Developing economies lead in risk management
A study by BT Global Services indicated that developed markets are less likely to adopt risk management strategies.
Risk management and the subsequent benefits are being embraced more readily in developing economies then in developed countries according to a report by BT Global Services.
The BT report study demonstrated that enterprises in Brazil, China, India and South Africa, are more likely than their counterparts in developed markets to perceive risk management as a means to increase competitive advantage, while at the same time encourage innovation and creativity.
Tareque Choudhury, head of BTs security practice for MEA said, “Developed markets have been aware of the risks associated with countries experiencing aggressive economic growth. Our evidence suggests that developing countries, fully committed to international collaboration, are building risk management strategies set to go beyond even western standards.”
The impact of major global events and issues is taken into consideration by the risk management strategies of 72% of businesses in Brazil, China, India and South Africa, compared to just 48% in the US and Europe. Businesses in mature markets are less nervous of future risks overall, although 36% still believe they will be impacted or highly impacted by a global economic downturn.
According to the study 89% of the businesses in the developing world see international collaboration, as being crucial to future success. Conversely 68% of those businesses were dubious about the confidence that ‘developed’ markets placed in the risk management strategies. The rise of the role of corporate security officer (CRO) or corporate risk officer (CRO) has also become more prevalent in these developing markets.
“In the Middle East, BT is starting to see an increase in the amount of risk management initiatives from companies. Companies are finding it difficult to hire adequate resources to perform risk management. Therefore, they are looking at organisations to provide this service,” Choudhury added.
The survey encompassed 2000 senior executives around the world including the US, Germany, Brazil and China.
Choudhury concluded, “It is vital that international organisations ensure their risk management plans cover all eventualities – no matter how unlikely the risk seems. And this should be seen, as it largely is in emerging markets, as an opportunity to stimulate growth and liberate innovation, rather than a chore or an unnecessary expense.”