Business Risk

Looking at COVID-19’s Declining Mortality Rate

By | Business Risk, Emergent Risk, Intelligence, research and analysis | No Comments

June 26, 2020 – This week’s Situation Room dashboard takes a look at the mortality rate of COVID-19 and examines an apparent decline in the numbers. While there is some volatility at the onset of outbreaks, mortality differs most significantly between countries and regions rather than a declining much over time. Thus the change in observed global mortality for COVID-19, can be partly explained by outbreaks growing in different countries with lower mortality rates. A variety of factors contribute to differing mortality rates from one region and country to another and are summarized below. 

  • Data Collection Problems: Countries have vastly different data collection abilities when it comes to COVID-19 that are likely a chief factor of varying mortality rates. Most countries continue to have inadequate testing levels which will underreport the true number of cases in a country, but as testing increases mortality will fall. Most egregious is Mexico, where more than half of tests return positive results, ten times as much as the World Health Organization says there should be if testing was sufficient. Additionally, many developing countries do not have accurate reporting of deaths which is exacerbated by the pandemic and overwhelmed healthcare systems. Measures of excess mortality attempt to correct for this underreporting, but is not included in official COVID-19 statistics. 
  • Population Demographics: The age distribution of various countries is another significant factor which likely determines lower fatality rates. Older people are at significantly greater risk of dying from COVID-19 thus, a greater percentage of elderly people in a population in a given country, such as Italy, contributes to higher death rates from the virus.
  • Healthcare Quality: Access and quality of healthcare, notably the number of beds equipped for intensive care, ventilators and technicians trained to administer care, may impact the risk of death for patients with COVID-19. Factors like healthcare cost and availability also affect the treatment of a COVID-19 patient.
  • Underlying Health Conditions: Non-healthy practices such as smoking vary greatly between countries and contributes to a higher rate of death due to COVID-19, according to health experts.
  • Human Behavior: Many countries recognize these factors and have altered their pandemic responses to account for the local situation. For example, countries like Turkey and Sweden focused their preventive measures on protecting the elderly while giving younger generations more leeway, which affects the age distribution of confirmed cases and thus the mortality rate. Similarly, As reopening occurs in countries with active outbreaks, older people may take greater precaution to isolate themselves, shifting the age distribution of new cases and also lowering the fatality rate.

Why it Matters: Perceptions that the mortality threat of COVID-19 is not as high as previously thought may lead to stronger pushes for reopening despite high infection numbers. As a result, infection rates may continue to rise, adding to health and safety risks in certain countries since the virus can still lead to significant health issues for people of all ages who contract it. Failure to adhere to preventive measures such as social distancing and wearing masks could also lead to a large spike in cases, overwhelming healthcare systems, which may force some countries and areas to reimpose strict lockdown measures that disrupt economic recovery plans, even if death rates decline. 

Want to see the whole dashboard and a trove of other COVID related data? Contact us to see if you’re eligible for a free trial.

Emergent Risk Summer Seminar Series – Chicago and Detroit

By | Business Risk, Emergent Risk, Events, Intelligence, training | No Comments

Join us for a free concise writing seminar for corporate intelligence professionals.

This seminar will focus on assisting intelligence professionals of all levels of expertise in honing and sharpening their business writing skills. We will work through several interactive exercises, discuss editing tips, tone, word choice and ways to write on politically polarizing and sensitive topics.

ERI Seminar at Tufts University Political Risk Conference, April 2016

Date: August 2, 2018

Where: Chicago, IL

Time: 1:30 – 4:00


Date: August 7, 2018

Where: Detroit

Time: 1:30 – 4:00


Both trainings will be followed by an informal Happy Hour at a location TBD from 4:30 – 6:30.

To register, please send the name, title and email of the desired participant via the Contact Us link on this website. We have a limited number of seats, so please send your registration right away. Participation is limited to corporate, government and NGO intelligence professionals.

Six Global Risk Trends to Watch in 2016

By | Business Risk, Emergent Risk, Intelligence, ISIS, research and analysis, Risk intelligence, Uncategorized | 2 Comments

The landscape of global risks in 2016 is broad and seemingly endless. Here are six (out of many) risk trends that businesses should keep an eye on as we move into the New Year.

Disruptive Technology and Security

The pace of technological development will increase this year, and with it, there will be new associated security challenges, political risks, and needed adaptations.

The battleground between open easy-access technology for the public and government surveillance of the bad guys is expanding after Paris and San Bernardino; renewing the debate over allowing government backdoor access to encryption technology. Expect this to become a key issue in 2016 as tech companies look to protect their customers’ privacy and the integrity of encryption systems designed to protect the public from criminal hacking. They will have to balance these concerns with reputation concerns associated with allowing greater government access, or not allowing it, and later having a product associated with a major terror operation or security incident.

In a similar vein, other types of disruptive technology will continue to upend traditional business models – from payment services to ride-sharing to the introduction of more artificial intelligence in business and beyond. In 2016, we may see movement of more of these technologies into financially promising emerging markets including Sub-Saharan Africa, Myanmar, and Cuba. The upside: an improved marketplace and competition driving better services and greater market access across the board. The complication: some technologies will render more traditional market places obsolete, threaten entrenched interests and disrupt social and regulatory contracts between certain sectors and their governments. This will be especially pronounced in highly regulated, heavily unionized regions of the world, but will also play out anywhere that disruptive technology renders old ways of doing things redundant and undercuts traditional pricing models. In 2015 – in Paris, Mexico City, and other cities, taxicab drivers protested (at times violently) at – what they saw – as an unfair advantage of ride-sharing services. We’ve also seen this to a lesser degree with other online service categories… and we can expect more of it – at a greater intensity – in the coming years as business and society adapts to a rapidly changing world.

Global Political Shifts

If 2015 was a year for landmark elections, 2016 will be a year for seismic shifts in policy and implementation. Myanmar elected its first democratic government, Northern Europe shifted right while Southern Europe (Greece, Portugal, and Spain) shifted left, and Latin America moved substantially right.

Perhaps most remarkable is the shift to the right occurring in South America, largely on the backs of public frustration over mismanaged economies, sky-high inflation, and devalued currency. For Argentina, the shift will bring the country back into the international economic community and eventually lead to an improved economy. But it will take painful readjustments for this to happen. At the same time, Argentina’s ideological shift will chafe some old traditional partners like Bolivia, Ecuador, and Brazil – and influence flagging economic and political prospects of these governments too. Venezuela also saw a definitive shift towards the opposition, who now hold a parliamentary super-majority, setting the stage for a political showdown between President Nicholas Maduro and a newly empowered, but fiscally hamstrung, parliament in 2016. Brazil will see more political drama as the stage is set for a potential impeachment with the 2016 Summer Olympics just around the corner. In these countries political and social turmoil are almost a forgone conclusion while painful readjustments to economic liberalization are made and governments shift away from policies that have ravaged the economy, but provided a social safety net for the poor.

Meanwhile, in Europe, nationalist rhetoric and shifts away from moderate center left and center right parties will drive more political uncertainty. A looming potential referendum on a UK exit from the EU will drive public discourse and increase political risk for companies headquartered there, while political shifts to the left in Portugal and Greece may re-ignite discussion of a Grexit. Alongside this, refugees and terrorism will be central to political debate across the EU, but especially pronounced in France, Germany, the UK, the Netherlands, and Belgium.

In Asia, Myanmar’s new democratically elected government will focus on economic development, and attracting foreign investment, but will have to come to grips with how to eradicate institutionalized human rights problems, reigning in militias, and preparing the population to be a 21st century workforce.  

Global Migration and Increased Nationalism

2015 will be another record-breaking year for refugee flows and internally displaced peoples. In 2014, the UNHCR said over 59.2 million people were displaced by conflict and war across the globe – the highest on record since World War II. 2015 is expected to surpass these numbers. Syrian refugees make up, by far, the largest share of refugees, followed by Afghans, Iraqis, and Eritreans. These displacements – the result of war and insurgency, economic distress, and natural disasters – challenge internal stability of countries where large displacements are occurring, international politics, and overweight social-welfare systems as third-countries cope with the influx of refugees.

2016 offers only dim hope for a settlement of tensions in Syria, with the conflict ever widening. With old alliances in the neighborhood challenged by the complexity of fighting a multi-faceted conflict in which no one can agree definitively on who the good guys are (although most agree that ISIS is one of the bad guys), the potential for increased problems between parties involved is rising. As the conflict widens, we expect the flow of refugees to continue, even amidst new agreements between Turkey and the EU to limit refugee flows into Europe.

Meanwhile, increasing nationalist rhetoric, protectionism, and physical barriers to keep economic migrants and refugees from entering third countries will increase political risk, put the Schengen agreement in jeopardy, and dim prospects for full economic recovery in the EU and Baltic States. We expect legislation to follow the nationalism trend, making it more difficult for migrants and refugees to settle in or to find work in third countries, and increasing regulatory risk for companies whose EU business model is predicated on an open borders policy.

Oil prices and Petro-states

Oil prices continue to drop. OPEC’s last meeting erased any hope that the group would implement measures to stop the free fall of prices, leaving 2016 looking bleak in the oil patch and bleaker for petro-states like Venezuela, Nigeria, Angola, Saudi Arabia and Russia. Add to that, rumors that the US may drop the oil export ban in 2016. Good for the free market, bad for petro-economies who will have increased global competition. In 2016, these countries will need to diversify their economies, drop energy and electricity subsidies taking up too much of the state budget, and will almost certainly see more social and political unrest over dim economic prospects. Most likely among these is Venezuela where a new government is likely to push for substantial market liberalization and/or the ouster of President Nicholas Maduro. Both of these scenarios could bring long-term improvement, but more short-term pain for ordinary Venezuelans. In Russia, continued economic distress may lead to stronger internal state security measures, particularly if Putin’s approval rating drops over the prolonged period of economic malaise.

Prolonged ultra-low oil prices in the US will be good for companies with heavy overland supply chains and high energy costs, but will be hard on states with entrenched oil and gas economies, like North Dakota, Texas, and Colorado. Increasingly, the effects of the downturn will spread out to the industries that service the oil and gas sector, including banks with energy sector heavy portfolios.

With sanctions dropped in early 2016 (assuming IAEA compliance) Iran may be an outlier, adding significant cash flow into the economy as frozen assets are released back to the country and some business resumes with the west.

Impact of sustained Chinese economic slowdown

While we are focused on “global trends” we can’t ignore the potential global implications of slow-growth in China, especially with so many clients with value chains that begin in China. While no one has predicted an outright crash of the Chinese economy in 2016, the opaque and at times – stage-managed – nature of the Chinese economic system leaves us concerned about what we don’t know.   Increased labor unrest is anticipated as employment levels slip and some companies move their operations to cheaper overseas destinations. China’s government can be expected to make liberal use of new security laws that allow the state wide-berth to crack down on unrest and social disruption. These laws may also intensify scrutiny of foreign business in China and increase anti-competitive regulatory practices. A more pronounced slowdown in 2016 would also challenge economic recovery for other countries with heavy investment from China, including many in Sub-Saharan Africa and South America.

US Presidential Elections and Opportunist Actors

Like it or not, US Presidential elections are watched the world over. As the debates ratchet up and the big issues are debated in public, global perceptions of the country ebb and flow with the candidate that is receiving the most airtime. Foreign governments take notice, ordinary people take notice, and so do non-state actors. What this means for global issues is that there will be an added filter on public discourse – and unfortunately, it will mostly serve to oversimplify complex problems and divide the public over how to address these very serious issues. Global issues we expect to see play out on the election debate stage this year and become key election drivers include immigration and migration, technology and security, terrorism, and the Paris Climate Agreement.  

We would not be surprised to see strategically timed power plays from Russia, China, North Korea, or other countries who may feel that the current US administration will have a more predictable response than an incoming President with a harder foreign policy stance. We also anticipate more attempted attacks from terror organizations potentially with timing and location selected to achieve maximum political advantage and capitalize on increased fear of terrorism in the US and Europe.



Emerging Risk: The Converging World of Cyber and Physical Threats to Business and Security

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I’ve been busy this week preparing for a presentation I will give at a conference in Park City, Utah next week sponsored by Critical Intel – a firm that specializes in intelligence analysis for critical infrastructure – specifically – the electric and power sector.  I will be focusing my talk around building an internal intelligence function to protect critical infrastructure, something I did in a previous life.  And it brought me around again to thinking about how dependent we are on critical infrastructure and well functioning IT systems – and how the physical and cyber threat landscape converges more and more everyday.

When I mention critical infrastructure and especially power and electric infrastructure to people not in this line of work – you can almost hear them yawning in their head. But the truth is, if ever there is was a more critical threat to our economy, way of life, and in many cases, very survival, it is the potential for an actor (whether state or non-state, criminal or terrorist) to take out large portions of the electric grid.

Consider this:

The electric grid is the only one of 16 sectors identified by the Department of Homeland Security that supports the other 15 completely.  

While oil and gas also support a large portion of those through supply chain and power generation, electricity supports everything and that everything is increasingly automated without many underlying processes that would allow them to be run without computers – or electricity.  Think about this.

I lived through a small scale demonstration of what could happen in the event of a large scale attack on the power grid when we lost power in Houston during Hurricane Ike for between 1-4 weeks – depending on where you lived.  Here’s what it looked like:

  • No traffic lights and no street lights
  • Huge piles of rotting food behind groceries stores. Grocery stores closed.
  • Emptied refrigerator contents at everyone’s curb (the smell from milk products that have gone off is overwhelming in a couple days time in 100 degree heat)
  • Closed gas stations and long lines at gas stations that were open, with people filling up extra tanks for generators
  • Hot, damp houses with no electricity, no phones (all need to be charged) no computers
  • Hospitals, in this case were the first to have their power restored, but in a more catastrophic situation – like Katrina – life saving machines, ventilators, dialysis, etc – would be unavailable to people who needed it
  • Banks can’t open, transfer money and people cannot withdraw their money

I could go on, but clearly, you see what I’m getting at here – and if you’ve ever lived through a natural disaster – or even a lengthy power outage, much of this is not a surprise.  Its not rocket science, but its also something we tend not to think about until the actual threat is looming.

The threat comes from myriad places and angles.  For example, yesterday the International Business Times reported that ISIS – largely perceived as a physical threat to security in the Middle East and beyond – is building a cyber army dedicated to attacking US financial and critical infrastructure.  Also yesterday, Politico reported on USG concerns over a Cyber-Fort Hood. Specifically, they are concerned about a rogue insider – an IT system administrator – with the knowledge and access to create a massive internal system failure impacting critical infrastructure. So an angry employee who you might think of as more of a work-place violence threat, might actually go for something bigger and more economically damaging through the IT side of things.  (There are plenty of examples of this happening on a smaller scale already) There are the state sponsored, Stuxnet type viruses of the world too.  Consider it’s “sister” virus Shamoon (largely believed to be an Iranian retaliation) that took out 30,000 computers at Saudi Aramco in 2012.  Luckily that virus didn’t impact their refineries (which could have catastrophic consequences), but that doesn’t mean something like it won’t in the future.  And here again we are moving from what has largely been a physical threat of more traditional warfare between states – into a backend, more covert type of warfare – with potentially disastrous implications for national economic and physical security – not to mention for any business that relies on electricity to make a profit.  (Are there any that DON’T?)

So I need to get back to that presentation now: discussing how building an effective intelligence function within a business can assist in mitigating this risk by monitoring threats, providing advanced warning of potential threats, and educating the workforce and executives on how these threats can impact the bottom line in their business, not to mention national security.  It s a different animal than working in intelligence in a large government organization and it requires diplomacy, relationship building, research and analysis, and marketing skills to make it work.  And though your bottom line may be protecting the interests of the business, you are in the process protecting key critical infrastructure.

Its a pretty big deal.

Implications of IS Conflict for Companies Operating in the Region

By | Business Risk, ISIS | No Comments

I attended a Brookings/Carnegie event yesterday where Matthew Olson, current Director of the National Center for Counter Terrorism, spoke on the threat posed by “The Islamic State” or IS (aka ISIS, ISIL).  It was timely, as we have been working on a project examining the near term implications of the group’s advance into northern Iraq for a company that operates throughout the region.

Olson’s comments were not altogether surprising, but he was reasonably candid in his assessment and provided more in the way of discussion on “strategy” than President Obama did in his recent press conference that was focused on… the color of his suit.  

Some points that Olson made in his remarks:

1) On the adversary: IS has the most effective propaganda and media presence of any terrorist group in history.  Combined with vast uncontrolled regions of Iraq and Syria and disenfranchised Sunni Muslims who feel they lack options, The conditions were right for IS.  Rooting out their physical and ideological presence is going to be a significant challenge for the international community.  Lack of political progress in both countries will exacerbate these problems.

2) On the strategy: The US is taking a multi-faceted approach in Iraq that includes working with regional and international partners to undertake aerial strikes, provide arms to Iraqi and Kurdish forces, enhance intelligence collection efforts, provide humanitarian assistance to displaced people, assist with political reform, and counter propaganda.

3) On Syria and Assad: The strategy by necessity must include Syria, but IS cannot be defeated with Assad in power.

So what does IS and the US/allied intervention in the region mean for foreign companies operating there?  Obviously, depending on the industry, the implications will be different.  Some things to be thinking about beyond the obvious and most important piece: the safety and security of all of your employees:

  • Supply chain: IS has integrated itself into local economies in varying degrees – in some cases forcing local gas distributors to use the black market fuel produced through the group’s illicit operations – and charging three times the normal price.  They are also charging tariffs to people coming in and out of cities like Mosul.  Could your distributors get caught up in this?  There are security, cost and ethical concerns here.
  • Supply chain logistics: Skirmishes between IS and ground forces, as well as aerial strikes (as of yesterday 121 had been carried out by the US) will at best create no-go areas and may delay deliveries of product to market, and at worst could result in local employees being caught up in violence.
  • Local economics: In some areas IS has replaced the state in the local economic system, redistributing resources and effectively creating a new governance and economic structure.  As IS is driven out of these areas, there may be near term food and fuel shortages, among other fall out until the area recovers some sense of equilibrium again.
  • Extortion: Reporting indicates that IS compels businesses to run through a mixture of corruption and extortion.  On oil fields it pays workers to ensure they stay and provide the product to feed the black market fuel trade and in other cases, business owners and their families are threatened or killed if they do not comply with IS orders.  It also engages in robbery – emptying local banks in towns it takes over, among other things.  This type of activity is most likely to impact businesses that distribute products to small businesses in the affected areas.

There is much more to think about, and it is much more complicated than I lay out here.  But these are some of the myriad issues that must be considered for companies with people, investments, and business in the affected areas of northern Iraq.