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New Delhi: Trade policy restrictions between countries, geopolitical uncertainties, and the emergence of Artificial Intelligence (AI) will be the biggest disruptors for businesses in 2024, said a report by global consultancy KPMG on Tuesday.
The findings appear in KPMG’s report titled “Top risks forecast: Bottom lines for business in 2024 and beyond”. The report shines a light on the complex challenges facing companies looking to grow internationally at a time of increasing divergence on regulation, conflict, technological advancement and political uncertainty.
One of the biggest is trade wars and the imposition of retaliatory tariffs.
“Global trade restrictions have been on the rise, with approximately 3,000 restrictions imposed, nearly tripling since 2019. This trend of protectionist trade policies poses challenges for organisations operating in international markets, the report stated.
Such restrictions can create barriers and hinder economic growth, affecting supply chains and market access. Organizations should be prepared to navigate these trade policy restrictions and explore alternative strategies to mitigate potential disruptions, it said.
“The geopolitical landscape is characterized by increasing vulnerability, driven by various factors such as rapid technological advancements, climate change and geopolitical tensions,” it stated, adding that in 2023, 91 countries were involved in some form of conflict, up from 58 in 2008.
“This escalation of conflict has a profound impact on the global economy, with conflict estimated to have a 12.9% impact on global GDP. To mitigate the risks associated with vulnerability, organisations must prioritise operational resilience,” the report stated.
The report said that investment in AI has increased more than fivefold between 2013 and 2023, and while AI presents immense opportunities, it also brings about governance gaps that organizations must address. “Ethical and responsible AI deployment is crucial to maintain trust among stakeholders. Organisations should prioritise transparency, accountability, and fairness in their AI systems to mitigate potential risks and ensure its responsible integration into their operations.”