What is the risk in the economy? Concept, types and assessment of risks in the economy

Almost any business activity is associated with risk. Risk is an indicator of conditions or events that could lead to losses. It is proportional to the probability of occurrence of this event and the amount of losses that it may cause.

Advanced living conditions are characterized by a constant increase in the size of information, the increasing difficulty of relations both in the social system and with the environment. At the same time, the processes of globalization, scientific and technological development are accelerating, and the consumption of natural resources is growing. This means that more and more reasons affect the nature and direction of human work, and the unpredictability of this impact is increasing. As a result, the level of development uncertainty is constantly growing, it is increasingly difficult to predict indicators, formulate goals and implement activities to achieve them. All this means that special attention should be paid to issues of risk research.

Risk concept

The risk doctrine is basic to the theory of development and activities of various systems. Due to the sheer number of reasons, absolutely accurate prediction of outcomes and conditions becomes impracticable. This means that there is always the possibility of different scenarios, which in reality are a source of risk.

Based on the generalization of different formulations, the following definition can be presented: risk is uncertainty in the process of achieving the goal, the probability of losses, failure to achieve the intended plans.

In a broad sense, uncertainty is common to all areas, even if they do not specifically affect human activities. But on the basis of definitions one can realize that the risk category is associated not only with the probabilistic course of events, but also with the relation of a person’s value to reality. In this case, we are talking not only about uncertainty, but also about probable losses, since a person is not worried about the possibility of this or that action, if the implied outcome does not concern his interests. Therefore, in the criteria for the dominance of financial values, risk is interpreted mainly as an attribute of industrial and socio-financial relations. In this connection, the concept of financial risk is usually used.

Causes of Risk

There are three main groups of reasons:

• incompleteness and uncertainty of information about the external and internal environment (the time factor plays a big role: the later the solution is calculated, the more opportunities there are for various unexpected events, and as a result, the higher the risk);
• limited ability to receive and process information by the person responsible for decision-making in the management system as a whole;
• random or deliberate influences of external forces and environmental objects that impede the achievement of tasks.

As a result, it does not matter which financial activity is to one degree or another affected by risk. In the modern economy, it is increasingly recognized that the process of managing activities is mainly a risk management process and the choice of a solution consists in finding a rational level of them.

Uncertainty

The concept of risk is based on the concept of uncertainty. By it is understood the absence or lack of information about some phenomenon, process.

The difference between uncertainty and risk in the economy lies in the fact that in the first case, the probability of occurrence of the results of the decision cannot be determined. In the second case, the probability of a future scenario is quite possible to determine.

Risks in the economy

Its degree in economics is the possibility of the appearance of negative consequences during the interaction of such elements as:

• uncertainty in achieving the final goals;
• probability of result;
• the possibility of deviation from the intended goal;
• possible probability of loss from the chosen alternative.

Each of these elements can manifest itself either separately or in combination with the rest.

The main features of economic risk in the economy are as follows:

1. Inconsistency as a kind of activity. On the one hand, there is a focus of risk on achieving results in some innovative ways, on the other hand, it leads to inhibition of progressive trends and the appearance of costs.
2. Alternativeness is understood as the ability to choose between different forecast options.
3. Uncertainty is understood as a lack of unambiguity and lack of knowledge of reliable information.

The object of risk in the economy is an economic system, the effectiveness of which is unknown.

A risk subject is an individual or legal entity that has permission to make decisions about an object.

Signs of risk in an economy are a set of the following characteristics:

• monetary expression of losses and their quantitative measurement;
• undesirable occurrence of losses;
• unpredictability of the outcome of the scenario;
• the likelihood of negative scenarios.

The main types

The types of risks in the economy are groups that can be established by criteria of damage in monetary terms.

The table shows the main possible classifications of them in the economy according to the criteria.

Digital economy and the concept of risk

The development of the digital economy is causing some problems related to online threats. The rapid increase in the number of computer crimes combined with the leakage of information causes significant harm, which means that manufacturers must invest heavily in information security to eliminate these risks.

Experts estimate the amount of harm from the risks of the digital economy from only one incident related to information security in the amount of 1.6 million rubles (for the sector of small and medium-sized companies) to 11 million rubles (for large Russian companies). The state economy is struggling with a lack of cybersecurity professionals, which the government must take on.

Significant business losses in the past few years have been linked to the spread of spyware that infiltrates your computer and encodes sensitive data. Some of the threats and risks posed by the digital economy have an impact on the development of the labor market and are associated with the task of dismissing employees. Extensive automation of industrial activities in combination with standardization of the main operations can successfully replace human work with a robot. Currently, robots are solving a number of technical problems in a savings bank, for example, the decision to issue loans to individuals.

Risk characterization in the study of the national economy

The risks of the national economy are macroeconomic. These may include those types that are felt by the bulk of the country's population.

Among them are:

• the cessation of the existence of the macroeconomic system;
• the formation of imbalances in industries;
• negative changes in the national economy;
• risks of the globalization process.

In the current crisis conditions, measures that are taken by the Russian government to maintain financial activity in the state are extremely necessary.

Changes in the economy of the Russian Federation at the present stage make the highest risk background for any financial work.

The current crisis in the global economy has embraced all spheres of life of Russian society and the country, which has caused the emergence and increase of risks of various types, including the macro level. They affect the productivity of business entities and the level of development of the economy and social sector of the country in general.

Typical risks of the Russian national economy today:

• lack of cash and slowdown in investment processes;
• capital outflow;
• credit reduction;
• banking sector.

Risk Assessment Methods

Managers can influence value creation for business owners through proper risk management. The main task is to determine which types of them will be more profitable for the enterprise. Risk management concepts are changing relatively dynamically. This is especially true for companies operating in the markets of different countries. Until recently, the methods most often used in risk assessment were operated on by economic and financial analysis. However, deviations from expected values ​​are increasingly being used to measure them. The most popular risk assessment methods in the economy today:

• analysis of deviations of profitability indicators;
• price deviations;
• safety level - on the basis of calculating the probability of a fall in the rate of return below the expected level;
• analysis of the level of aspiration is based on the calculation of the probability of achieving the estimated rate of return;
• Value at Risk - a measure by which the market value of an asset or portfolio of assets can be reduced under certain assumptions, at a specified time and with a certain probability.

VAR calculation

Risk magnitude (VaR) is the most commonly used method of measuring risk. VaR is widely used by banks, insurance companies and enterprises engaged in international trade. This method allows you to measure risk at a certain point and provides relevant information when making decisions. VaR is a measure created during the development of a risk measurement system at JP Morgan in the early 1990s. It consisted of measuring risks in all parts of the organization and converting them into one value. This measure was based on an analysis of deviations of income from these financial instruments and their dependencies. Since the publication of RiskMetrics by JP Morgan, VaR has become a widely used measure in risk management, not only in financial institutions. The term Value at Risk may mean the following:

• the maximum amount of funds that the company may lose at a certain point in time with a certain probability;
• a set of statistical and mathematical procedures to calculate the amount of risk;
• a set of procedures used for integrated hazard assessment;
• VaR as a tool for measuring risk management.

Despite the relatively high accuracy of this method, its limitation is that it uses data from past events to assess future ones. With this assumption, large market changes (for example, price changes) can lead to much larger losses than VaR assumes.

Methodology of risk analysis in the economy

Among their main components in the economy are:

1. Description of the work, object or process and determination of the scope of analysis.
2. Hazard identification is a critical step.
3. Assessment - determination in accordance with the accepted standard of the level of risk corresponding to the expected probability and severity of the consequences of the threat.

Among the main methods of analysis can be identified:

• inductive - begins with the identification of threatening factors and anticipates the risks associated with them;
• deductive - determining the causes of threats.

Most analyzes are carried out using induction methods.

They can be classified as follows:

1. Labor safety analysis - used to identify threats associated with tasks performed in the workplace.
2. Analysis of “what if ...” - using the brainstorming method, team members analyze an object, process or position, answering questions starting with the words “what happens if”, and thus predict possible interference and their consequences.
3. The preliminary threat analysis method allows you to first make a list of hazards that are already known. In addition, in order to detect as many new threats as possible, the operation of an object or process and its environment is analyzed.
4. Analysis using checklists - they are sets of questions regarding the properties of the human-technical object system. They can be developed on the basis of the requirements of the applicable rules, and at the same time, problems specific to a given object or process can be taken into account.
5. HAZOP method - it consists in a systematic analysis of possible deviations from the intended course of the process. Each of these deviations can pose a threat to safety, product quality or the environment.
6. FMEA method - used to analyze the risks associated with technical means. The analyzed object is divided into elements, each of them is analyzed separately.

Deductive methods are represented by the following options:

1. The error tree method is used to determine the sequence or combination of factors and conditions that cause a threat. They can be detected by other methods mentioned above. Each of these threats is in the analysis of the peak event conducted by this method, the reasons for which must be determined. The error tree is a graphical representation of the logical combinations of events that can lead to a specific peak event.
2. The event tree method - the analysis rules are similar. The direction is different - it begins with the identification of possible causes (threat factors) and leads to the identification of the consequences arising from the threats.

Conclusion

The risk in the economy is a certain probability of loss or loss of profit, in contrast to the expected result. Its main feature: danger and failure.

A risk situation arises when three circumstances coincide:

• probability of uncertainty;
• selection of forecast options;
• the ability to evaluate the future selected option or alternative.

Market economics and risk are currently closely related concepts. Market trends today are closely related to a situation of uncertainty, which, in turn, implies risk.

The market is a financial environment in which cooperation between buyers and sellers is relatively slow. To take and sell products and services, operators without the help of others make decisions about purchasing and selling, set prices, volumes of purchases, types of operations, etc. It is necessary to pay for financial freedom. Equal economic freedom of market entities creates economic risk.