Economic risks take centre stage in Asia
According to the WEF Global Risks Report 2024, the top-of-mind concerns among Asia’s executives are economic in nature: Seven out of 11 markets in the region consider economic downturn as the top risk, followed by concerns about talent shortage and inflation.
Although more than 60% of the top five risks of concern among Asia’s executives comprise of economic risks, the global aggregate paints a different picture, with misinformation and disinformation as the top risk followed by extreme weather events, societal polarisation, cyber insecurity, and interstate armed conflict.
- In particular, only Philippines, Indonesia, and Japan list extreme weather events among their top 5 risks of concern, even as typhoons, floods, and droughts have increased in frequency and severity due to climate change and resulted in rising losses from direct damage and supply chain disruptions across the region.
- Only Japan, Taiwan (ROC), Hong Kong SAR, Singapore, and Korea list geopolitical risks among their top five risks, but recent events have shown that geopolitical tension can impact businesses’ supply chain and talent mobility, as well as heighten regulatory risks for global trade and cyber risks.
- For societal risks, only Korea lists wealth and income inequality as a top five risk despite widespread concern of an impending economic downturn across Asia markets.
What does this mean for Asia’s businesses — especially multinationals — and how can they respond effectively and prioritise the right actions to take?
As competing priorities wrestle for attention, businesses need to understand how risks can cause ripple effects across the globe, as an extreme weather event can be exacerbated by geoeconomic and societal risks.