Cyber security threats and greater restrictions in global data flows are among the 10 top geopolitical risks in 2021, a consultancy revealed in its latest report.
As more people work remotely and stay online for longer due to coronavirus-related restrictions, there will be an increase in people's exposure to cyber attacks, Eurasia Group said in its Top risks 2021 report.
This year will see cyber crimes creating “unprecedented technological and geopolitical risk”, the think-tank predicted.
“Hundreds of millions of people will continue to work, shop, receive an education, and socialise from home in 2021 … much of this activity uses less secure home computers and connections, giving bad actors more vulnerabilities to exploit,” it said.
The cyber security market is forecast to be worth $363.05 billion in 2025, almost 125 per cent more than the amount spent last year, according to Mordor Intelligence, a research consultancy.
The market is projected to grow at an annual growth rate of 14.5 per cent over the next five years.
The widespread roll-out of fifth-generation technology and an increase in the number of connected devices will increase opportunities for cyber criminals, the report said.
“There is no broadly accepted industry standard for ensuring low-cost, commodity devices are secure and regularly updated to protect against hacking,” it added.
There are also no rules for governments and the private sector globally setting out state behaviour in cyberspace, leading to countries and companies relying on "unproven strategies such as targeted economic sanctions and 'naming and shaming'".
Mistrust in the online sphere could also lead to a “slowdown or halt” in the free flow of sensitive data across borders that could raise costs for businesses, the report added, causing friction for popular apps and digital business models.
Although the risks begin with the US and China, they do not end there, Eurasia Group said, as governments globally become increasingly concerned about who is accessing their citizens' data.
The outgoing US administration’s attempts to ban the popular Chinese smartphone apps TikTok and WeChat, coupled with India’s moves to blacklist dozens of Chinese apps, risk exacerbating what is seen as a damaging trend.
“When the world’s biggest economy [the US] and its most populous democracy [India] try to ban apps over these concerns, it encourages other countries to do the same.
“Authorities around the world have become increasingly preoccupied that their citizens’ personal data could fall into the hands of adversaries who could use it to improve their AI [artificial intelligence] algorithms, influence public opinion, or commit blackmail.”
Other risks highlighted include a divided US, climate change, the ongoing US-China trade dispute, the lasting effects of Covid-19 and the effects of low oil prices on countries in the Middle East.
The push for net-zero emissions targets will create 'enormous' opportunities for private capital, but the ultimate winners and losers will be determined as much by political factors as market forces, the report warned.
The renewable energy sphere could move from an area "of global cooperation to an arena of global competition", as the US competes with China directly in clean technology sectors such as batteries and power control systems.
"Some parts of the clean energy supply chain will come under bifurcation pressures not unlike those seen in 5G, particularly where the security of ever-more complex grids is involved," the report said.
Although 2021 started with positive news on Covid-19 vaccines, the pandemic will leave a “legacy of high debt, displaced workers and lost trust”, it said.
Energy-producing countries in the Middle East and North Africa faced a collapse in global energy demand in 2020, which left left governments from Algeria to Iran facing cash shortfalls and weakened economies at the same time as they needed to handle health crises.
Energy prices are likely to remain low this year, the report said, keeping the pressure on governments in some countries that were already facing instability before Covid-19 struck.
“Many will cut spending, damaging nascent private sectors and fuelling unemployment.”