13 Nov 2019
Five business risks on the horizon for 2030
Article

Five business risks on the horizon for 2030

As we’re about to enter a new decade it’s worth reviewing your business risks to help you prepare for the short to medium future.

Business risk 1: The water wars

Large-scale land clearing and erosion of top soil has meant that the water table may never be replenished in many places around Australia. 

The drought is unlikely to break any time soon and it’s not just a country issue. Many towns and cities around Australia risk running dry1 and now have heavy water restrictions2.

Risk management considerations:

  • Does your business need water for cleaning, washing, or manufacturing? If so, what can you do reduce water usage? 
  • If you had to pay more for your water, how will it impact your bottom line?

Man working in robotics lab

Business risk 2: The rise of the robots and automated processes

While some automated processes can greatly streamline workflow and cut wage costs, small business owners face increased competition from bigger players using automation at a much bigger scale3 to outmanoeuvre them.

Errors from automated process can also impact your bottom line if you don’t have the right people performing quality control and maintenance. A robot might be great at performing monotonous tasks, but if it’s not calibrated properly then entire batches of work can be performed poorly.

Risk management considerations:

  • Could a bigger business take your territory by performing the same tasks, or producing similar products, faster and cheaper?
  • What are the costs of training up employees to use new equipment? And what are the additional maintenance costs?

Read about the top trending risks in the digital era. 

Busy departures area in an airport

Business risk 3: Population boom
 
Australia’s population is expected to jump by 20% by 20304 and new infrastructure and development projects could change your local area. But even before then, there will be added stress on our cities as people leave the land when towns run out of water.
 
New shopping centres in growth areas tend to attract traffic away from smaller, street-based shops, while other businesses could be forced to close or relocate to make way for new roads or apartment blocks.
 
Risk management considerations:
  • Is your local area ripe for developers and therefore opportunities for competitors with similar offerings to move into your area?
  • Is zoning in your local area tightly controlled or is it likely to change to allow bigger developments?
Business risk 4: Copycat products
 
Copycat products5 look just like yours and exploit your hard-won brand recognition.
 
Unfortunately, the globalisation of manufacturing means unscrupulous companies are prepared to cut corners on quality of materials and manufacturing processes to produce cheap knockoffs.
 
Because the knockoffs are intentionally similar6, they can also affect the reputation of the products you carefully developed (with years of investment in R&D).
 
If consumers buy the copycat and don’t like it, there’s a very real risk they may not even try yours, or worse, think your product is also inferior.
 
Risk management considerations:
  • Is your intellectual property protected?
  • How are you ensuring you produce superior products?

Group of young people looking at their smartphones in the street

Business risk 5: Digital wildfires and fake news 

Digital wildfires7 are rumours that spread rapidly through social media and cause offline harm, with people accepting lies as facts.

Digital wildfires might also be spread about your business, through no fault of your own. The risk here is that a disgruntled ex-employee or competitor spreads rumours online, damaging your reputation.

What can do you about it?

Academics researching the phenomenon for the Economic & Social Research Council, said the first step is to police digital wildfires on social media8, rather than fight fire with fire (i.e. arguments) and present facts to correct false information and dismiss rumours.

Change is inevitable – but you can prepare for it

It can be exhausting keeping up with the news cycle to work out which events might impact your small business now and into the future. An insurance broker who can draw on knowledge of plenty of other businesses like yours can help you review the big risks in your industry – and prepare to face them. 

 
Find a broker for your business:
Learn more about business risk assessments:

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1https://theconversation.com/this-is-what-australias-growing-cities-need-to-do-to-avoid-running-dry-86301
2https://www.environment.nsw.gov.au/questions/information-on-water-restrictions
3https://www.weforum.org/agenda/2019/02/the-outlook-for-automation-and-manufacturing-jobs-in-seven-charts
4https://www.theguardian.com/australia-news/2018/nov/22/australias-population-forecast-to-hit-30-million-by-2029
5https://www.monash.edu/business/marketing/marketing-dictionary/c/copycat-product
6https://theconversation.com/copycat-products-living-dangerously-with-intellectual-property-92540
7http://reports.weforum.org/global-risks-2018/digital-wildfires/
8https://theconversation.com/how-to-police-digital-wildfires-on-social-media-63220

 

 

This advice is general in nature and has been prepared without taking into account your objectives, financial situation or needs and may not be right for you. You must decide whether or not it is appropriate, in light of your own circumstances, to act on this advice. To decide if QBE’s products are right for you, please ensure you obtain and consider the Policy Wording or Product Disclosure Statements and Target Market Determinations, available online at QBE.com/au. Insurance issued and underwritten by QBE Insurance (Australia) Limited (ABN 78 003 191 035, AFSL 239545).

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