The five biggest risks to your business in 2016

The World Economic Forum's soothsayers have gone green this year, but business leaders have more immediate concerns.

by Adam Gale
Last Updated: 03 Mar 2016

The biggest risk to the world this year is climate change, according to an annual survey of economists and business leaders by the World Economic Forum ahead of its Davos summit next week. Mass forced migration comes a close second, followed by water crises and interstate conflict.

Note the lack of financial and economic disasters at the top of the list. For years, asset price collapses, severe financial system failure and fiscal crises were what worried the great and the good. That isn’t to say of course that these concerns are much less pressing now - it could simply be because perceptions of humanitarian risks have increased. As the WEF put it rather grimly, ‘data from the report appears to support the increased likelihood of risks across the board’.

None of this is very cheery, so MT decided to turn it into a fun list to take the edge off. These are the business risks identified by the private sector respondents to the WEF’s survey (spoiler alert: global warming doesn’t register).  

Energy price shocks

Whether the oil price collapse is a good thing or a bad thing really depends who you ask. A haulage firm would probably be quite bullish about the Saudis’ refusal to stop pumping crude; Shell’s chief exec Ben van Beurden probably less so. What certainly isn’t good for anyone other than traders is increased volatility – and unfortunately this seems to be exactly the way things are going. OPEC forcing American frackers to close their rigs may well hike the oil price, only to re-incentivise the yanks to open them again, starting the cycle again.


Long term structural unemployment is particularly worrisome in Europe. Indeed, according to the WEF, ‘unemployment threatens to de-skill an entire generation in parts of Europe, further aggravating businesses’ search for employees with the right type of skills to compete in today’s fast-paced global economy.’

Cyber attacks

The cost of cyber attacks to global business last year has been estimated at $445bn (£306bn), and cybersecurity continues to be the most pressing concern for American firms in particular. Though there are things you can do to protect yourself, the growing dependence of businesses on tech means the stakes – and therefore the frequency of attacks – are only likely to get higher.

Asset bubbles

The IMF estimates corporate over-borrowing to be in the region of $3tn. As anyone who lived through '08 knows, if overinflated asset prices go pop, it could plunge large parts of the world into recession. Which assets are actually overinflated remains a matter of opinion of course, though anyone looking for a place to live in the capital might suggest you start with London property, which may be becoming less palatable to international investors.

Fiscal crises

George Osborne isn’t the only one worried about the deficit, it seems. Much of the developed world is laden with vast levels of debt as a legacy of the crisis and recession. Another such downturn could be exacerbated tremendously if states are unable to service their debt. As Argentina will tell you, defaults do not go down well on the international money markets.  


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