World Economic Forum Global Risks Report 2022

World Economic Forum Global Risks Report 2022

As usual in January, the World Economic Forum has published the results of its Global Risks Perception Survey (GRPS).  For this, the 17th annual report, the survey was refreshed to gather new and broader insights from nearly 1,000 global experts and leaders who responded. This year the Global Risks Report also draws on the views of over 12,000 country-level leaders who identified critical short-term risks to their 124 countries. It’s not a survey of futurists, so one might expect the outputs to be more relevant in the shorter-term. Nonetheless, it does give an insight into the views of a large group of very influential people and the actions they then might take.

The report notes that the global pandemic has increased inequality, with richer, more vaccinated countries returning to pre-pandemic levels, whilst developing economies developing economies (excluding China) will have fallen 5.5% below their pre-pandemic expected GDP growth. Social issues top the list of risks that Covid-19 has made worse.

Looking forward the survey identified several key, and worryingly inter-related, themes.

A divergent economic recovery threatens collaboration on global challenges

The differences between the rich and developing countries’ rates of economic recovery is compounding labour market imbalances, protectionism, and widening digital, education and skills gaps. Inequality is a concern within G20 countries too – “Social cohesion erosion” is a top short-term threat in 31 countries—including Argentina, France, Germany, Mexico and South Africa. Together these forces threaten both the scope for international collaboration (eg on climate change) and stronger national interest postures.

A disorderly climate transition will exacerbate inequalities

In a potentially lethal vicious circle “Climate action failure” – seen as the greatest risk – would fail to account for societal implications, and exacerbate inequalities within and between countries, heightening geopolitical frictions, and creating yet more political complications that further slow action. Given the scale of the technological, economic and societal change required, and the insufficient nature of current commitments, survey respondents tended to think that the transition to net-zero by 2050 would be ”disorderly”.

Growing digital dependency will  intensify cyberthreats

Rapid digitalisation of many industries has led to a boom in malware and ransomware attacks – up by 358% and 435% respectively in 2020. This could become another cause for divergence rather than co-operation among nation states, as tensions between governments impacted by cybercrime and governments complicit in their commission become more severe.

Barriers to mobility risk compounding global insecurity

“Involuntary migration”  caused by economic hardship, intensifying impacts of climate change and political instability, already forcing millions to leave their homes in search of a better future abroad, is seen as is a top long-term concern for GRPS respondents. The likely response of increasing barriers to immigration is increasingly inappropriate when there are so many unfilled vacancies. (The Report doesn’t address the issue of falling populations in richer countries).

Opportunities in space could be constrained by frictions

Increasing commercialisation of space and a massive increase in satellite numbers,  combined with militarisation by some powers, risks major frictions if not managed co-operatively. Collision risks have already been seen potentially rendering viable orbits unusable because of debris.

The top ten risks identified are shown in the chart below:

Respondents were also asked about the timing of risks. In the 0-2 year horizon societal factors were in 4 of the top 6 positions.

But over the 5- 10 year horizon, environmental issues take all of the top 5 positions, suggesting respondents take a pessimistic view of the COP 26 discussions.  Geopolitical issues also rise in importance.

The report ends with a discussion on resilience. This is an area we have addressed in our blog before – we have complied those thoughts into a Working Paper, available here.

Written by Huw Williams, SAMI Principal

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

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