A survey by AT Kearney – Adapting to disruption – has highlighted the double-edged nature of technology in business. Cybersecurity is the top operational challenge according to a survey of global c-suite executives, while a positive technological disruption in their sector is also seen as one of the top external environment opportunities. The survey also found that the executives are focused on political risk and global executives anticipate that populist politicians will gain more ground in countries around the world this year and that Brexit will continue to heighten tensions within Europe. However, they also expect geopolitical tensions between great powers to decrease over the next 12 months but say that the unstable geopolitical environment is the top external challenge. Deteriorating regulatory and tax policies are also a secondary external challenge. Businesses are also reacting to aspects of globalisation, which is at risk from rising populism and protectionism. They majority of executives surveyed said that business strategies based on globalisation are still viable but that they are shifting their supply chains and international footprints. Almost all the executives said they are using strategic foresight tools, particularly scenario planning, to assess future risks.
Likelihood of 10 potential global developments
These are some of the key insights from the study:
- 85 per cent of executives believe that cyberattacks will become more frequent and costly;
- 79 per cent think Brexit will heighten political, economic, and social pressures in the United Kingdom and the rest of the European Union;
- 78 per cent agreed that technological innovation and adoption will spark higher global productivity growth;
- 77 per cent thought it likely that populist leaders and extremist political parties will continue to gain support in democracies around the world;
- 76 per cent said economic and financial volatility will be higher in the next 12 months than in the past 12 months;
- 74 per cent think global trade and other cross-border flows will decline as a result of increased protectionism;
- 68 per cent think India will outpace China as the world's fastest-growing major economy;
- 67 per cent said it's likely that US President Donald Trump’s policies will do more good than harm to the American economy;
- 67 per cent predict that global commodity prices will remain at the current low levels; and
- 66 per cent say geopolitical tensions between the United States, Russia, and China will decrease.
The graph below shows that rising cybersecurity risks are really the number one concern for 43 per cent of the executives surveyed. Furthermore, 38 per cent of executives who see cybersecurity as a top challenge point to weak defence systems.
CTMfile take: This survey has some important messages for those in treasury, including CFOs: one is don't underestimate the risk of a cyberattack and invest in your defence systems (both IT and human). Companies also need to assess the geopolitical situation carefully when considering their global strategies and supply chains.
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