The state of the economy remains the number one risk keeping global business leaders up at night, according to a new survey from consultants Protiviti and North Carolina State University's Enterprise Risk Management (ERM) Initiative. The survey measures the most pressing business risks over the next two-to-three years, as well as a decade later. Economic uncertainty and volatility are expected to persist as leaders grapple with inflation, tariffs, geopolitical upheaval, growth in AI and other emerging technologies, and upcoming policy changes from new administrations globally.
The 13th annual survey, " Executive Perspectives on Top Near- and Long-Term Risks," polled 1,215 board members and C-suite executives around the world about their views on 32 macroeconomic, strategic and operational risks facing their companies over the near-term (two to three years ahead) and the long-term (a decade ahead). According to the survey, the the top 10 global risks in the near-term are seen as:
- Economic conditions, including inflationary pressures
- Cyber threats
- Ability to attract, develop and retain top talent, manage shifts in labor expectations and address succession challenges
- Talent and labor availability
- Increases in labor costs
- Heightened regulatory change, uncertainty and scrutiny
- Third-party risks
- Rapid speed of disruptive innovations enabled by new and emerging technologies and/or other market forces
- Adoption of AI and other emerging technologies requiring new skills in short supply
- Emergence of new risks from implementing artificial intelligence
A notable change in the results is that board members and executives generally feel more positive about their organizations' resilience, agility and preparedness to deal with crises or changes in the market. Resistance to change was ranked as the fourth biggest risk for companies in 2023 and has fallen to 17th place for this year's survey, indicating that companies have established more agile business models and frameworks for identifying and responding to the unexpected with an increased level of flexibility in their strategic approaches.
"Despite the volatile economic environment with deglobalization, tariffs and the threat of trade wars, and changing regulation, leaders are feeling more confident that their organizations are battle-tested and better prepared to deal with disruption whether it's anticipated or not," said Matt Moore, Global Leader of Risk & Compliance at Protiviti. "Global leaders will need to tap into this confidence to adapt to evolving policies and a dynamic business landscape in the U.S. and abroad."
Risks related to talent – whether challenges about attracting and retaining talent or increasing labor costs – occupy three of the top five short-term risks, indicating significant ongoing challenges. It is also clear that the risks AI poses are embedded in several of the other top 10 risks. This is especially true when looking at the talent-related risks. As AI technology evolves to agentic AI and physical AI, this will require widespread reskilling and upskilling, so that workforces are prepared to meet the demands of the future.
Boards and C-suite leaders ranked cyber threats as the second most concerning risk over the next two to three years, outranked only by the economy. Cyber threats also represent the most-cited long-term operational risk for executives, with almost a third (31%) selecting it among their two most concerning operational risk issues for the next decade.
Looking ahead a decade to 2035, the study’s respondents cited economic conditions and talent availability as the biggest macroeconomic risks. The biggest strategic risks for 2035 are regulatory changes and scrutiny and the rapid speed of disruptive technology innovations, while in operational terms, the biggest risks are seen as cyber threats and the ability to attract, develop and retain top talent and address succession planning challenges.
Many of the near-term risks continue to show up in the long-term assessment – the economy, talent and cyber remain center stage. While leaders may be confident about their ability to deal with change, it's clear that the impacts of today's risks are expected to persist into the next decade.
"The best companies will see these risks as inherently interconnected,” said Dr Mark Beasley, director of North Carolina State University's ERM Initiative and co-author of the report. “Too often, companies are looking at risks in silos where one hand isn't consistently talking to the other. To address the future impacts of AI, geopolitical events and regulation, executives will need effective collaboration to strengthen their organization's resilience."