29 Global Risks from the WEF You Need To Know

To put it mildly it has been an uneasy start to 2016. Global stock markets are plummeting, there are geopolitical tensions in Eastern Europe and on the Korean peninsula, a refugee crisis on the European doorstep that has instigated a global debate, horrific terror attacks, concerns about the economic health of China and uncertainty over the future unity of the European Union. And those are to name a few. It is sometimes easy to get lost in the here and now, and fail to see the bigger picture – whatever that is! So, it is against this backdrop that i have been trying to read up on some broader themes in industry, payments, technology, regulation and try to make sense of what is going on. It was while i was reading about the World Economic Forum happening in Davos, Switzerland, that i came across the Global Risks Report – 2016. Its pretty long (103 pages), but really interesting. The following is a very quick summary of some key global risks.

Global Risks – 2016

The Global Risks report is pretty interesting because it highlights:

  • Key trends such as an ageing population, climate change, environmental deterioration, the growth of a middle class in developing countries and the dependence on digital services and technology
  • The top 10 most likely global risks (see below)
  • The top 10 global risks that would have the greatest impact (see below)
  • The links between the risks and the impact they would have on societies
  • 5 categories of risks – environmental, geopolitical, societal and technological
  • Based on a survey, the impact and probability of 29 risks over a 10 year period

Read the report for in-depth details on the impact and likelihood of these global risks. But in this post, i thought it would be useful to have an overview of what the risks are. So here goes….

Economic Risks

1. A housing/commodity or share bubble in a major economy that pops! (Big Impact Risk: 9)

2. Very low inflation or deflation in a major economy over a long period of time

3. The collapse of a large financial institution or the failure of a financial system that would impact the global economy

4. The failure of a important infrastructure (energy, transportation, communication) network – which has repercussions on the wider economy

5. A major financial crisis in a influential economy (Big Impact Risk: 7)

6. High unemployment and / or inadequate use of the employed population over an extended period of time (Most likely Risk: 7)

7. Illegal activities such as illicit financial flow, tax evasion and organised crime (Most likely Risk: 10)

8. A sharp energy price increase / decrease (Big Impact Risk: 5)

9. Out of control inflation

Environmental Risks

10. Unusual and severe weather, and the associated damage such events can cause to the local environment and infrastructure (Most likely Risk: 2)

11. Inability of government, authorities and businesses to implement effective measures to counter and adapt to any climatic changes (Most likely Risk: 3)  (Big Impact Risk: 1)

12. Environmental damage that could result in ecosystem damage or even loss (Big Impact Risk: 6)

13. Natural disasters such as a volcanic eruption, earthquake or tsunami (Most likely Risk: 5)

14. Man made environmental disasters such as an oil spill or radioactive contamination

Geopolitical Risks

15. Inability to govern, resulting in civil unrest, corruption and / or political gridlock

16. Local, national and international conflict (economic, military, cyber..) which results in regional tensions (Most likely Risk: 4)

17. Terrorist attacks

18. State collapse or in deep crisis – for example a military coup or civil conflict (Most likely Risk: 6)

19. Deployment of weapons of mass destruction (Big Impact Risk: 2)

Societal Risks

20. Badly planned cities resulting in social, health and environmental difficulties

21. Food crisis – where food is inadequate, unaffordable or unreliable

22. Mass migration due to civil conflict, natural disaster or economic uncertainty (Most likely Risk: 1) (Big Impact Risk: 4)

23. Social unrest resulting in social instability (Big Impact Risk: 10)

24. Disease resulting in death, and social and economic unrest (Big Impact Risk: 8)

25. Water crisis (Most likely Risk: 9) (Big Impact Risk: 3)

Technological Risks

26. Unforeseen and negative consequences of technology resulting in human, environmental and economic damage – this is the Terminator scenario!

27. Digital infrastructure and networks suffer an outage resulting in disruption

28. Widespread cyber-attacks

29. Data breaches – incorporating data fraud/theft (Most likely Risk: 8)

Thanks for Visiting – Kindly share this on LinkedIn…!!


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