World Economic Forum Global Risks Report 2021

World Economic Forum Global Risks Report 2021

Although the usual festival of the rich didn’t happen at Davos this year, the WEF did produce its usual annual report on global risks – the 16th edition.  The analysis of risks is compiled from a survey of “extensive network of business, government, civil society and thought leaders” – not futurists as such.  Respondents were asked their views on a list of 35 global risks, categorised by STEEP, 12 of which were newly identified this year.  The new risks included  “digital inequality” and “digital power concentration”, “fracture of interstate relations”, and “prolonged economic stagnation”.

For 35 global risks Respondents were asked to identify:

    • The time horizon for the risks, short/medium/long within 10 years;
    • Impact and Likelihood within 10 years
    • The most to least concerning, and which were drivers of other risks
    • Blind spots and opportunities

Unsurprisingly, “Infectious diseases” headed the list of short-term risks (“clear and present dangers”), closely followed by “livelihood crises”.  “Weapons of mass destruction” and “state collapse” were marked as the top long-term “existential” risks.

The “Global Risks Landscape” was also fairly predictable, with environmental risks and infectious diseases featured in the top right corner.

Personally, I would have rated “Mental health deterioration” and “Backlash against science” higher on both dimensions than the bottom left position rated by respondents. I would also have rated the importance of “Digital inequality” higher – respondents did rate it as “likely”.

Respondents did include mental health in their list of top “blind spots”, along with “youth disillusionment” and, remarkably, “climate  action failure”.

Tracking the most likely risks over the years is more revealing.

Environmental risks around climate change have climbed to the top of the lists, interrupted only by the pandemic – which many would argue is a linked environmental risk itself.

In his analysis of the WEF report, Andrew Curry pointed out that “When WEF says something, you can know that this is a view that mainstream business opinion feels comfortable moving towards. It’s a signal of an idea’s maturity.”  So this is not the place to look for weak signals or novel threats.

Drawing on the survey, the WEF Report analyses “growing social, economic and industrial divisions, their interconnections, and their implications on our ability to resolve major global risks requiring societal cohesion and global cooperation”.  They identify five key areas, mostly focussing on the effects of the pandemic:

    • Economic fragility and societal divisions are set to increase: the pandemic’s economic effect will increase inequality and the risk of “social cohesion erosion”.
    • Growing digital divides and technology adoption pose concerns: progress towards digital inclusivity is threatened by growing digital dependency, rapidly accelerating automation, information suppression and manipulation, gaps in technology regulation and gaps in technology skills and capabilities.
    • A doubly disrupted generation of youth is emerging in an age of lost opportunity:  hard-fought societal wins could be obliterated if the current generation lacks adequate pathways to future opportunities
    • Climate continues to be a looming risk as global cooperation weakens: the survey was conducted in September/October 2020, so respondents could not know that the new US President would sign up to the Paris accord again and appear to take the issue seriously. Respondents were more pessimistic and foresaw a reduction in international co-operation as states focused internally to re-boot their economies.
    • A polarised industrial landscape may emerge in the post-pandemic economy: stagnation in advanced economies and lost potential in emerging and developing markets.

Looking to the positive, the report concludes with a view on “better pathways … to manage risks and enhance resilience”.  They suggest that the response to COVID-19 offers four governance opportunities:

    • formulating analytical frameworks that take a holistic and systems-based view of risk impacts;
    • investing in high-profile “risk champions” to encourage national leadership and international co-operation;
    • improving risk communications and combating misinformation; and
    • exploring new forms of public-private partnership on risk preparedness.

It is understandable that the pandemic dominates immediate planning and people use it to justify their pre-existing preferences for action.  Nonetheless it is right to suggest that this is a time when organisations may be more than usually open to the idea that the future is inherently uncertain. If sights can be raised beyond immediate economic re-construction, opportunities for more resilient development do exist.

Written by Huw Williams, SAMI Principal

The views expressed are those of the author(s) and not necessarily of SAMI Consulting.

SAMI Consulting was founded in 1989 by Shell and St Andrews University. They have undertaken scenario planning projects for a wide range of UK and international organisations. Their core skill is providing the link between futures research and strategy.

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