Political fears affecting business decisions

Businesses concerned about terrorism and political violence

Businesses are being deterred from choosing city locations and investing overseas due to growing concern over political violence and terrorism, new research has shown.

According to a report published today by insurance firm Lloyd’s, concerns over terrorism and political violence risks are increasingly affecting board decisions.

The report, entitled ‘Under Attack: Global business and the threat of political violence’, reveals that over a third of companies avoid investing in overseas markets due to fears of political violence, while 20% have passed up on promising business opportunities for the same reason.

However, according to Lord Levene, chairman of Lloyd’s, businesses have betrayed a significant lack of understanding of the key threats. “There is a large gap between what businesses perceive as a threat and the reality,” he said.

“Many companies are changing their plans based on perceived threats, which is a problem if their information is incorrect.”

The report found that new risks, such as cyber terrorism and home grown terrorism, are emerging and are often being ignored by businesses.

“Media coverage tends to focus on radical religious terrorism and rarely touches on the emergence of new risks, such as threats to supply chains, cyber terrorism, home grown terrorism and the threat of chemical, biological, nuclear and radioactive attack,” Levene added.

However, the report also found that despite businesses’ concerns, around half of small firms have either an inadequate continuity plan in place to deal with such an eventuality or none at all.

© Crimson Business Ltd. 2007

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