The business risk companies are now facing has increased greatly due to global interconnectivity and its associated danger. These risks are quick to evolve and there is little a company can do besides being prepared, which hopefully allows it to bounce back and emerge even stronger.
There currently are two events occurring in the world that are having a tremendous effect on global risk. One is the Greek debt crisis and its threat to Europe's political stability. The second is the historic agreement that has opened Iran up for global commerce after reaching an agreement with multiple countries on curbing its nuclear capabilities. Both of these events are escalating the interaction between geopolitics and economics leading to heightened risk. As mentioned in the Global Risks 2015 report, the geopolitical and economic risk along with the risk of a water crisis, rapid and unplanned urbanization in developing countries, and cyber risks are just some of the threats facing the global market in 2015.
Companies involved in the global marketplace, whether by trade or investment, need to take precautions as there are endless scenarios of geopolitical risk and the effects do not normally unfold neatly. Since there are so many situations of how risk could affect a business, the most effective mitigation strategy is to amplify the capability of businesses to bounce back from any type of risk occurrence. The hope is that this kind of preparedness will allow businesses to return faster and stronger, and even with a step-up over the competition. The key to this is having businesses take a strategic approach that focuses on increasing its flexible capability. Companies that build resilience into their business model will be better equipped to react and carry on business as quickly as possible when risks emerge.