For several decades economic volatility appeared to have been tamed. Deft economic management, particularly by central banks, prevented downturns from becoming recessions, and the occasional recession from becoming a depression. A stable geopolitical environment, at least in the rich world, kept the severity of economic shocks at levels governments could handle.
These certainties are now unraveling. External shocks to economies, ranging from pandemic to war, appear to be on the increase. At the same time, higher government debt and rising inflation have hamstrung governments’ ability to cushion these shocks. We appear, in sum, to be heading into a new era of economic volatility.
The technology sector is front and center in that new volatility, as a major arena for geostrategic competition. To understand how technology companies perceive these new economic risks, working together with the consultants at Oxford Analytica, we conducted interviews with a panel of executives in the technology sector. The economic risks they believed to pose the greatest threat to the technology sector in 2024 and 2025 are listed in the report.
We review each of these risks and how companies are seeking to manage them. The panelists share their insights into the difficult balance between keeping up with economic shifts, and avoiding excessive layoffs that could unnerve investors. They talk about the new government interventions in a sector that has become uniquely “sensitive” on national security grounds. They talk about managing supply chain risks via regular, transparent conversations with key suppliers.
Scholars from Oxford Analytica’s expert network then contribute in-depth essays on two of the top risks —the outlook for U.S.-China technology competition, and technology regulation under a Trump administration. While Trump will seek to promote U.S. innovation, he is also expected by the authors to intervene increasingly heavily in the technology sector, particularly on national security grounds – and possibly making use of human rights legislation. Given the sector’s reliance on China for upwards of 30 percent of sourcing (depending on the sub-sector) trade tensions with China could have a big impact, and there are also a number of tripwires in relations with Europe regarding high technology.
In the report you will also find callouts — one on the growing use of trade credit insurance in the semiconductor sector; and another on the question of productivity breakthroughs resulting from GenAI.
Download the full report to access more detailed perspectives on managing the new economic risks in the technology and telecoms sector.
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