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WTW Research Network Annual Review 2023

By Omar Samhan and Elisabeth Braw | May 19, 2023

Businesses have had to navigate pressures in a global trade system full of people risks associated with geopolitics, trade tensions, regulatory crackdowns, disruptive technologies, and pandemics.
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The people risks associated with geopolitics, trade tensions, regulatory crackdowns, disruptive technologies, and pandemics have all been steadily increasing in the last few years. Multilayered compound risks have ushered a more precarious international system, characterized by increasing entropy amongst and within states. Businesses have had the unenviable task of having to navigate these pressures in a global trade system no longer marked by predictability, stability, and certainty. C-suite executives have had to adjust their modes of operations, with a shift of emphasis from efficiency to more resilience, on various fronts such as supply chains, high-technology products, and even whole business models. As geopolitics rises to the top of risk registers, resilience – individual, corporate, and societal – has become more of an imperative spanning everything from our food and water systems to our environment.

Much of the current era can be marked by the merging of the public and private sectors to effectively deal with society’s increasingly complex problems. Current power dynamics in the international structure have given rise to a new form of expanding state power for geopolitical purposes. State and non-state actors are now able to use a plethora of strategies to further their goals in pursuit of a larger strategic objective. These include cyber attacks, grayzone aggression, sanctions, and subversive business practices that affect target governments’ financial positions in international markets. The Covid-19 pandemic appears to have been one of those stressors that encompasses human capital, territory, technology, and natural resources. To better comprehend these shifting dynamics and what they mean for corporations, the WTW Research Network launched a geopolitical risk research program designed to provide a deeper, more sophisticated understanding of issues ranging from the influence of China in the world, grayzone aggression, and the socio-political implications of climate change.

The Russia/Ukraine conflict has raised important questions of corporate neutrality and how corporations can navigate reputational challenges in a world increasingly dominated by social media and consumer boycotts. The WRN has worked closely with Elisabeth Braw, of the American Enterprise Institute (AEI), to better understand this dynamic and states’ use of grayzone aggression to advance national goals. Chinese consumer boycotts of Western brands and Western boycotts of Russian goods have put companies in delicate positions, balancing shareholder value while also having to appeal to their main customer base. This can be seen as part of a larger ESG trend towards a larger stakeholder approach undertaken by corporates and multinationals to act as responsible societal actors.

While balancing consumer sentiments may fall under the remit of corporations, societal resilience is a society-wide endeavor, led by a symbiotic relationship between governments, civil society and the private sector. WTW continues to be a corporate partner of the National Preparedness Commission , in particular to understand how markets can be more resilient in the face of multiple and cascading crises. Given the debilitating nature of the Covid-19 pandemic on economies, healthcare systems, and social infrastructure, the Commission hopes its work will have a strategic yet practical impact on how the UK – and the world – views society-wide crises.

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Authors

Technology and People Risks Analyst
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Senior Fellow at American Enterprise Institute and a consultant with WTW Research Network
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