What are the biggest risks to business in 2020?
Global recession, wealth inequality, trade tariffs between China and the US, Brexit, global warming and volatile housing markets are just a few of the challenges we'll face in 2020.
The UN has warned of the possibility of a global recession in 2020, driven by weaker growth in both advanced and developing countries.
A report by the UN Conference on Trade and Development (the UNCTAD report) says the global economy has remained fragile after the global financial crisis, and called for a rethink of “business as usual”. The World Economic Forum’s Global Risks Initiative also provides detailed analysis of risks to global and regional markets.
For Deutsche Bank chief economist Torsten Slok, the “continued increase in wealth inequality” tops the list of risks for 2020.
Also impacting businesses are the ongoing trade tensions between the US and China, described as some reporters as ‘the new Cold war’. Australia, as with many countries, stands in an awkward position given our close and significant trade and investment relationships with both China and the US.
While the US and China work to finalise a limited agreement, ongoing tariffs imposed by both sides have impacted international markets, and Deutsche Bank noted this ongoing uncertainty would continue to affect corporate spending in 2020.
Other risks to global markets include ongoing slow growth in major markets such as China, Japan, and Europe, US election uncertainty, Brexit, a shrinking global auto industry and the house price volatility in Australia, Canada and Sweden.
Forecasts of increasing economic insecurity are compounded by what many see as the global climate emergency. As the majority of the world’s scientists continue to issue warnings, governments and businesses around the world are increasingly aware of the present and future threats posed by worsening extreme weather and ecological breakdown.
The UN has stressed the need to face climate threats head on.
“Climate protection requires a massive new wave of investment, reinventing energy and other carbon-emitting sectors. New low-carbon technologies must be created, installed and maintained on a global scale,” the UNCTAD report says.
Green investment has been flagged as an importance source of income and new jobs in 2020 and beyond.
How does Australia stack up? What does it say about us as a workforce?
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