Epidemics and pandemics are therefore an independent business risk, as well as an amplifier of existing trends and vulnerabilities. In the long term, the COVID-19 coronavirus may serve as another reason, in addition to protectionist regulations and energy efficiency needs, for companies to re-evaluate their supply chain exposure to outbreak-prone regions and reconfigure regionally.
Businesses may also have to grapple with escalating political, economic and health security risks – for example, the resumption of trade hostilities between China and the United States. A prolonged outbreak or economic disruption could fuel public discontent in Hong Kong and mainland China, prompting crackdowns that stifle innovation and growth. Stumbling growth in emerging markets may not be able to absorb fast-growing workforces, leading to social unrest, political uncertainty, and an inability to invest in healthcare systems.
Beyond the standard concerns related to business continuity, employee protection, and market preservation, businesses, and countries should re-examine their exposure to complex and evolving interdependencies that could exacerbate the effects of pandemics and other crises. Given the cycle of panic and neglect of pandemic preparedness, once COVID-19 is contained, much of the world is likely to return to complacency and remain ill-prepared for the next inevitable outbreak. Companies that invest in strategic, operational and financial resilience to emerging global risks will be better positioned to respond and recover.