The Covid-19 pandemic shines a spotlight on the systemic risk to global business

This crisis is a metaphor for our general failure to entertain, let alone take actions to mitigate, global systemic risk, writes Leslie Willcocks

 
Commentators have suggested that the global economy and just about everything else will be irreversibly changed as a result of the coronavirus pandemic. There will be a before-coronavirus and an after-coronavirus world. Ironically, with a few exceptions (for example, Goldin and Muggah, 2020), virtually no person or agency making such claims predicted the coronavirus pandemic itself. Nor is it clear if they are referring to how people think about the global economy or to changes in material circumstances, or perhaps both. One truth that has been made manifest is that businesses have been operating slightly blindly in an interconnected, integrated, complex and dynamic world for some time now, and that these tendencies are accelerating and creating radical uncertainty and systemic risk for both the global and business environments.

Such tendencies were always inherent in, and in fact a defining feature of, the third wave of globalisation from the 1980s to the present. Globalisation brings risks, and these have become increasingly systemic. The obvious examples of likely impacts are the financial crisis that swept through Southeast Asia in the late 1990s, the financial crisis that started in the US in 2008 and moved around the world, and the 2020 pandemic that impacted economies globally and interconnectedly, affecting areas such as economic growth, social and personal lives, work, supply chains and financial stability.

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Πηγή: blogs.lse.ac.uk