Economic downturn is now seen as a bigger threat to business than ransomware
Companies are advised to conduct regular risk assessments and embrace the economic threat as an opportunity for growth
Leading business leaders have become more fearful of an impending macroeconomic downturn in 2022, more so than ransomware attacks or the fallout from Russia’s invasion of Ukraine.
Data released this week by Gartner for the second quarter of 2022 shows that ransomware has slipped into the third most feared emerging risk for businesses, overtaken by economic uncertainty after taking the top spot in the first quarter.
The potential economic downturn jumped from fifth to first place between Q1 and Q2 of 2022, Gartner’s Emerging Risk Reports found.
The top five emerging risks for businesses – Q2 2022:
Macroeconomic downturn Escalation of conflict in Europe State sponsored cyber attacks Energy price inflation Key material shortages
“The top five risks reported by respondents were notable, both for their interconnectedness and their origin outside the organization,” said Chris Matlock, vice president of Gartner’s legal, risk and compliance practice.
“While they are interconnected, many of the top risks send conflicting signals about the state of the economy, making the role of emerging risk management (ERM) leaders especially critical in filtering the most relevant, organization-specific information into to the c-suite and board.”
Gartner said it was “striking” that all of the top five risks were external factors — beyond a company’s direct control — and that the impact of each would be felt differently depending on the industry and the company’s location.
The main risk, the macroeconomic downturn, was described by Gartner as a major impact factor for companies, the full effects of which are expected to be felt in the next two years.
A shortage of key materials will also be a major impact factor hitting businesses within a year, it said. Many tech companies are already reeling from supply chain problems, especially the shortage of semiconductors.
State-sponsored cyberattacks are also considered to have major impacts on businesses, with Gartner forecasting the greatest impacts of the threat to be felt within one to two years in the future.
The most feared risks likely affect long-term business decisions, the analysts said. There is no clear date on which the conflict in Ukraine will end, nor is there a date for the corresponding sanctions being imposed on Russia by global nations.
Companies are advised to constantly reassess their macroeconomic outlook and regularly conduct both top-down and bottom-down risk assessments, weighing the findings of each.
They are also advised to embrace the risks to their industry and use it as an opportunity to gain insight, ultimately helping a company stay ahead of the competition.
© Dennis Publishing