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Tech Hubs in the US Are Fueling Regional Divides

Source: Brookings Institution

America’s high-tech innovation sector has exacerbated the nation’s regional divides, fueling growth in select metropolitan areas at the expense of other cities in the country. Boston, San Francisco, San Jose, Seattle and San Diego have benefited the most from the tech boom, accounting for “more than 90% of the nation’s innovation-sector growth during the years 2005 to 2017.” 

A recent Brookings Institution report warned that the sector’s geographical concentration was a “grave national problem.” From spiraling home prices in tech hub cities to underdevelopment in regions left behind, “regional divergence is … clearly driving ‘backlash’ political dynamics.”

The report urges the U.S. government to immediately counter the trend by “creating eight to 10 new regional ‘growth centers,’” tying in tax and regulatory benefits to encourage the tech-innovation industry to expand beyond its concentrated hubs. The think tank estimated federal government investment for such an initiative to be $100 billion over 10 years — “substantially less than the 10-year cost of U.S. fossil fuel subsidies.”

Coronavirus Is Reshaping the Global Risk Landscape

Source: COVID-19 Risks Outlook: A Preliminary Mapping and Its Implications. WEF

Two-thirds of senior risk professionals surveyed cite a prolonged global recession as the top concern for their companies due to COVID-19, followed by a surge in bankruptcies and an increasing vulnerability to cyberattacks. 

Nearly 350 senior risk professionals analyzed 31 risks across the three dimensions seen in the chart above for the COVID-19 Risks Outlook survey. From this, four key shifts were identified in the risk landscape: economic shifts, sustainability setbacks, societal anxieties and technology dependence. The economic crisis will implicate each of these areas, for example, 18% of respondents expect a shortage in investment for climate action.

By recognizing these shifts, the World Economic Forum, which produced the report, hopes to raise awareness as governments and businesses design post-lockdown measures. “The results of the survey … are not intended as forecasts,” the report notes, “Instead, they are a reminder of the need for proactive action today to shape the desired new normal rather than one that may develop if emerging risks are not addressed.”

How to Determine When It’s Safe to Fly and What to Expect

Source: Oliver Wyman

Net bookings are down 99.5% year over year, and booked revenue is 103% lower in the U.S. airline industry, according to Forbes. The government and airline industry will need to reassure travelers with transparency about how they are measuring and responding to the risk caused by coronavirus.

Establishing a threat-level assessment, as well as enforcing a safety roadmap for airlines to follow, is a starting point in building the confidence for travelers during the pandemic. Oliver Wyman has proposed a five-level color-coded threat assessment, like the one above, as a potential framework for governments and the aviation industry to code the pandemic threat level. With insight into how the industry is classifying risk, travelers can make informed decisions about when to travel and prepare for any new airport processes in place to detect and contain COVID-19.

Long-term impacts to the industry are expected: An analysis by IATA in May states that it doesn’t expect worldwide passenger demand to surpass 2019 levels until 2023. “Making the public feel safe is also important for the broader economy,” the Forbes article notes, as “a revival in air travel, most likely accompanied by a return of business travel, tourism, and hotel stays, would mean the economy is coming back.”

52% of Consumers Expect US Stock Prices to Be Higher One Year From Now

Source: New York Fed Survey of Consumer Expectations, April 2020

More than half of respondents to a New York Federal Reserve survey expect stock market prices to be higher in a year’s time, despite consumer expectations deteriorating sharply in other economic categories. Expectations for higher prices increased from 47.7% of respondents in March to 51.8% — higher than they’ve been for at least six years. 

Conversely, the survey continued to show a steep decline in expectations for growth in household income, dropping from 3.10% of consumers in February who expected their income to be higher next year to 1.87% in April. Perhaps surprisingly, expectations for higher unemployment, though currently at a high, started to decline in April at 47.57% compared to 50.86% recorded in March. 

With stock prices at record lows, some are wondering if this is a good time to buy stocks and hoping they’ll see substantial increases in value as the economy recovers. The stock value of some companies has actually risen due to the pandemic, according to Forbes. The companies seeing success have leveraged the increased demand for e-commerce and delivery services, setting themselves up for success in a post-coronavirus economy.

Employee Stress Levels Hitting New Highs Due to Coronavirus

Source: MetLife, U.S. Employee Benefit Navigating Together: Trends Study 2020

Sixty-seven percent of employees are experiencing higher levels of stress due to COVID-19 — with work and finances being their biggest concerns. Not surprisingly, a larger proportion of health care workers and women, many of whom have taken on child care and schooling duties in addition to their careers, are reporting heightened stress levels, a study from MetLife reports.

The findings come as employers grapple with providing conducive working environments for employees in these unprecedented conditions. Data from before and during the crisis show that greater support from employers results in more successful employees. Research from 2019 shows that 67% of successful employees reported having the necessary flexibility in work policies to manage work and life.

Understanding employees’ experiences and needs has never been more paramount for organizations. This “new normal” necessitates enhanced employee emotional wellness support and financial wellness initiatives for managing work-life stress. Employers who lead with empathy will have a “more engaged, productive and successful workforce.” 

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