Kreston Global Chief Executive, Liza Robbins, was recently invited to comment on global business risks with Raconteur, a specialist business publication. Liza shared her thoughts on the focus of the article, a report by the World Economic Forum. Read the full article on the Raconteur website, or read the summary below.
The onset of a ‘low-cooperation era’
The report by the WEF highlights a “low-growth, low-investment and low-cooperation era”, global businesses face a cascade of challenges with potentially profound impacts. These derive from escalating climate change, resource scarcity, increased risk of conflict, and reduced effectiveness of international cooperation mechanisms.
Global business risk and policy
Protectionist policies and the rise of nationalist economic strategies are becoming increasingly commonplace, further complicating global business endeavours. These measures have been triggered by perceived inequalities attributed to Western-led globalisation. Economic superpowers such as China and Russia, among others, are recasting their economic policies in favour of self-sufficiency, resulting in a significant impact on international businesses’ investments, supply chains, goods prices, and cross-border operations.
The compliance burden on global businesses
Liza Robbins, Chief Executive of Kreston Global, underlines how this growing absence of global cooperation amplifies the compliance burden for international businesses. There is a notable increase in conflicting country-by-country regulations, which disrupt the smooth flow of resources businesses depend on.
As Liza explains, the regional variations in digital infrastructure, data privacy and data protection laws pose unique challenges. These discrepancies create hurdles for multinational businesses, particularly in sectors such as accounting, by restricting the free flow of information. Moreover, increased barriers to talent migration, post-Brexit being a prime example, could lead to nationalised or monocultural workforces, making global collaboration within businesses a daunting task.
Interpreneur report reveals international expansion challenges
A recent Kreston Global survey further underscores these challenges. The Interpreneur report, released in 2022, engaged 600 business leaders globally, interrogating the motivations behind the global expansion and exploring some of the barriers. Of the 600 international business leaders surveyed, 56% have refrained from expanding their businesses abroad, with 32% attributing their decision to international supply chain issues.
Geopolitical tensions and supply chain challenges
A prominent example of such disruption is the turmoil in the global semiconductor market due to rising tensions between China, Taiwan, and the US. The current situation underlines the urgent need for Western countries to invest in developing local supply chains, despite the considerable time and financial resources such endeavours demand.
Advice to global business leaders
To navigate this low-cooperation era, business leaders will need to explore supply chain diversification and increase geopolitical expertise at board level to improve crisis preparedness. However, resilience, adaptability and the ability to pivot rapidly in response to international crises will be the decisive factors in the survival and success of global businesses in this challenging landscape. This newfound era of global business will require businesses to demonstrate remarkable resilience, operating wherever they can, and capitalising on new opportunities when existing ones cease.
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