Over the last six years, companies have had to grapple with five major “uncertainty shocks”: First it was Brexit in 2016, followed by the U.S. presidential election, China-U.S. trade-tensions, the Covid-19 pandemic, and in 2022 the Ukraine war.
Visualizing the Rise of Global Economic Uncertainty
Three decades of data shed light on five key drivers.
September 29, 2022
HBR Staff/Manuel De Los Reyes Rubio/EyeEm/Lesia_G/Getty Images
Summary.
Researchers have documented a rise in economic uncertainty in recent years, using text-based measures that track descriptions of economic conditions by the Economist Intelligence Unit. Not only does that work show that uncertainty is rising, it points to five crises that are driving it — including, most recently, the invasion of Ukraine. The researchers also suggest strategies for dealing with uncertainty: Pay more attention to geopolitics as it will continue to affect your business. Be willing to pay for flexibility, so you can change course more easily in the future. And invest in contingency planning to gain practice responding to economic and political shocks.