globalEDGE Blog - By Tag: business-risk

The Israel-Hamas conflict is one of the world’s longest-running conflicts, and its impact extends far beyond the region’s borders. The conflict significantly disrupts trade, supply chains, and investment, often leading to volatility in international markets. Recently, the situation has escalated, with both sides launching airstrikes and rocket attacks, causing widespread death, destruction, and displacement of thousands of people.

The Risk Comparator tab within each Economic Classification page on globalEDGE has been updated to reflect the most recently available 2021 data.  With the onset of the pandemic starting after the source, The Economist, provided its ratings last year, this year's ratings will show the impact that COVID-19 has had on countries and on the different classifications of markets in terms of their country, political, currency, sovereign, banking sector, and economic structure risk.  Explore the individual links below to gain a better understanding of market trends and to see how exactly specific countries have faired in managing risk during the course of the past year.

After a sixteen-month investigation, the International Consortium of Investigative Journalists (ICIJ) has announced that major banks throughout the world have taken part in allowing dirty and illegal money to pass through their institutions. The ICIJ’s investigation has concluded Bank of New York Mellon, Deutsche Bank, HSBC, JPMorgan, and Standard Chartered Bank as the five main financial institutions responsible for authorizing the moving of crime-financing funds.

2020 has been an extremely volatile year. The year started with stock markets hitting all-time highs before the Coronavirus pandemic closed down much of the world’s economy, negatively hitting many industries. The insurance industry, despite taking on large amounts of risk when writing policies, is considered to be pretty safe and stable. How has it held up to the pressure applied this year?

The globalEDGE team has updated the risk assessments for each country within the website's Economic Classification section to reflect the most recent data available.  Here, users can explore countries by their classification in either the emerging market, frontier market, or mature market.  Within each of these markets, the risk comparator tab allows for the comparability of countries based on six risk factors: country, political, currency, sovereign, the banking sector, and the economic sector.  Make sure to check out this new update for a better understanding of market risk around the globe through the links below.

Over the past decade, undetected corruption has lead to instability throughout markets around the globe. In 2012, many banks began to struggle as a result of the London Interbank Offered Rate. More commonly referred to as LIBOR, this interest rate serves a much larger purpose than any other before it. The rate acts as a benchmark for almost all other interest rates to be based on throughout the world. However, due to the rate fluctuating for unknown reasons throughout past financial crises, suspicions emerged questioning its reliability. These speculations ended up leading to an investigation of a global market manipulation scandal that came to light in 2012.

As of November 19, 2018, the United States Government has $21.73 Trillion dollars in national debt. In the past, that hasn’t been so concerning because strong demand for US debt kept the interest rates low. Collectively, Americans have been increasingly concerned and aware of the rising debt and the implications that come with it.

globalEDGE is proud to be a sponsor of Coface's annual Country Risk Conference. The conference will be held on April 20th in New York City, and will focus on business to business trade around the world. Topics covered will include Brexit, how the United States' new trade policies will impact international trade, low oil prices, and the emerging markets in Central and Eastern Europe. Business professionals, consultants, and researchers are welcome to attend the event, and registration is available on Coface's site. To learn more about the conference, click here, and to learn more about country risk, visit our recently updated country risk pages.

Present-day society has become extremely technologically advanced, and economic sectors with on-demand technologies are continuing to evolve at a rapid pace. Specifically, on-demand refers to services with digital platforms that give you instant access to the services they provide. While these technological advances are often seen as beneficial and representative of how far we may advance in the 21st century, many businesses have been negatively affected by unforeseen issues.

Hacking is defined as using a computer to gain unauthorized access to data or information in a system. Often times the information is used for the financial gain of the hacker. Hackers have come to be a major drain on the global economy. It is estimated that for all of 2016 they will cost the global economy $445 billion. Data hackers have stolen information from many Fortune 500 companies, with one member of a major cyber security firm stating the all 500 Fortune 500 companies have been hacked. Small business are not safe from hackers either. Home Depot and Target are both international corporations that have had their information compromised after small third party company contractors were hacked, allowing the hackers access to the bigger companies' databases.

The economic impact of natural disasters can be witnessed on a global scale. These disasters often set in motion a variety of chain reactions, negatively impacting and in some cases decimating sectors of the global economy. "In 2014, 72 percent of global losses classified as "disasters" were caused by extreme weather events: hailstorms in Europe, drought and severe winter weather in the U.S., hurricane damage in Mexico to typhoon damage in the Philippines, and disastrous flooding in the U.K., India, Pakistan, and Afghanistan." 

These are some of the most infamous natural disasters with respect to their economic repercussions:

Just four years ago, the Mongolian economy grew by 17% and attracted billions of dollars in foreign investment, according to World Bank data. Today, there is a mounting debt crisis and the risk of a possible default from the Mongolian government, with GDP only growing about 1.3% for the first half of the year. Currency has also plummeted nearly 10% against the dollar in the past month alone, and concern continues to grow as more investors pull their funding from the country.

There are many reasons that entrepreneurs choose to move their businesses across the world. Whether it be cost savings, favorable market conditions, geographic advantage, risk diversification, or competiveness, doing business in locations across the globe can prove to be extremely beneficial. Ultimately, this decision depends greatly on the specific needs of a business, which can sometimes be volatile. Here are five locations that are currently favorable for those looking to move their business abroad. 

Coface is holding its annual Country Risk Conference Wednesday, May 4, 2016 in New York, NY. This conference is designed to help those involved in international trade to better understand the related risks in order to make sound business and investment decisions. Conference attendees typically include representatives from companies, banks, and academic institutions, as well as professionals from the international trade community. This year’s conference will feature a panel of speakers who will discuss the following topics: countries hardest hit by low oil prices, Latin America and Canada after the commodities boom, risk agility and decision making in an era of man-made risks, and more.

The globalEDGE team is excited to introduce our newly redesigned country risk pages. Each country risk page can be accessed individually for via the Country Insights menu. These new pages now allow users to not only see both the country risk and business climate risk for each country, but also compare that risk rating to other countries around the globe using an interactive map, color-coded by risk rating. Users can also read about each country’s strengths and weaknesses which contribute to the risk, as well as current economic and financial trends occurring in the country. Check out these new pages to learn about country risk and business climate today! 

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.

In today’s globalized world, products are made from components all over the world. The interdependence among countries is more important than ever and international trade serves as the backbone of economic growth prospects. With this interconnectedness comes great risk; however, great opportunity also results.

Ernst & Young, a Big Four accounting firm, conducted a fraud survey across the Asia-Pacific region, finding that there is a large disconnect between company policies, enforcement, and execution that is obstructing efforts to diminish fraud. The survey consisted of 600 senior level executives from companies in countries including, Australia, China, Indonesia, Malaysia, New Zealand, Singapore, South Korea and Vietnam.

Understanding the short-term and long-term economic fluctuations is important for businesses all around the world. The global economy influences all businesses regardless of their location. To better understand these trends within the global economy, there are numerous ways to expand your knowledge base. One of these ways is the 2013 Coface Country Risk Meeting taking place on Thursday, May 2nd in New York City. This conference includes a panel of economists and business leaders that will discuss the short-term economic outlook for 2013. During the conference, there was also be an in-depth analysis on today’s rapidly growing regions and the world’s economic power bases. To register for this year’s event or to obtain more details, please visit the 2013 Coface Country Risk Meeting registration site!

According to Merriam Webster's Dictionary, ethics is the principles of conduct governing an individual or a group. This is an interpretive definition; it changes depending on culture, and that is why teaching ethics for a globalizing economy is rather difficult for current business schools.

Coface, a world leader in domestic and international trade receivable management, is hosting their annual Country Risk Meeting at the Sentry Center in New York City on Thursday, May 10, 2012.  Featured speakers include business leaders, economists, and forecasting analysts discussing the short-term economic situation on a region by region basis in North America for the rest of the 2012 calendar year.  They will focus on hot spots, booming regions, and the global economic power bases.  It is a wonderful event that spotlights major international trade and investment opportunities in today’s business arena.

Entrepreneurship is risky. Entrepreneurship is for the naïve. Entrepreneurship rarely succeeds. All of these assumptions make entrepreneurship sound like a bleak place only for the most risk-averse; the de facto position from many people is that corporate life is the way to go. But this conventional position is far from true. Building new companies is far more sensible than one may think.

The credit rating agency Standard & Poors recently downgraded the U.S. from its pristine AAA credit rating to a still strong AA+ rating. How exactly does this affect your business and the international business landscape as a whole?

Coface is a world leader in trade-credit information and protection. On Thursday, May 12, Coface will be hosting their annual Country Risk Meeting at the Sentry Center in New York, New York. A panel of economists and business leaders will tackle the short-term economic outlook for the second half of 2011, with a special focus on hot spots, booming regions and the world’s economic power bases. It should be a great and informative event with all of the current happenings in today’s business world. Coface has provided some great services for us and our viewers here at globalEDGE, and globalEDGE is helping co-sponsor this event for Coface.

Coface has played a key role in providing risk information in the country profiles and industry profiles here at globalEDGE. From an overall country rating to the business climate rating, Coface provides our viewers with an in-depth analysis of the current risk assessments and the strength and weaknesses of an economy. Not sure about expanding in your industry? The Coface risk ratings on industries in different regions of the world are sure to let you know what you’re getting into. Be sure to look into these informative sections and check out that event if you can!

Each year, Ernst & Young releases a Global Business Risk Report, which highlights the ten most significant risks to global businesses. Compiling views from leading analysts, academics and industry executives, the report does a nice job of showing what companies need to be on the lookout for in 2011 and beyond. Here is the preliminary 2011 list, with the number in parenthesis being the rank from 2010:

As I am sitting here working from home due to massive amounts of snow, it got me wondering; if my office is closed, how does weather affect other businesses worldwide? There is no question that weather affects our everyday lives. It helps us decide what we are going to do and where we are going to go, so it's no wonder that it affects businesses too.

Bad weather can have devastating effects on a business. In the last year we saw massive floods, earthquakes, and snowstorms. Such events caused disruptions in transportation and infrastructure, which in turn created obstructions for workers and the end result was that global businesses incurred large costs.

It is easy to see why many companies - especially in the logistics business, invest heavily in weather forecasting. Different types of weather technology help businesses manage risk imposed by natural disasters. The following BBC video provides examples of how technology is used to aid businesses:

A new study by Aon Consulting determined that Toronto is the most desirable city in the world for corporations to recruit and hire employees. The research included 90 cities world-wide, and compared cities based on demographics, education, government regulations, and employment practices.

In the last few days, news of yet another product recall was released. Abbott Labs, a global pharmaceutical company, informed customers that one of their baby formulas called Similac was contaminated with small beetles. This time, the damage is limited and the worst of the symptoms is a sick tummy. In other recall cases, there are serious consequences for errors in judgment on the part of the manufacturer. Case in point: Toyota. Product recalls are on the rise – Why? In the flurry of new quality management techniques such as “six sigma”, what is causing companies to miss the mark and release potentially dangerous products to the unsuspecting public?

Recession? What recession? Only select areas of the food and beverage industry struggled during the past two years. The industry as a whole performed well overall in 2009 and will likely continue to develop in promising emerging regions after having proven capable of adapting its product offer to new consumer tastes in mature markets.

Think of California's Silicon Valley back in the early 2000's. Think of the many companies that had to cut back or fail in the middle of the dot-com meltdown. Telewave Inc. became an expert at making two-way radio equipment. How did a small company such as Telewave Inc. stay alive? They followed a conservative investment strategy that didn't rely on the stock market and borrowed money. The company also focused on lower- to mid-level technology products instead of the breakthrough gadgets. Finally, they grew and spread business-cycle and industry risk across new markets. Now Telewave makes over 1,000 products, which include a ceramic autotune combiner, or "black box." It decreases the number of dropped cell calls, reduces electricity usage by 20 percent, and monitors equipment which in turn lowers personnel costs. But diversifying products can't be the only reason Telewave is still around in this global economy.

Congratulations on your new business! There are a lot of new and exciting opportunities to choose from. How do you know what will be best? By following these tips, your business can avoid frequent run-ins with the phrase, “There’s just one catch.”

It isn’t a secret that many aspects of developing countries are unappealing to the global businessperson. Decrepit urban and rural areas, lawlessness, and violence often cause companies to avoid these areas either out of fear for employee safety, logistics, or simply because they can’t find a way to make doing business there profitable. However, the fact still stands that these areas have hundreds of millions of potential customers lacking many goods and services. Additionally, there have been numerous pioneering companies which have had to modify their business strategies in order to adapt to the economic climate of these regions, and have subsequently thrived there. Here are a few of the issues that have arisen in these areas, and tips from successful companies on how they’ve handled them:

The Economist Intelligence Unit(EIU) has created a corporate barometer to survey businesspeople's confidence levels. The Corporate Expectations Barometer takes about five minutes to complete, and can be helpful in gauging the expectations of fellow businesspeople in one's own industry as well as other industries. Additionally, the EIU will prepare a customized briefing for those who complete the survey which will allow them to track their results over time and receive monthly updates, as well as being able to compare results with the EIU's own findings.

This could be a very helpful tool for the small business owner, as it helps connect different business peers and can give them an idea of where their industry could be headed. Check it out here!

One of the blogs I regularly read, ResourceShelf, recently put together a great post on the concept of due diligence in business. They include links to several different articles on variations of the topic, but the one that I found most relevant was from Deloitte, called Cross-Border Investigative Due Diligence: The Look Before You Leap Imperative. The article outlines hidden risks that firms can easily overlook before expanding internationally, and how with due diligence you can identify and neutralize those risks.

A couple months ago, we posted our very first gE blog series on Global Entrepreneurship. One of the topics we had discussed was the growing ease of not only starting a business, but also expanding your reach internationally due to increased access to computer and information technology. The internet in particular is a key development in this respect.