ike most global risk geeks, I suspect, I am eagerly awaiting the annual publication of the World Economic Forum’s Global Risks Report (WEF GRR) with great anticipation - just like kids do their Christmas gifts and Apple devotees the latest cool “i-something” device.
The WEF GRR 2022 Report (the “2022 Report”), incorporating the views of 1,000 global risk experts, 12,000 others, and several leading businesses and academic institutions as co-sponsors, provides a dark assessment of the state of the world. Through the rest of this piece, percentages will signify what portion of the risk experts surveyed articulated a given global risk forecast in a given way.
The 1,000 risk experts were asked: “what is your outlook for the world over the next three years?” Almost 90% were gloom and doomsayers with just under 11% providing a rosier assessment:
- “Consistently volatile with multiple surprises” – 41.8%
- “Fractured trajectories separating relative winners and losers” – 37.4%
- “Accelerating global recovery” – 10.7%
- “Progressive tipping points with increasing catastrophic outcomes – 10.1%
Divided into the five categories of global risk that WEF has deployed for each of their 17 annual reports - Economic, Environmental, Geopolitical, Societal and Technological – the 2022 Report’s top 10 list of most severe global risks for the next 10 years is dominated, not unpredictably, by environmental (five) and societal (three) risks with one risk each under the economic and geopolitical categories. See Figure below.
Before you ask – were there no technological risks in the top 10? – the short term (0-2 year) and medium term (2-5 year) projections provide an answer:
- “Cybersecurity failure” is risk #7 (short term) and risk #8 (medium term)
- “Digital inequality” is risk #9 (short term)
An interesting nuance on technological risk can be found in the longer-term projections (5-10 years) where a new risk shows up called “adverse tech advances” as the #8 top risk. More on that below.
Context, Context, Context
In the introduction to the 2022 Report, the authors underscore several critical themes that run through the 2022 risk rankings. They are:
- An unprecedented and powerful intertwining of societal and environmental risks explained and propelled by a COVID-19-infested world
- A divergent economic recovery with foreseeable and unforeseeable pile-on effects on other global challenges
- A disorderly climate transition that will exacerbate societal inequalities
- Growing digital dependency intensifying cyber insecurity in this very asymmetric space
- Barriers to social mobility compounding global insecurity as economics and climate change worsen population pressures
- A new dimension for risk – space – where opportunities will be constrained by international tensions and societal trust
In Chapter 1 “Global Risks 2022: World Apart”, the 2022 Report shows how COVID-19 has accelerated and/or worsened several key longer-term trends:
- Social cohesion erosion - 27.8% - societal
- Livelihood crises - 25.5% - societal
- Climate action failure - 25.4% - environmental
- Mental health deterioration - 23.0% - societal
- Extreme weather - 22.7% - environmental
- Debt crises - 13.8% - economic
- Cybersecurity failures - 12.4% - technological
- Infectious diseases - 10.9% - societal
- Digital inequality - 10.5% - technological
- Backlash against science - 9.5% - societal
As in past WEF GRR reports, the 2022 Report provides additional thoughtful, in-depth chapters on critical top-of-mind topics:
- Disorderly Climate Transition (Chapter 2)
- Digital Dependencies and Cyber Vulnerabilities (Chapter 3)
- Barriers to Migration (Chapter 4)
- Crowding and Competition in Space (Chapter 5)
- Refreshing Resilience (Chapter 6)
A cross-cutting theme that pervades the 2022 Report is something WEF identified a few years ago as “complex interconnected risks” which I have also developed in my own work as one of 5 global multiyear megatrends the ESGT Megatrends Manual 2021-2022 where the interconnection of the various global buckets of risk is deeply evident. The 2022 Report offers the Figure below to illustrate this massive phenomenon:
Foresight: Preparedness and Resilience
In the category of “what are we doing to mitigate our most important global risks,” the picture painted in the 2022 Report is quite dire with only two out of 15 key risks – across all categories of risk – characterized as having more than 10% “effective international risk mitigation efforts.” These are “International Crime” at 11% effectiveness and “Trade Facilitation” at 12% effectiveness.
On the other extreme of lack of preparedness, several global risks fall squarely into the technology bucket:
- Artificial Intelligence – AI is categorized as the least prepared for mitigation with 1% declaring mitigation efforts as effective while 90% state that such efforts have either not started or are in early development.
- Space Exploitation - Only 3% of experts polled thought risk preparation for space exploitation was effective, while 76% declared efforts to have not yet started or to be in early stages.
- Cross-Border Cyberattacks and Misinformation – Only 2% of experts declared efforts on cyberattacks and misinformation to be effective, while a whopping 75% said that mitigation efforts have either not started or are in early stages.
These tech risk assessments are alarming to say the least as we enter uncharted territory with these issues under a megatrend I call “tech disruption at the speed of light.” These are risks at the cutting and bleeding edge, pretty much out of control and susceptible to misdeed and much worse in asymmetrically powerful bad actor hands.
Putting gloom and doom aside, I’m a big fan of the way the 2022 Report ends on a more hopeful note. The final chapter is dedicated to one of my areas of practice and research – resilience – suggesting that a silver lining of our challenging times is that governments are focused on resilience-building measures for their societies like never before. I am a true believer in the concept that if all elements within an ecosystem beginning with family units and communities but also including other organizations – in business, government, and society – focus on boosting their own internal resilience through effective governance, risk management, crisis management, business continuity, etc. – we will be able to protect most stakeholders most of the time through these trying times. Onward then.
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WEF Global Risks Report 2022: Highlights & Foresights
Image via Adobe Stock.
January 17, 2022
GEC Risk Advisory Founder Andrea Bonime-Blanc breaks down the World Economic Forum's latest Global Risks Report, explaining some of the key takeaways and forecasts for the next decade compiled from 1,000 experts on risk, resilience, and risk mitigation.
L
ike most global risk geeks, I suspect, I am eagerly awaiting the annual publication of the World Economic Forum’s Global Risks Report (WEF GRR) with great anticipation - just like kids do their Christmas gifts and Apple devotees the latest cool “i-something” device.
The WEF GRR 2022 Report (the “2022 Report”), incorporating the views of 1,000 global risk experts, 12,000 others, and several leading businesses and academic institutions as co-sponsors, provides a dark assessment of the state of the world. Through the rest of this piece, percentages will signify what portion of the risk experts surveyed articulated a given global risk forecast in a given way.
The 1,000 risk experts were asked: “what is your outlook for the world over the next three years?” Almost 90% were gloom and doomsayers with just under 11% providing a rosier assessment:
- “Consistently volatile with multiple surprises” – 41.8%
- “Fractured trajectories separating relative winners and losers” – 37.4%
- “Accelerating global recovery” – 10.7%
- “Progressive tipping points with increasing catastrophic outcomes – 10.1%
Divided into the five categories of global risk that WEF has deployed for each of their 17 annual reports - Economic, Environmental, Geopolitical, Societal and Technological – the 2022 Report’s top 10 list of most severe global risks for the next 10 years is dominated, not unpredictably, by environmental (five) and societal (three) risks with one risk each under the economic and geopolitical categories. See Figure below.
Before you ask – were there no technological risks in the top 10? – the short term (0-2 year) and medium term (2-5 year) projections provide an answer:
- “Cybersecurity failure” is risk #7 (short term) and risk #8 (medium term)
- “Digital inequality” is risk #9 (short term)
An interesting nuance on technological risk can be found in the longer-term projections (5-10 years) where a new risk shows up called “adverse tech advances” as the #8 top risk. More on that below.
Context, Context, Context
In the introduction to the 2022 Report, the authors underscore several critical themes that run through the 2022 risk rankings. They are:
- An unprecedented and powerful intertwining of societal and environmental risks explained and propelled by a COVID-19-infested world
- A divergent economic recovery with foreseeable and unforeseeable pile-on effects on other global challenges
- A disorderly climate transition that will exacerbate societal inequalities
- Growing digital dependency intensifying cyber insecurity in this very asymmetric space
- Barriers to social mobility compounding global insecurity as economics and climate change worsen population pressures
- A new dimension for risk – space – where opportunities will be constrained by international tensions and societal trust
In Chapter 1 “Global Risks 2022: World Apart”, the 2022 Report shows how COVID-19 has accelerated and/or worsened several key longer-term trends:
- Social cohesion erosion - 27.8% - societal
- Livelihood crises - 25.5% - societal
- Climate action failure - 25.4% - environmental
- Mental health deterioration - 23.0% - societal
- Extreme weather - 22.7% - environmental
- Debt crises - 13.8% - economic
- Cybersecurity failures - 12.4% - technological
- Infectious diseases - 10.9% - societal
- Digital inequality - 10.5% - technological
- Backlash against science - 9.5% - societal
As in past WEF GRR reports, the 2022 Report provides additional thoughtful, in-depth chapters on critical top-of-mind topics:
- Disorderly Climate Transition (Chapter 2)
- Digital Dependencies and Cyber Vulnerabilities (Chapter 3)
- Barriers to Migration (Chapter 4)
- Crowding and Competition in Space (Chapter 5)
- Refreshing Resilience (Chapter 6)
A cross-cutting theme that pervades the 2022 Report is something WEF identified a few years ago as “complex interconnected risks” which I have also developed in my own work as one of 5 global multiyear megatrends the ESGT Megatrends Manual 2021-2022 where the interconnection of the various global buckets of risk is deeply evident. The 2022 Report offers the Figure below to illustrate this massive phenomenon:
Foresight: Preparedness and Resilience
In the category of “what are we doing to mitigate our most important global risks,” the picture painted in the 2022 Report is quite dire with only two out of 15 key risks – across all categories of risk – characterized as having more than 10% “effective international risk mitigation efforts.” These are “International Crime” at 11% effectiveness and “Trade Facilitation” at 12% effectiveness.
On the other extreme of lack of preparedness, several global risks fall squarely into the technology bucket:
- Artificial Intelligence – AI is categorized as the least prepared for mitigation with 1% declaring mitigation efforts as effective while 90% state that such efforts have either not started or are in early development.
- Space Exploitation - Only 3% of experts polled thought risk preparation for space exploitation was effective, while 76% declared efforts to have not yet started or to be in early stages.
- Cross-Border Cyberattacks and Misinformation – Only 2% of experts declared efforts on cyberattacks and misinformation to be effective, while a whopping 75% said that mitigation efforts have either not started or are in early stages.
These tech risk assessments are alarming to say the least as we enter uncharted territory with these issues under a megatrend I call “tech disruption at the speed of light.” These are risks at the cutting and bleeding edge, pretty much out of control and susceptible to misdeed and much worse in asymmetrically powerful bad actor hands.
Putting gloom and doom aside, I’m a big fan of the way the 2022 Report ends on a more hopeful note. The final chapter is dedicated to one of my areas of practice and research – resilience – suggesting that a silver lining of our challenging times is that governments are focused on resilience-building measures for their societies like never before. I am a true believer in the concept that if all elements within an ecosystem beginning with family units and communities but also including other organizations – in business, government, and society – focus on boosting their own internal resilience through effective governance, risk management, crisis management, business continuity, etc. – we will be able to protect most stakeholders most of the time through these trying times. Onward then.
