With 2020 just around the corner, it seems businesses will need to brace themselves for major geopolitical change.
“Businesses once again see themselves being caught in the crosshairs of geopolitics. With other risk factors coming into the mix, businesses that stay vigilant and are well-prepared for a multitude of scenarios will be those that can ride out any potential storms,” Control Risks Senior Partner Global Risk Analysis Steve Wilford said, at the official release of the Risk Map 2020.
Mapping out your business’ operational risk from all angles, including potential political, economic and security exposure, as well as understanding where vulnerabilities may lie, will be the fundamental basis of success or failure in these unpredictable times.
Yet, while there have been major revelations and much regulatory change domestically, there has also been significant impact on the international stage to impact businesses with international interests.
Control Risks’ recently published Risk Map 2020 highlights the US election year, global activism and cyber warfare as some of the major risks that look set to impact businesses on a global level in 2020.
“Global trends are now more set against the interests of international businesses than they have been for many years. Populism, activism, protectionism, sanctions and political disruption remain the canvas onto which business tries to build global markets and supply chains. It has not been easy in 2019 and it’s going to get harder in 2020,” believes Control Risks CEO, Nick Allan.
Elections and impeachment
The US campaign trail is one area highlighted, as it now includes the ‘disruption of impeachment’ that will have geopolitical implications. Also of note is the US-China saga and its implications for and in Asia.
“Asian economies, generally heavily dependent on both the US and China, have to balance this tense and delicate situation, which means longer term uncertainties for businesses.”
But what does this mean for Australia and for Australian businesses?
Well, the Map does suggest that Australia will continue to struggle with reconciling its own relationship with China.
According to the Risk Map 2020:
ASEAN, both needy and wary of China, will at once fight its rear-guard action to preserve US multilateralism in the region, while at the same time exploit the deflected commercial opportunities presented by the US-China feud, and get the best of Chinese investment. Vietnam and Indonesia are case-in-point.
When it come to the risk of global activism, the Map breaks it down into environmental protection, political and human rights, inequality and privacy. The, map also highlights the Hong Kong protests that recently celebrated their six-month anniversary, with a turnout of 800,000 people.
It warns, “The unwary [businesses] will be harassed by regulators, egged on by mass movements and social pressures. Watch out for politicians in the region trying to make a name for themselves by taking international best practice in some sectors and warping it to their own advantage.”
In the Risk Map 2019, there was focus on the differing priorities of data regulation that had some ideological and regional factors; however, the 2020 Map feels more like a throw-back to the 2018 Map’s prediction of major cyberattacks, such as WannaCry, NotPetya, and BadRabbit in 2017.
At the time, Partner and Australia Pacific General Manager Cory Davie said, at the Map’s release in 2018, “Much of the attention in 2018 will be on the implementation of the new Australian Privacy Amendment Bill, which covers mandatory disclosure data breaches; however, companies will do well to remember this is focused on a symptom and not the threat itself. They need to continue to concentrate on a realistic cyber strategy that takes into account company culture and employee behaviour, not just their disclosure obligations. Companies need to ensure they have implemented a coordinated cyber security programme across their organisation and that they are constantly reviewing this, because the chance of having your business targeted or impacted is increasing daily”.
The Privacy Amendments are now in force and companies still need to implement their coordinated cyber security strategies.
According to Risk Map 2020, “Western deterrence has failed to stem the tide and hostile actors are using ever-harder methods. If leading companies are attaining credible cyber resilience, national infrastructures across the globe are not and present the main vulnerability in the international cyber conflict.”
The Risk Map warns of global fragmentation being caused by anxiety around global economies, highlighting that “…a fragmented world cannot craft a coordinated policy response.”
From the organisational perspective, the question also remains as to what impact a fragmented policy approach might have on organisations.
For the long term
Risk Map 2020 turns its focus on the potential problems inherent with political leaders who have demonstrated that they have not been able to see beyond the next crisis, warning businesses to form strategies to help them deal with this issue.