Developing economies seem to have overtaken developed markets when it comes to capitalising on the benefits of risk management BT`S LATEST international study, conducted by Datamonitor, has thrown into stark relief one aspect of globalisation and how it is transforming attitudes between businesses in the developed world and those in developing markets. The report, Threatening Skies: Risk in the Global Economy, is a snapshot of the opinions and anxieties of board-level executives from around the world about risk management and its impact on collaboration and growth.

Presented in SA by Mark Danton, head of Marketing Security Propositions at BT, the research interviewed over 2 000 senior executives from SA, Brazil, China, India, the US, the UK, France, Germany, Spain and Sweden.

The survey found that developing economies seem to have overtaken developed markets when it comes to capitalising on the benefits of risk management. Enterprises in Brazil, China, India and South Africa are more likely than those in "developed" economies to see risk management as a means of increasing competitive advantage and encouraging innovation and creativity. They are also significantly more likely to be investing heavily in risk management strategies and systems than their counterparts in the US and Europe.

Businesses in developing countries have acted on this by being more likely to have a board-level corporate security officer (CSO) or corporate risk officer (CRO), more likely to view this as a valued investment and twice as likely to have a risk management strategy for global risks. "A higher proportion of South African respondents than those from any other country said that their own risk management would not provide an obstacle to doing business either at home or abroad," says Danton.

NEW VS. OLD

The immediate conclusion would be that developed markets need to learn how and why businesses in emerging economies have such differing attitudes to risk, says Danton. The vast majority of businesses in the developing world (89%) see international collaboration, either intra- or inter-company, as being vital to the success of their business in the future. But a large proportion (68%) also believes that organisations from developed markets remain suspicious of the assurances they offer about their risk management policies, particularly when it comes to ICT, which clearly bodes ill for successful collaboration.

At home, developing markets are more likely to trust their staff than developed markets are. However, a higher proportion of respondents from SA than from any other country believe it is not possible to bring down the cost of risk management without compromising security. "SA had the lowest proportion of respondents across all countries that trust their staff implicitly," said Danton.

Another area of paramount importance to South African businesses is the security of energy and water. "Sixty-nine percent of South African respondents graded this as level four or five on the scale of impact (five being high impact) compared to a global average of 35%," Danton said. "The other developing countries also considered water and energy security as potentially high impact, while global economic slowdown and credit crunch score highly in the developed markets overall."