2022 AND 2031 Technology, Media & Telecommunications (TMT) Perspectives on Top Risks

For instance, even though the more restrictive pandemic-related regulations (e.g., shelter-in-place orders) have been eased in many parts of the world, the potential impact of new government policies on business performance remains at the top of TMT executives’ most pressing risk issues. This concern, which was also the number one risk last year, reflects the widespread impact of doing business under aggressive rules introduced to curb the spread of COVID-19 and related new variants.

In 2020, government restrictions on travel, congregating for social events and opening businesses had devastating impacts on organizations of all types and sizes. Going into 2022, there is clearly a lingering fear that governments may still impose tighter restrictions on the movement of goods and people should there be another breakout or should the virus become an endemic problem, which is appearing to be more likely with the passage of time.

Overall, the post-pandemic period has introduced a new era of heightened regulation for the TMT industry. For instance, one major concern is the Biden administration’s stepped-up efforts on price gouging and anticompetitive practices as part of its efforts to address supply chain issues that are plaguing companies of all industries and driving prices up for consumers. Also, the administration’s data privacy crackdown, vigorous enforcement of antitrust laws and investigations of so-called anticompetitive mergers are all part of an intensifying regulatory landscape^[1].

TMT business leaders perceive the impact on customer demand of market conditions imposed by and in response to the coronavirus as one of the biggest threats to their companies — it comes in at number three in this year’s top-risk rankings. While these pandemic-related concerns are valid, it is worth noting that the TMT industry’s tech-savvy workforce has proven more capable of dealing with related disruptions than other industry sectors.

Prudent business leaders understand that resilient organizations need to have contingency plans in place to address threats, whether mild or severe, that could impact their business. In today’s dynamic risk environment, boards (and increasingly regulators) are demanding that executives demonstrate how their organizations are building resilience against known and unknown threats.

In the 2022 survey, TMT leaders identified the potential reputational impact of not being sufficiently resilient and/or agile enough to manage an unexpected crisis as their fourth top risk issue. This result is not a surprise. Whether a cyberattack or data privacy breach, technology outage, environmental or labor troubles, there’s no shortage of events that can create reputational issues for TMT organizations.

Sometimes these reputational issues emanate from third-party relationships. For example, recently, an internet outage at a major content delivery network provider temporarily knocked out several major websites around the world. Fortunately, customers were able to mitigate the impact of the outage by shifting workloads to alternate providers, proving the resilience concept of substitutability^[3]. Still, TMT business leaders perceive third-party risks arising from their reliance on outsourcing and strategic sourcing arrangements, such as IT vendor contracts, as a significant risk, ranking it the fifth top risk issue in 2022.

Like in previous years, TMT respondents were asked to look into their crystal ball and identify risk issues they expect over the next decade.

Competition driven by new entrants into the industry, difficulty bridging the digital talent gap, and the rapid speed of disruptive innovations were among the top five threats identified over the next decade.

They also cited economic conditions, including inflationary pressure, and fear of substitute products and services affecting the viability of their business models.