Unemployment is the top concern for business leaders across the globe, according to the World Economic Forum, as economies grapple with rising job losses during the Covid-19 pandemic.
Fears around the spread of infectious diseases have become the second-biggest risk factor for executives, with fiscal crisis – the leading concern in 2019 – pushed into third place, the WEF’s Regional Risks for Doing Business 2020 report found.
“The employment disruptions caused by the pandemic, rising automation and the transition to greener economies are fundamentally changing labour markets,” said Saadia Zahidi, managing director at the WEF. “As we emerge from the crisis, leaders have a remarkable opportunity to create new jobs, support living wages, and reimagine social safety nets to adequately meet the challenges in the labour markets of tomorrow.”
While the study’s top risks are mostly related to economics, climate-related risks are causing greater concern this year, with natural catastrophes up seven places on the ranking and extreme weather events up five.
Infectious diseases progressed 28 spots and now are the second most recurring risk, appearing in the top 10 in all regions except South Asia.
In the Middle East and North Africa, the top risk was energy price shock, followed by fiscal crises in second and concerns about the spread of infectious diseases in third.
The pandemic has now claimed more than 1 million lives and infected more than 35 million, according to tracking data from Worldometer. Movement restrictions to help curb the spread of the virus have led to mounting unemployment globally as businesses struggle to absorb the economic downturn.
In the UK, the unemployment rate hit 4.1 per cent in the second quarter of the year, while in the US the unemployment rate in September was 7.9 per cent.
The world faces the risk of "severe economic scarring" from job losses, bankruptcies and the disruption of education, according to the International Monetary Fund, which is set to revise its 2020 forecast for the global economy upwards in the coming week on the back of better-than-expected growth in the second and third quarters.
The Washington-based lender warned of a "partial and uneven recovery" in 2021 and expects global output to remain "well below" its pre-pandemic projections over the medium term. This will be a setback to the improvement of living standards for almost all countries, it warned.
"This crisis has also made inequality even worse because of its disproportionate impact on low-skilled workers, women, and young people," Kristalina Georgieva, the IMF's managing director, said on Tuesday.
"There are clearly winners and losers – and we risk ending up with a Tale of Two Cities. We need to find a way out."
The WEF’s poll of 12,000 business leaders across 127 countries assesses 30 risks, including terrorist attacks, extreme weather events and state collapse or crisis.
“The Covid-19 crisis has shone a spotlight on organisational resilience. As firms look to the future, they are matching their risk and resilience arrangements with a threat landscape marked by significant customer and workforce behavioural shifts,” said John Doyle, president and chief executive of Marsh, a global professional services company.
“Just as economic and climate concerns will require firms to refocus business plans, a greater reliance on digital infrastructures will mean a marked increase in cyber risk exposures. To optimise recovery, organisations will need to build greater preparedness into their business models in order to be more resilient in the face of future disruptions.”
