Political Polarization Is a New Top Emerging Risk for Enterprises

Escalating political polarization worldwide entered the quarterly Gartner emerging risk tracker for the first time in the fourth quarter of 2023, according to Gartner, Inc.

“Risk executives worldwide are clearly concerned by the potential implications of escalating tensions and conflict all over the globe,” said Ran Xu director, research in the Gartner Risk & Audit Practice. “From Ukraine, the Middle East, the East China Sea, South America, Africa, Western Europe or the U.S., there is evidence of geopolitical instability rooted in increasing political polarization around a number of issues.”

In November 2023, Gartner surveyed 347 senior enterprise risk executives to provide leaders with a benchmarked view of 20 emerging risks. The Quarterly Emerging Risk Reports includes detailed information on the possible impact, time frame, level of attention, and perceived opportunities for these risks.

Mass generative AI availability was the top cited emerging risk in the 4Q23 survey (see Table 1) and has been in the top five in the previous two quarters as well. Escalating political polarization entered the tracker for the first time in second spot, with cloud concentration risk (a top five risk last quarter) coming in third place.

Causes of Escalating Political Polarization

Gartner experts have identified three principal factors that are driving increased political polarization:

1.    Reinforcing Social Media Algorithms
Algorithms that are designed to ensure engagement and retention on social media platforms by delivering tailored content to individual users, also lead to information silos that feed confirmation bias and can reinforce divisive political outlooks. 

2.    Pervasive Economic Pessimism
Although the global economy is still growing, commodity and housing prices remain high amid a recent episode of increased inflation and higher interest rates, squeezing the finances of individuals worldwide. These kinds of heightened economic concerns often push extreme ideological realignments.

3.    Politicization of Civic Institutions
As formerly neutral civic institutions (e.g., the education system) face increasing political scrutiny, public trust in them wavers, and individuals often seek out non-mainstream information sources that align with preexisting beliefs, further reinforcing the impact of social media algorithms.

“The potential consequences of escalating political polarization for any specific organization will be contingent on many factors, such as its line of business or geographical location,” said Xu. “Many organizations, however, will already have been embroiled willingly, or unwillingly, in political debates that could potentially result in reputational damage. Organizations may also be impacted from volatile and unpredictable elections that may cause strategic delays and undermine investor and customer confidence.”

Leave a Reply

Your email address will not be published. Required fields are marked *