Property loss prevention consultant FM Global released its fifth annual Resilience Index, which ranks 130 countries on their enterprise resilience to disruptive events. The ranking is data-driven and assesses categories such as economic factors, risk quality, and supply chain. It allows executives to plan supply chain and expansion strategies based on insight regarding risks and opportunities, according to the FM Global website.
Giving a nod to new trends that affect supply chain resilience, FM Global introduced three new drivers of resilience to its assessment: supply chain visibility, urbanization rate, and inherent cyber risk. Supply chain visibility addresses the ease of tracking goods across a country’s supply chain. “The more visible and robust the supply chain and the faster it can begin functioning as normal following a major local event, the greater its resilience,” the report notes.
The urbanization rate is based on the percentage of the country’s population that lives in urban areas. While urbanization is typically associated with a country’s development, it can prove to be risky in an area with high natural hazards. And rapid and unplanned urbanization can create pressure on utilities and infrastructure, which can be a significant threat to the country’s resilience, according to the report.
2017 is also the first year that the threat of cyberattacks has been acknowledged in the report. The inherent cyber risk driver is defined as “a blend of a country’s vulnerability to cyberattack, combined equally with the country’s ability to recover.” This is calculated by determining the percentage of citizens with access to the Internet, as well as how the government responds to cyberattacks. “Countries that recover well from major events are those with a thriving industry in malware or cybersecurity, and where governments are willing to step in and help citizens in the event of a nationwide hacking,” the report says.
At the top of the list for the fifth year is Switzerland, an “acknowledged area of stability for generations” with infrastructure and political stability that makes its supply chain reliable and resilient. However, natural disasters and cyberattacks remain a threat to the country.
Also notable is Luxembourg, which was ranked eighth in 2013 but placed second this year. A growth in the country’s services sector, combined with its reduced economic reliance on oil and its business-friendly regulations, makes Luxembourg a safe place to expand operations to, the report finds. And due to its location, Luxembourg may serve as a new home for companies following the United Kingdom’s departure from the European Union.
At the other end of the spectrum, Haiti is ranked last due to its lack of supply chain and standards and its high rate of poverty. Similarly, Venezuela fared poorly due to corruption, natural disasters, poor infrastructure, and ill-perceived quality of local suppliers.