Global Risks 2013: Markets and Mother Nature
The world is more at risk as persistent economic weakness saps our ability to tackle environmental challenges, according to the World Economic Forum’s Global Risks 2013 report.
The report highlights wealth gaps (severe income disparity) followed by unsustainable government debt (chronic fiscal imbalances) as the top two most prevalent risks, in a survey of over 1,000 experts and industry leaders, which reflects a slightly more pessimistic outlook overall for the coming 10 years.
Following a year scarred by extreme weather, from Hurricane Sandy to flooding in China, respondents rated rising greenhouse gas emissions as the third most likely global risk overall, while the failure of climate change adaptation is seen as the environmental risk with the most knock-on effects for the next decade.
“These global risks are essentially a health warning regarding our most critical systems,” warned Lee Howell, the editor of the report and Managing Director at the World Economic Forum. “National resilience to global risks needs to be a priority so that critical systems continue to function despite a major disturbance,” he added.
Global Risks 2013 analyses three major risk cases of concern globally:
1. Health and Hubris
Huge strides forward in health have left the world dangerously complacent. Rising resistance to antibiotics could push overburdened health systems to the brink, while a hyperconnected world allows pandemics to spread. This risk case draws on the connections between antibiotic resistance, chronic disease and the failure of the international intellectual property regime, recommending more international collaboration and different funding models.
2. Economy and Environment under Stress
Urgent socioeconomic risks are derailing efforts to tackle climate change challenges. Inherent cognitive biases make the international community reluctant to deal with such a long-term threat, despite recent extreme weather events. At a time when structural changes are happening in the economy and environment, this case focuses on new approaches to make the strategic investments needed to fend off worst-case scenarios for both systems.
3. Digital Wildfires
From the printing press to the Internet, it has always been hard to predict how new technologies might shape society. While in many ways a force for good, the democratization of information can also have volatile and unpredictable consequences, as reflected in the riots provoked by an anti-Islam film on YouTube. As the media’s traditional role as gatekeeper is eroded, this case considers how connectivity enables “digital wildfires” to spread, and asks what can be done to put them out.
In a special report on national resilience, the groundwork is laid for a new country resilience rating, which would allow leaders to benchmark their progress. It is based on the notion that no nation alone can prevent exogenous, global risks occurring, which makes national resilience a crucial first line of defence.
The report as a whole describes 50 global risks and groups them into economic, environmental, geopolitical, societal and technological categories, which respondents were asked to rate in terms of likelihood and impact. The data shows that younger respondents were more concerned by risks than older ones, while women were more pessimistic than men. On a regional basis, experts in North America tended to see risks as more likely than those in other regions.
The report also highlights “X Factors” – emerging concerns which warrant more research. These include the rogue deployment of geoengineering and brain-altering technologies.
The three risk cases and X Factors will be the focus of special sessions at the World Economic Forum Annual Meeting 2013 in Davos-Klosters, Switzerland, taking place on 23-27 January under the theme “Resilient Dynamism”.
The Global Risks 2013 report is the flagship initiative of the World Economic Forum’s Risk Response Network, which provides private and public sector leadership with an independent platform to build resilience by mapping, monitoring and managing global risks.