We live in an ever-challenging environment where, in order to meet the challenges we face, it is good to take note of the context in which we operate. Otherwise, it is easy to get lost in the complicated roadmap that involves the growing need to acquire technological competencies, rethink business units to attack an eminently digital market, or take on the components linked to the unstoppable drive of Customer Experience; which are not watertight disciplines, but are interrelated among them to the greater headache of those who have to manage the pulse of a company.
We therefore turn our attention to the recently published World Economic Forum (WEF) report on regional risks to doing business, and look in particular at the European case. The report is based on an exhaustive survey of 12,000 business leaders around the world, who are asked to evaluate and rank what they consider to be the greatest risks to economic development, competitiveness and business generation.
In the WEF report, the full PDF edition of which can be accessed at this link, the reference to Europe comprises the 28 member countries of the European Union and nine other countries: Turkey and most of the Western Balkans. The first focus is on the risk of cyber-attacks, because it is the greatest, although not in a consistent and coherent way throughout the entire "region" studied. In the WEF's opinion, and according to its own data, this contrasts with concerns in other regions such as America and Asia, where it is clearly the main risk. This is a relevant fact if we take into account business disciplines such as competitive intelligence: positioning itself as a leader in a field that is a matter of global study and concern (cybersecurity) may be a business vector to be explored while others are focused on problems that may be part of the past.
"Across the region, cyberattacks emerged as the top risk to doing business, largely as a result of their prominence in many of the region's most advanced economies," the report notes. Twelve economies report this risk as the top risk, but not always where we might imagine it to be. Thus, while Germany and the United Kingdom put them in first place, for France and Italy, domestic economic and financial conditions were of greater concern.
It is no coincidence that in the case of the UK and Germany, cybersecurity is the primary concern. Major attacks in 2017, such as the WannaCry ransomware, severely affected the UK's healthcare system and Germany's railway system. The harder the blow, the more sensitive the memory seems to be.
However, French respondents cited "unemployment and underemployment" as the number one risk to doing business, and abound in the "long-standing structural problems in the labor market that successive governments have had difficulty dealing with." In Italy, the number one risk has turned out to be the "failure of the financial mechanism or institution". And mind you, they are not the only ones to mention this issue: in total, "failure of the financial mechanism or institution" is ranked as one of the top five risks for businesses in 18 countries in the region, "suggesting significant residual post-crisis nervousness about the health of the country," the report comments in this regard.
"Another sign of post-crisis unease in Europe," he adds in his executive summary, is that the second biggest risk at the European level is "asset bubbles." Something that emerges as a particular concern in Central Europe, ranking first in the Czech Republic, Hungary and the Slovak Republic, and second in 12 other countries across the region, from Ireland to Cyprus. For the WEF, "the underlying driver of this widespread nervousness is likely to be found in the role played in Europe's post-crisis recovery by expansionary monetary policy, especially in the eurozone, where the European Central Bank's decision to start large-scale asset purchases in 2015 marked a turning point for the bloc. The potential concern is that the central bank's bond purchases may have artificially inflated asset values in many classes, raising the possibility of damaging corrections when, over time, monetary policy begins to tighten."
In this regard, the report cites something that we in Spain know well: the housing market. Although the Spanish case is not cited, figures are given that provide an idea of the panorama at European level: compared to the 4.5% annual fall in prices between 2008 and 2015, growth since then is at an average rate of 13.7%, with spectacular rates in countries such as Hungary (39.5%), Latvia (33.1%), Ireland (32.1%) and Portugal (29.5%). %).
The document also qualifies as "surprising" that the "failure of national governance" takes the bronze medal, because it is a risk detected in an environment of "relative level of development of most countries in Europe", it is surprising that the "failure of national governance". It ranks first in four countries (Bosnia and Herzegovina, Croatia, Greece and Lithuania), and second in four others (Malta, Portugal, Serbia and the United Kingdom). "The result in the UK is particularly dramatic," adds this study: "A year ago, respondents rated this risk as their seventh most important concern. Its jump in the ranking now appears to align with widespread reports of the increasing strains that the process of leaving the EU is putting on the UK's political and governmental institutions."
The phenomenon of "political disruption" is not only determined by Brexit, as "many countries in the region are now having to adapt governance patterns to a new electoral environment characterized by increased political fragmentation, polarization and populism". Added to these is the migration issue, which "is likely to remain a source of tension within and between countries in the region in the coming years." Although it is only reflected in the ninth place in the European ranking, it ranks second in Finland, Macedonia and Romania, and third in Austria, Czech Republic, Latvia, Norway, Sweden and Switzerland. Which is no small number of countries.
Where does Europe need to look to be competitive? The World Economic Forum's data serves as a guide to compete beyond day-to-day operations. Be wary of cybersecurity, be wary of our assets and be wary of regulatory compliance: they may be brakes, but they are no excuse for being a business of our time. The best way to avoid risk is to know it exists and operate accordingly, through foresight, analysis and the right allocation of resources.
Photo by Héctor Martínez on Unsplash
