Risk, security, and resiliency professionals have been in one form or another preparing for the eventuality of a major global pandemic for some time. Many enterprises faced the outbreak of SARS, MERS and EBOLA with incident and crisis management plans that were not designed for managing significant health-related issues. Those outbreaks, however, only gave professionals experience in dealing with infectious outbreaks of a troublesome proportion. Much of the learning associated with those outbreaks were instructive but truly did not prepare their enterprises for a pandemic of the biblical proportion that transcended the globe from its origin in Wuhan, China in late 2019.
The world has not witnessed a global pandemic of this magnitude since the Spanish Flu of 1918, but that was a completely different time and circumstance. We may never know the true origin, the extent of the infection, or death rate in China due to the Chinese Communist Party’s (CCP) efforts to suppress information they deem negative or critical of the manner in which they handled the coronavirus. A clear example of CCP’s moves to suppress information and control the narrative was the expulsion of reporters from the Wall Street Journal, New York Times, and Washington Post at the height of the virus outbreak in Wuhan.
The question going forward is what repercussions will China face for unleashing a global pandemic that science and health experts agree could have been prevented if China had acted more responsibly and transparently? Revelations about China’s vacuuming up of available personal protective equipment globally at the onset of the novel coronavirus resulted in local shortages around the world as it spread to other countries. In addition, threats by the Chinese of delaying, or possibly withholding, the shipment of vital pharmaceuticals further damaged their standing in the world. A number of countries rejected poor quality personal protective equipment, faulty virus tests, and other medical-related products shipped to them by the Chinese in their failed attempt to win over countries as part of a charm offensive. Couple these recent issues with China’s long history of economic espionage forced transfer of trade secrets; and, their human rights record involving forced labor and re-education camps further highlights the CPP’s true intentions. In addition, China’s significant military expansion and efforts to gain control of the South China Sea, combined with increased pressure on Hong Kong and Macau to be more aligned with Beijing, has raised significant concerns of neighboring countries as well as Western nations.
Reshaping Strategic Industries and Supply Chains
Over the years China has become the low-cost manufacturer for the world, which has created significant risks for industries and economies that abandoned local manufacturing capabilities in their home countries or other countries with higher cost workforces. When governments around the world begin to reopen their societies and economies as the pandemic subsides, there is a strong probability that government-led in-depth reviews will be conducted of industries and capabilities that are deemed critical or strategic in nature. Legislators are likely to mandate that certain vital products be manufactured in-country as well as requirements for enterprises to maintain certain levels of local inventory of these key products, along with increases in their country’s national stockpiles. This process will likely include critical industries such as pharmaceuticals, medical products, personal protective equipment, communications equipment, and security hardware/devices, to name a few (See The Head of U.S. Counterintelligence Hoists The Red Flag in the February/March 2020 issue of Security Technology Executive).
Risk, security, and resiliency professionals will have an incredible opportunity to help shape the future of many of these industries. It is important to initiate discussions with senior leadership of your enterprise early in the process. Engaging with your government affairs, real estate, strategy, and operations executives will bring you to the table when these discussions begin to occur. The high probability of either government, stakeholder, or public pressure to relocate elements of the enterprise out of China will create significant opportunities to participate in site selection decisions where risk, security and resiliency will become critical elements of the selection process.
Similar discussions will occur surrounding more frequent major disruptions in recent years as supply chains have been stretched around the globe. Natural disasters such as the Fukushima earthquake and tsunami; major civil unrest and disruption in Hong Kong; Iranian attacks on Saudi oil fields and commandeering of oil tankers in the Straits of Hormuz all have created significant disruptions, however, all of these issues combined have caused nowhere near the disruption and economic turmoil as the COVID-19 pandemic that has significantly impacted over 180 countries around the world.
The Future of The Workforce - New Opportunities and New Risks
In response to government-mandated closure of non-essential enterprises, we have witnessed a dramatic shift to telecommuting for the workforces of many enterprises. This shift resulted in significant turmoil for both large and small organizations. Many organization’s IT infrastructure was not prepared for the onslaught of bandwidth and server usage. For those working at home, many faced slow service due to insufficient connectivity speed through their internet service provider as well as extensive bandwidth usage by children attending virtual school classes and watching streaming video.
As a member of the Global Management Committee for the London-based Institute for Strategic Risk Management, I participate in frequent on-line meetings to discuss the pandemic’s impact on nations, their economies, and their populations. Numerous questions exist as to what the new norm will look like when restrictions are eased. For example, during a recent meeting of the ISRM leadership, one of the members cited a company that has approximately 4,000 members of its management team working from home. The senior leadership of that company has determined that their experience has shown them during this lockdown that they expect to only require approximately 1,200 members of their management team moving forward.
Will enterprises embrace work from home as an opportunity to cut costs by reducing the overhead associated with large office complexes? Will online meeting apps replace booking conference rooms for those seemingly endless strings of meetings? Will increased embedded computer system monitoring become the standard for measuring work at home staff productivity? Will we see insider threats increase as a result of individuals being so significantly separated from their work environment? Will the unauthorized disclosure or theft of intellectual property and trade secrets be significantly exacerbated?
In discussions with risk, security, and resiliency executives from a number of global companies, the vast majority are in discussions with senior management about protocols that will need to be in place to reopen their office campuses, manufacturing facilities, warehouses, etc. to bring employees back into their facilities. All types of measures are being considered for deployment, including such things as temperature and health monitoring, thermal cameras, track and trace technology deployment, sneeze guards and masks, significantly reduced ingress and egress doors, one-way hallways and social distance spacing between employees’ workspaces in both the office and factory environment. Another critical measure being considered is the ability to quickly respond to and sanitize areas where an employee has been in the event they become infected with the virus.
A recent Wall Street Journal Op-Ed opined that the Plaintiff’s Bar sees huge tort opportunities associated with individuals becoming infected at work and bringing the virus home to their families as a result of companies failing to provide proper duty of care in the workplace. That liability will increase exponentially if a death occurs that can be traced back to a workplace contracted infection.
Rethinking How We Operate
Privacy considerations will, in all likelihood, take a back seat to increased sensor-based requirements which will dramatically increase the capability of countries to track and trace citizens and visitors to their countries. Technology applications such as AI, facial recognition, and cellphone apps will likely increase exponentially. Similarly, governments will likely require enterprises to track employee movement and those they come in contact with, as well as substantially increase their utilization of a broad range of sensor technology in their facilities. Virtually all network-connected devices will receive additional monitoring to ensure productivity of those individuals working from home or other remote locations.
Protection of intellectual property and trade secrets will require enhanced measures through crown jewel reviews, enhanced contractual requirements and the increased usage of digital rights management software controls to limit the types of information to which an individual is granted access and what they are allowed to do with the information once they access it.
Individuals working from home or other unsecure locations will require increased training relative to the safeguarding of proprietary information. For example, consider a scenario where a neighbor’s child is visiting with one of your employee’s kids while the employee is on a video teleconference discussing sensitive plans about the company’s new products or expansion plans. The neighbor’s child overhears some sensitive data that they then repeat to their parent, who happens to either work for a competitor or is in the financial services industry and acts on that information, the outcome resulting in a serious breach.
Business travel will likely be significantly reduced due to duty of care concerns for employee well-being. The probability of governments extending border closures and quarantine requirements for individuals entering a country will, in most cases, eliminate all but absolutely essential travel requirements.
Over-The-Horizon Risks
Governments around the world are infusing their economies with trillions of dollars of deficit spending cash in an attempt to stabilize their economies during the global pandemic lockdowns. Economists generally predict that we will experience a global depression followed by hyper-inflation fueled by the unprecedented printing of so much money. The highly anticipated depression and inflation cycle will have significant consequences on the stability of many enterprises due to these difficult-to-tame economic conditions. The potential for significant social unrest, protests and violence creates additional havoc. Many experts predict that as a result of poor business conditions, the rate of joblessness will continue to grow, which will further hamper the revenue collection for governments attempting to stabilize in a post-pandemic world, likely adding fuel to an already out of control fire.
In the event that a second wave of the coronavirus is to emerge, prior to any effective treatment or vaccine being developed and deployed, the world will face conditions that experts predict will be potentially even more devastating to the fragile economies attempting to recover from the initial wave of the pandemic.
Bad Actors Will Probably Act Worse
China, Russia, Iran, and North Korea have all demonstrated increasingly ambitious military expansionism. The potential of military conflict in Asia or the Middle East is considered a high probability by regional experts witnessing this increased saber-rattling unfold.
Terrorist groups such as Hezbollah, Daesh, Taliban, Boca Haram, and Al-Qaeda in the Arabian Peninsula will likely misread this time of global economic strife as a weakness of Western Society which will potentially embolden them into increased and more sensational attacks around the world. In addition, hate groups and violent extremists will utilize this period of instability in an attempt to further undermine the government’s ability to suppress their vicious and heinous acts. We have already heard of hate groups threatening to spread the coronavirus into ethnic communities and populations that they have vowed to eliminate.
Cyber intrusions and attacks sponsored by nation-states, organized crime and a host of nefarious actors will continue to create havoc until a zero-trust internet 2.0 is established which requires full identity and traceability of all users. Social media will continue to be utilized to manipulate public opinion, create distrust of governments, and prey upon unsuspecting or other vulnerable people.
In closing, all of these conditions create huge opportunities for risk, security, and resiliency professionals to gain extensive opportunities and recognition for the important roles they play in safeguarding enterprises, governments, and society in general.
About the Author: Lynn Mattice is the Founder of the Executive Summit Series™ forums and leads a top-rated consulting firm specializing in enterprise risk management, intelligence, resilience, cyber, information asset protection and security. He served over 25 years as CSO for three major global corporations during his career. He can be reached through www.matticeassociates.com
