Companies around the world are increasingly concerned about the impact of political instability and geopolitical uncertainty on their business, according to new research from Economist Impact and DP World.

The report, based on a global survey of 3,500 company executives and unveiled on Tuesday at the World Economic Forum (WEF), also revealed that a fifth of businesses are concerned with higher tariffs, or uncertainties around tariffs, in major markets they trade with.

Around 22% of executives emphasised the challenge of political instability in the markets they source from, while almost a quarter (23%) expressed concerns about heightened geopolitical uncertainty.

“Concerns that political instability, rising trade friction and global fragmentation could hamper growth are increasing,” DP World noted, as it shared the findings of the report.

Optimism remains

The report gathered inputs from trade experts and senior executives across multiple regions and sectors.

Despite growing concerns, businesses remain positive for 2024. According to the report, companies are evaluating risks within the supply chains and are expected to further ramp up tech adoption this year.

Most businesses (98%) said they are already using artificial intelligence (AI) to improve at least one aspect of their supply chain operations.

Businesses are now using AI to complete certain tasks, such as solving inventory management issues, reducing trade expenses and optimising transport routes.

More than a third of businesses have plans to use more digital tools to improve inventory management, as well as cut overall trade and supply chain outgoings.

(Writing by Cleofe Maceda; editing by Seban Scaria)  seban.scaria@lseg.com