Global executives identify 12 key risks for the next decade

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An increase in protectionism and the emergence of disruptive new business models are among the top risks facing firms over the next decade, according to Risk 2018: Planning for an unpredictable decade, a newly-released Economist Intelligence Unit survey and report, sponsored by BT. The report is based on a survey by the Economist Intelligence Unit of more than 600 board-level executives, in which respondents were questioned about their perception of the likelihood and severity of 46 risks, and asked how prepared they believed their organisations would be to face them. Responses were aggregated and mapped onto a grid (see below), with the importance of each risk (a combination of its severity and likelihood) represented on one axis and levels of preparedness among companies on the other. The survey highlighted 12 risks as ”tier one” in nature. They are of particular concern because they combined high levels of severity and likelihood with relatively low levels of preparedness. The risks identified as “tier two” were classed as such owing to either the low perceived severity and impact of the risk, or because of very high levels of preparedness. The 12 “tier one” risks are:

• Retrenchment of globalisation/increase in protectionism
• Oil price shock
• Asset price collapse
• Emergence of disruptive business model
• International terrorism
• Unexpected regulatory change
• Global recession
• Instability in the Middle East
• Increased competition from emerging market companies
• Talent shortages
• Climate change
• Increased industrial pollution

Given these threats, the report goes on to examine the various ways in which companies can manage potential risks and plan for the future.

"Faced with a highly uncertain business environment, executives are seeking guidance on how major trends and risks might affect their business over the next decade," says Rob Mitchell, editor of the report. "By comparing perceived levels of severity and likelihood with levels of preparedness for a diverse set of risks, our survey illustrates a number of areas where risk managers and executives might need to sharpen their focus over the next ten years."

François Barrault, chief executive of BT Global Services said: “This report highlights the sheer breadth of risks that are now primary boardroom concerns. Globalisation is driving risk management to become an issue of strategic importance. Companies that integrate their risk planning and infrastructures will be more resilient and will reap the rewards in this more complex trading environment.”

Other key findings of the report include:

Climate change is not seen as a particularly severe risk, or one that is likely to cause an impact over the next ten years. Despite widespread media and governmental attention on climate change, respondents do not expect environmental risks to be particularly severe over the coming decade. However, the fact that the majority of respondents exhibited a low level of preparation towards climate change means that it has been classified as a "tier one" risk.

Emerging markets are seen as both a threat and an opportunity. Respondents expect increased competition from emerging markets to be a major worry over the coming decade, but they also see many of these countries as a key source of growth. The majority of those surveyed named China as the country where they expect to see the biggest increase in revenue contribution, followed by Europe (including Eastern Europe) and Asia-Pacific (excluding India and China).

Scenario planning is a widely used tool to consider future risks. As companies look to an uncertain and unpredictable future, more and more are using techniques such as scenario planning to help them map out the road ahead. Among our survey respondents, 26% say that they use scenario planning on a regular basis and 41% say that they use it on an ad hoc basis. Out of the remainder, 29% say that they have plans to use the technique in the future.

Risk management will become a more strategic activity. The trend for risk management to be considered a strategic activity is expected to continue into the next decade, with two-thirds of respondents saying this area will become more important as a strategic tool, and 58% expecting it to command more attention from the boardroom.

Risk 2018: Planning for an unpredictable decade
is available free to download: click here

the future of Money

Thursday, April 24, 2008
Registration: 18:30-19:00, Conference: 19:00-21:15
Tickets
Where: Museum de Burcht van Berlage, Henri Polaklaan 9, 1018 CP Amsterdam [near Artis Zoo]

The speakers and topics are
Annegien Blokpoel, founder and managing director, PerspeXo
Sharing or commoditisation, trends in finance

Justien Marseille, Futurist, Trend Analyst, The Future Institute
Will attention be the next currency?

Ilja Linnemeijer, Senior Manager, PricewaterhouseCoopers
Virtual economies present real challenges

Moderated by Bob Stumpel, Result Strategy, Cellspace, Xing, Ideabroker, LBI, GetMobile, TCS, Mendix, FON


LIVE WEBCAST at www.webcastingstudio.eu
We would like to thank our supporters Info.nl and Innergy Creations

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April 9: The Fall of the US Empire
March 21: Ecological Architecture - some thoughts
March 15: The Economic Storm

Water-Powered Cell Phones

Samsung Electro-Mechanics has developed a micro-fuel cell and hydrogen generator that runs on water, writes the Chosun Ilbo.

Oh Yong-soo, vice president of Samsung Electro-Mechanics' research centre, who said that when the handset is turned on, metal and water in the phone react to produce hydrogen gas.

The gas is then supplied to the fuel cell where it reacts with oxygen in the air to generate power.

Other fuel cells need methanol to produce hydrogen, while Samsung's needs only water.

Eco City Masdar

UAE's most futuristic planning is its creation of a whole new city from scratch, centered on an institute of technology modeled after, and created in collaboration with, MIT. The new city, Masdar, is perhaps the most ambitious attempt in the world today to create a community with a total net energy use of zero - without sacrificing any of the amenities of modern technology. Carbon emissions and waste output are also intended to be kept at or near zero.

The city, designed to house 50,000 people with the Masdar Institute of Science and Technology at its center, will be completely car-free, with walkways and personal transportation systems instead of roads and parking garages. Some of the walkways will be topped with solar panels, which will offer shade from the blistering tropical sun while also providing electricity for the city.

International Assessment of Agricultural Knowledge, Science and Technology for Development

"Agriculture is not just about putting things in the ground and then harvesting them…it is increasingly about the social and environmental variables that will in large part determine the future capacity of agriculture to provide for eight or nine billion people in a manner that is sustainable" - Achim Steiner, Executive Director, UNEP

The way the world grows its food will have to change radically to better serve the poor and hungry if the world is to cope with a growing population and climate change while avoiding social breakdown and environmental collapse. That is the message from the report of the International Assessment of Agricultural Science and Technology for Development, a major new report by over 400 scientists.

The assessment was considered by 64 governments at an intergovernmental plenary in Johannesburg last week.

The authors' brief was to examine hunger, poverty, the environment and equity together. Professor Robert Watson Director of IAASTD said those on the margins are ill-served by the present system: "The incentives for science to address the issues that matter to the poor are weak... the poorest developing countries are net losers under most trade liberalization scenarios."

Modern agriculture has brought significant increases in food production. But the benefits have been spread unevenly and have come at an increasingly intolerable price, paid by small-scale farmers, workers, rural communities and the environment.

It says the willingness of many people to tackle the basics of combining production, social and environmental goals is marred by "contentious political and economic stances". One of the IAASTD co-chairs, Dr Hans Herren, explains: "Specifically, this refers to the many OECD member countries who are deeply opposed to any changes in trade regimes or subsidy systems. Without reforms here many poorer countries will have a very hard time... "

The report has assessed that the way to meet the challenges lies in putting in place institutional, economic and legal frameworks that combine productivity with the protection and conservation of natural resources like soils, water, forests, and biodiversity while meeting production needs.

In many countries, it says, food is taken for granted, and farmers and farm workers are in many cases poorly rewarded for acting as stewards of almost a third of the Earth's land. Investment directed toward securing the public interest in agricultural science, education and training and extension to farmers has decreased at a time when it is most needed.

The authors have assessed evidence across a wide range of knowledge that is rarely brought together. They conclude we have little time to lose if we are to change course. Continuing with current trends would exhaust our resources and put our children's future in jeopardy.

Professor Bob Watson, Director of IAASTD said: "To argue, as we do, that continuing to focus on production alone will undermine our agricultural capital and leave us with an increasingly degraded and divided planet is to reiterate an old message. But it is a message that has not always had resonance in some parts of the world. If those with power are now willing to hear it, then we may hope for more equitable policies that do take the interests of the poor into account."

Professor Judi Wakhungu, said "We must cooperate now, because no single institution, no single nation, no single region, can tackle this issue alone. The time is now."

Conventional economics is often criticized for failing to reflect adequately the value of clean air and water, species diversity, and social and generational equity. By excluding biophysical and social systems from their analyses, many conventional economists overlook problems of the increasing scale of human impacts and the inequitable distribution of resources.

Ecological Economics is an introductory-level textbook for an emerging paradigm that addresses this flaw in much economic thought. The book defines a revolutionary "transdiscipline" that incorporates insights from the biological, physical, and social sciences, and it offers a pedagogically complete examination of this exciting new field. The book provides students with a foundation in traditional neoclassical economic thought, but places that foundation within a new interdisciplinary framework that embraces the linkages among economic growth, environmental degradation, and social inequity.

Project OR is a vortex-shaped surface which reacts to sunlight.

The polygonal segments of the surface react to ultra-violet light, mapping the position and intensity of solar rays. When in the shade, the segments of OR are translucent white. However, when hit by sunlight they become coloured, flooding the space below with different hues of light. At night, OR transforms into an enormous 'chandelier', disseminating light into the surrounding courtyard, an atmospheric space for events and gatherings.

The hues generated by the photoreactive surface are therefore indicators of changes in weather and daylight, a dynamic architectural tool that can be used on building exteriors. OR is skin, OR is shining, OR is the light OR the shade.

OR is the first time that photoreactive technology has been used on an architectural scale. The ecological structure is a step in exploring the possibilities of photoreactive materials in the fields of furniture and design. The beauty of OR is its constant interaction with the elements. Each moment of the day is unique.

The project was developed by the architects and designers Ran Ankori, Francesco Brenta, Maya Carni, Christoph Klemmt, Laura Micalizzi and Elisa Oddone.

Info.nl
The full service internet agency Info.nl creates successful and effective websites and online applications. The work of Info.nl is based on the business objectives of our clients, customer expectations and the use of ICT technology. To enable to serve our clients in our different fields of expertise, Info.nl is divided in three areas of expertise with their own specific competence and focus. Our strategy consultants develop online strategies and concepts, while the unit web development realizes and implements online applications. The dedicated unit hosting facilities maintains (24/7) web environments.

Since 1994, Info.nl has a proven track record. Respected clients as e.g. Robeco, SNS Bank, VolkskrantBanen, ReedBusiness, T-Mobile and Routenet are organizations which benefit from the experience of Info.nl.
www.info.nl

Peter Schwartz is cofounder and chairman of Global Business Network, a Monitor Group company, and a partner of the Monitor Group, a family of professional services firms devoted to enhancing client competitiveness. An internationally renowned futurist and business strategist, Peter specializes in scenario planning, working with corporations, governments, and institutions to create alternative perspectives of the future and develop robust strategies for a changing and uncertain world. His current research and scenario work encompasses energy resources and the environment, technology, telecommunications, media and entertainment, aerospace, and national security. Peter is also a venture partner of San Francisco-based Alta Partners, a member of the Council on Foreign Relations, and a member of the board of trustees of the Santa Fe Institute, the Long Now Foundation, and the World Affairs Council.

From 1982 to 1986, Peter headed scenario planning for the Royal Dutch/Shell Group of Companies in London. His team conducted comprehensive analyses of the global business and political environment and worked with senior management to create successful strategies. Before joining Royal Dutch/Shell, Peter directed the Strategic Environment Center at SRI International. The Center researched the business milieu, lifestyles, and consumer values, and conducted scenario planning for corporate and government clients.

Peter is the author of Inevitable Surprises (Gotham, 2003), a provocative look at the dynamic forces at play in the world today and their implications for business and society. His first book, The Art of the Long View (Doubleday Currency, 1991; audio tape, 1995; paperback, 1996), is considered a seminal publication on scenario planning and has been translated into multiple languages. He is also the co-author of The Long Boom (Perseus, 1999), a vision for the world characterized by global openness, prosperity, and discovery; When Good Companies Do Bad Things (Wiley, 1999), an examination of, and argument for, corporate social responsibility; and China's Futures (Jossey-Bass, 2001), which describes very different scenarios for China and their international implications. He publishes and lectures widely and served as a script consultant on the films "The Minority Report," "Deep Impact," "Sneakers," and "War Games." Peter received a B.S. in aeronautical engineering and astronautics from Rensselaer Polytechnic Institute.

Peter Schwartz - The Threat of "Abrupt Climate Change"

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