DESPITE setbacks and disruptions, Australia’s business environment has been named as one of the world’s most resilient countries.
According to the 2021 FM Global Resilience Index, Australia has ranked number 14 out of 130 countries when looking at the resilience of business environments, thanks largely to its high ranking in productivity and low political risk.
The Resilience Index examines 12 objective measures for a country or territory’s economic, risk quality and supply chain conditions, as resilience has proven to be a prized quality since the onset of COVID-19 and rebounding from its impacts.
“The pandemic brought many businesses to a standstill and caused significant business disruption and interruption,” said Lynette Schultheis, operations manager at FM Global Australia.
“While we are well on our way to economic recovery in Australia, the events from last year brought into sharp relief that resilience must be embedded into all facets of a business so that it provides the ability to resist, rebound from or operate through adverse circumstances from lockdowns to climate-related and supply-chain disruptions,” added Schultheis.
The country’s less than stellar ranking in natural hazard exposure, at rank 49, compared to the stronger productivity, at rank 20 and political risk at 10, brought down Australia’s overall ranking.
Whereas, for natural hazard risk quality, Australia ranked at number 16, due to a higher quality and level of enforcement of building codes relating to natural hazard resistant design.
“As many companies extend their supply chains across the region in the pursuit of reduced costs and improved competitiveness, they must also take into account the natural hazard exposure and risk of where their key suppliers are located,” said Schultheis.
For example trade partners such as China ranked 91 in this objective measure, with Hong Kong ranking 41, Taiwan ranking 50, Malaysia 57, Indonesia 61, Thailand 62, India 67, Bangladesh 68 and Vietnam 130.
“It’s essential that businesses take into consideration all of the potential risk factors involved with its business partners and country-level resilience is a critical part of that,” added Schultheis.
Overall, Denmark, Norway and Luxemburg made up the top three countries respectively, with the Central United states the only non-western Europe country to enter the top 10.
Large countries, such as China and the United States were subdivided into multiple regions, due to disparate conditions across their expansive geographical spread.
The bottom three countries in the index for 2021 were Iran, Venezuela and finally Haiti in last place.
