of Top 10 Risks Biggest and Smallest Changes in Individual Risks from Prior Year Analysis Across Industry Groups Executive Summary The coronavirus outbreak will weaken Iran, Iraq, and Syria. Twenty-five years of Denuclearization Diplomacy has run its course, exhausting all genuine possible nuclear-free end states. 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