Welcome to RiskMap 2016, our annual preview of what the year ahead has in store. In 2016, business and politics will be reshaped by a phenomenon common to both: insurgency. In both worlds, the established order is being challenged by disruptive forces that appear rapidly, upset the status quo and wrong-foot the powers that be.

Guerrilla capitalism

The business headlines are dominated by companies like Uber and Airbnb – usurpers in stodgy sectors unused to change and reeling from these new companies now fulfilling the promise and hype of the original dotcom boom. Harnessing extraordinary advances in computer processing power, they are running lean, outsourced operations able to move rapidly around the globe exploiting regulatory models designed for a different era. This new form of guerrilla capitalism, made possible by a step change in technological capability and a non-conformist genius for innovation, will wreak havoc in other sectors as ill-prepared as the taxi and hotel businesses.

And not just in consumer sectors. In the oil business, fracking went from the margins of the industry to confronting the assumed economics of traditional producers in just a few years. The ability of the shale industry to adjust production, even as it took a clobbering from the collapse in prices, is typical of a new type of company: more mobile, more agile, and with the kind of flexibility that leaves the behemoths of the oil and gas industry struggling to reinvent themselves.

Politics of insurgency

This upheaval in business is mirrored in the world of politics. The new insurgent model – makeshift, audacious and willing to seek out unconventional funding – applies as much to Libyan militia gangs as it does to Palo Alto start-ups. And it goes beyond organisational theory right to the pinnacle of power. As I write this, the nomination process ahead of the US presidential election is being shaken up by an insurgent  anti-politics that is propelling unlikely Republican candidates to the head of the pack. No doubt more mainstream candidates will eventually prevail, but this anti-establishment surge has rocked US politics to its core.

In China, where maintaining the external appearance of pervasive power is paramount, the wild gyrations of the Shanghai stock exchange in 2015 reminded the political establishment that there are forces at work beyond its immediate control. This is occurring at a time when the task of adjusting the economy to an era of lower and different growth is reaching its critical phase – a process that has been likened to performing open heart surgery while the patient is running a marathon – making the leadership particularly nervous of triggering large-scale popular discontent at such a delicate moment.

Ironically, it is one of the Chinese government’s flagship initiatives  – the anti-corruption drive – that could do just that. The purge of corrupt officials and businesspeople has tapped into a rich seam of pent-up public disgruntlement over persistent graft and incompetence. It now runs the risk of taking on a life of its own and turning on its creators, becoming one of those dynamic, disruptive forces fuelled by the frustrations that inevitably come from wholesale economic restructuring.

Similarly, Brazil is in the grip of zealous prosecutors pursuing allegations of corruption at state oil giant Petrobras that are extending into the highest echelons of society. The elite has seen any number of anti-corruption campaigns launched with great fanfare, only to see them fizzle out before they intrude on their cosseted lifestyle. But this one is now too close for comfort. It is one of those largely unplanned phenomena, again propelled by grassroots agitation, that is reshaping the often sclerotic and cosy nature of Brazilian power.

Disrupters confront realities of power

In India, arch-disrupter Narendra Modi must live up to his promise to change the way India is governed. Having swept to power with his own brand of Gujarati radicalism on a wave of iconoclastic popular support that shattered the Congress-dominated consensus, he now faces the same popular intolerance of inaction that he exploited so cleverly in opposition. And what applies to Modi in Delhi equally applies to President Joko ‘Jokowi’ Widodo in Jakarta. Beware the disrupter who is handed the reins of power.

Nobody should heed this maxim more than Russian President Vladimir Putin. Russian foreign policy has been built on a strategy of disruption – a skilful ability to unsettle the West in eastern Ukraine, Crimea and Syria with the aim of restoring Russia’s international prestige. Nobody should underestimate the ability of Putin and Foreign Minister Sergei Lavrov to continue to outmanoeuvre their opponents in this game of geopolitical chess, or the amount of genuine sentiment that underpins their domestic support. But the cold reality of the parlous state of Russia’s hydrocarbon economy cannot be ignored forever.

The search for a solution to the migrant crisis will dominate Europe in 2016. Mounting popular opposition to mass immigration – even in tolerant Germany, with its declining population – has all the hallmarks of single-issue insurgency outside mainstream politics that appeals to the visceral worries of Europeans fearful for their security in the wake of the attacks in Paris.

Elsewhere, unconventional forces continue to challenge the established order. In South Africa, the disrupter has become the disrupted. Robben Island alumnus President Jacob Zuma will continue to face increasingly militant opposition from the attention-grabbing  extra-parliamentary activities of Julius Malema’s Economic Freedom Fighters. More broadly, the ‘Born Frees’ – those born since the end of Apartheid without the same innate respect for the ANC as their parents – are losing faith in a parliamentary process dominated by a single party perceived not to be delivering on the promise of a better South Africa.

Global disrupters

Beyond the pale of politics and business sit malevolent disrupters. Islamic State (IS) fulfils all the criteria, emerging from the embers of al-Qaida in Iraq to create an adaptive organisation that seems able to outwit the forces arraigned against it. Even if IS can be contained militarily in Iraq and Syria, it has demonstrated that it is able and willing to extend beyond the caliphate and strike cities in western Europe.

Less murderous but still pernicious are the cyber criminals who, on a daily basis, and often with few resources other than those available to tech-savvy teenagers, are able to penetrate the defences of the world’s biggest corporations. No wonder then that state-sponsored cyber teams are able to do such damage.

Behind all this disruption sits the biggest potential disrupter of all: the possibility of another financial crisis triggered by any combination of the end of cheap money, another eurozone crisis or a Chinese hard landing. The prospect of a repeat variation of 2008 may only be lurking in the shadows, but it is there. The prospect of Presidents Barack Obama, Xi Jinping and Putin coming together to avert financial peril seems sadly remote.

Forty years of risk

Every age thinks it is unique. And I am sure that our forebears would argue that there is nothing new in this notion of disruptive insurgency. No doubt they felt the same at the sudden onset of mechanised agriculture, Marxism or a new strain of bubonic plague. But current perception trumps historic relativity. The fact we have weathered these storms before means little if your boat is sinking before you reach the Greek coast, your company is left stranded by an unforeseen technical innovation or you have just discovered a 16-year-old hacker at large in your key database.

Nevertheless, it is important to challenge the idea that we face unprecedented calamity. Each year in RiskMap we are at pains to emphasise that, for all the apparent insecurity that surrounds us, the world remains full of promise for the well-prepared investor. Risk is a necessary precondition for opportunity, and 2016 will be no exception. To put our current anxieties into context, we have included in this year’s publication a RiskMap for 1975, the year Control Risks was founded. As you will see, there was plenty to be concerned about 40 years ago. But somehow the world survived, and four decades later we are immeasurably wealthier, healthier and in many ways safer than we were back then.