Fiscal crises top global business concerns, followed by cyberattacks and unemployment, according to a recent report by the World Economic Forum.
The study said that the world economy had been seen flatter since the financial crisis of 2008–2009, but over the past year symptoms of a fragile economy had become more evident. For example, in the second quarter of 2019 growth in the world’s seven largest economies, which account for 60 per cent of global production, slowed compared to the same quarter of 2018. Total debt levels had also increased substantially to a record-high 225 per cent of global GDP, the study found.
“The signals of a global economic recession in the short term are strong, and the impact that such a shock would have on current government policies is worrying the global business community,” the report noted. “It is also a major cause for concern that stakeholders worldwide might not be able to come together, if coordination has not begun already, to craft a global response to such a risk.”
While the report says that global cooperation is the most effective tool to address systemic challenges, action at a regional level can also provide an important tool. “Mapping the risks landscape from a regional perspective is fundamental for stakeholders to hedge against the probability of lack of global cohesion,” it said.
Despite these concerns, chief executive officers in Europe and North America, and in six of the 10 largest economies: the United States, Germany, the United Kingdom, France, Italy and Canada, said that cyberattacks were the most pressing risk, the report said.
“These regions have been the subject of multiple and notable incidents over the past year,” WEF said. For instance, hackers used the so-called LockerGoga ransomware to attack prominent industrial and manufacturing companies in France, Norway and the United States in 2019. The European Central Bank was also forced to shut down an external website after it detected a possible compromise of personal data.
Global unemployment is currently at its lowest level in 10 years – sitting at just below 5% in 2018. But the report said that “a global recession at a time of narrow fiscal margins and rapid technological change would make it much more difficult for both business and governments to continue to create new and well-paid job opportunities.”
A potential consequence of such a scenario, “unemployment or underemployment”, ranked first by the greatest number of economies (30 out of 133) and third globally this year. It was also the top risk in sub-Saharan Africa, the world’s youngest region, the report concluded.
Top ten business risks of highest concern globally