Professional Documents
Culture Documents
WEF Global Risks Report 2019 PDF
WEF Global Risks Report 2019 PDF
In partnership with Marsh & McLennan Companies and Zurich Insurance Group
The Global Risks Report 2019, 14th Edition, is
published by the World Economic Forum.
ISBN: 978-1-944835-15-6
contact@weforum.org
www.weforum.org
4 The Global Risks Report 2019 The Global Risks Report 2019 4
Figure I: The Global Risks Landscape 2019
Global Risks Landscape
4.0
Natural disasters
Biodiversity loss
Cyber-attacks
Cyberattacks
Critical information and ecosystem
infrastructure collapse
breakdown
Failure of
State collapse Unemployment or Asset bubbles in
national
or crisis underemployment a major economy
governance
Failure of critical
Profound social
infrastructure
instability
3.0
Impact
Illicit trade
Deflation
3.41 plotted
area
average
Likelihood 5.0
Increasing national
sentiment
Rising urbanization
Biodiversity loss
Natural disasters Changing
and ecosystem
landscape of
collapse
international
governance
Extreme weather Water crises
events
Energy price shock
Growing middle class in Man-made environmental
emerging economies disasters
of societies destruction
Cyber-attacks
Cyberattacks Deflation
Unemployment or
underemployment
Adverse consequences of
Fiscal crises
technological advances Asset bubbles in
a major economy
Rising geographic
mobility disparityand wealth
Rising income
disparity
Ageing population
Risks Trends
Water crises
Energy price shock
Man-made environmental
disasters
Failure of Failure of
climate-change
climate change Food crises Spread of infectious
Illicit trade national diseases
governance mitigation and
adaptation
Failure of regional or
global governance
State collapse
or crisis Large-scale Terrorist attacks
involuntary
migration
Failure of critical
infrastructure Profound social
Interstate
instability
conflict Weapons of mass
destruction
Deflation
Cyber-attacks
Cyberattacks
Unemployment or
underemployment
Adverse consequences of
technological advances Fiscal crises
Asset bubbles in
a major economy
Asset price Asset price Storms and Severe income Severe income Income disparity Interstate conflict Large-scale Extreme weather Extreme weather Extreme weather
collapse collapse cyclones disparity disparity with regional involuntary events events events
1st consequences migration
Slowing Chinese Slowing Chinese Flooding Chronic fiscal Chronic fiscal Extreme weather Extreme weather Extreme weather Large-scale Natural disasters Failure of
economy (<6%) economy (<6%) imbalances imbalances events events events involuntary climate-change
2nd migration mitigation and
adaptation
Chronic disease Chronic disease Corruption Rising greenhouse Rising greenhouse Unemployment Failure of national Failure of Major natural Cyber-attacks Natural disasters
3rd gas emissions gas emissions and governance climate-change disasters
underemployment mitigation and
adaptation
Global governance Fiscal crises Biodiversity loss Cyber-attacks Water supply Climate change State collapse or Interstate conflict Large-scale Data fraud or theft Data fraud or theft
4th gaps crises crisis with regional terrorist attacks
consequences
Retrenchment Global governance Climate change Water supply Mismanagement Cyber-attacks High structural Major natural Massive incident Failure of Cyber-attacks
from globalization gaps crises of population unemployment or catastrophes of data fraud/theft climate-change
5th underemployment mitigation and
(emerging) ageing
adaptation
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Asset price Asset price Fiscal crises Major systemic Major systemic Fiscal crises Water crises Failure of Weapons of mass Weapons of mass Weapons of mass
collapse collapse financial failure financial failure climate-change destruction destruction destruction
1st mitigation and
adaptation
Retrenchment Retrenchment Climate change Water supply Water supply Climate change Rapid and massive Weapons of mass Extreme weather Extreme weather Failure of
from globalization from globalization crises crises spread of destruction events events climate-change
2nd infectious diseases mitigation and
(developed) (developed)
adaptation
Oil and gas Oil price spikes Geopolitical Food shortage Chronic fiscal Water crises Weapons of mass Water crises Water crises Natural disasters Extreme weather
3rd price spike conflict crises imbalances destruction events
Chronic disease Chronic disease Asset price Chronic fiscal Diffusion of Unemployment Interstate conflict Large-scale Major natural Failure of Water crises
collapse imbalances weapons of mass and with regional involuntary disasters climate-change
4th consequences migration mitigation and
destruction underemployment
adaptation
Fiscal crises Fiscal crises Extreme energy Extreme volatility Failure of Critical information Failure of Severe energy Failure of Water crises Natural disasters
price volatility in energy and climate-change infrastructure climate-change price shock climate-change
5th agriculture prices mitigation and mitigation and mitigation and
breakdown
adaptation adaptation adaptation
8
of global risks in 2012. Some global risks were reclassified: water crises and rising income disparity were re-categorized first as societal risks and then as a trend in the 2015 and 2016 Global Risks Reports, respectively.
The Global Risks
Report 2019
14th Edition
Strategic Partners
Marsh & McLennan Companies
Zurich Insurance Group
Academic Advisers
National University of Singapore
Oxford Martin School, University of Oxford
Wharton Risk Management and Decision Processes Center, University of Pennsylvania
Contents
4 7
Preface 5 Going Viral 44 Hindsight 76
By Børge Brende The Transformation of Security of Food Systems
Biological Risks
The Space for Civil Society
Investment in Infrastructure
Executive Summary 6
5
Fight or Flight 54
8
1 Preparing for Sea-Level Rise Risk Reassessment 86
Global Risks 2019 8 Weighing Risks by John D.
Out of Control Graham
1
International Monetary Fund (IMF). 2018. World Economic Outlook, October 2018: Challenges to Steady
Growth. Washington, DC: IMF. https://www.imf.org/en/publications/weo
(REUTERS/Lucy Nicholson)
would be significant, ranging from threatens to corrode the social being paid to economist and
6% in the United Kingdom to 17% contract in many countries. This philosopher Adam Smith and to
in Italy. In some other countries is an era of strong-state politics, placing his work on the “invisible
they are much greater: 29% in the but also one of weakening hand” of market capitalism in
Czech Republic, 59% in Mexico national communities. the context of his ideas on moral
and 69% in Russia. Given these obligation and community. Some
results, it is sobering that the 2018 Interest is increasing in approaches argue that too much emphasis
Edelman Trust Barometer to economics and finance that has been placed on “the ‘wants’
categorizes 20 of the 28 countries draw on moral theory and social of The Wealth of Nations” over
surveyed as “distrusters”.8 Beyond psychology to reconcile individual “the ‘oughts’ of The Theory of
economic impacts, eroding trust is and communitarian goals. For Moral Sentiments.”9 There are
part of a wider pattern that example, more attention is no easy remedies: the moral
psychology of partisan differences
is not conducive to compromise
Figure 1.1: Private Gains on values,10 while the geopolitical
Net private and public wealth 1970–2015 (% of national income) divergences discussed in
Private capital Chapter 2 (Power and Values)
will complicate any attempt to find
consensus on bold attempts to
rethink global capitalism. However,
that is the new challenge, and it is
one to which the World Economic
Forum will devote itself at its Annual
Public capital Meeting 2019 in Davos.
Currency crises
Violent crime
is part of the emerging geopolitical
Current levels of globalization landscape described in last year’s
Terrorist attacks Global Risks Report as “multipolar
and multiconceptual”. In other
words, the instabilities that are
Source: World Economic Forum Global Risks Perception Survey 2018–2019. developing reflect not just changing
Note: For details of the question respondents were asked, see Appendix B.
power balances, but also the fact
that post-Cold War assumptions—
particularly in the West—that the
(REUTERS/Yannis Behrakis)
A period of change in the international system is The chapter begins by outlining how normative differences
destabilizing assumptions about global order. Last year’s increasingly shape domestic and international politics. It
Global Risks Report argued that the world is becoming not then highlights three trends with the potential to trigger
just multipolar, but also “multiconceptual”. This chapter disruptive change: (1) the difficulty of sustaining global
further examines how changing power dynamics and consensus on ethically charged issues such as human
diverging norms and values are affecting global politics rights; (2) intensifying pressure on multilateralism and
and the global economy. dispute-settlement mechanisms; and (3) states’ increasingly
frequent use of geo-economic policy interventions.
The Global Risks Report 2019 21
and learn how to safely navigate Domestically, key tensions include
the challenges they entail. After the following:
No room for a period of globalization that has
nostalgia deeply integrated many countries, States and individuals. The
reconfiguring relationships is balance has tilted from
It should be no surprise that a unlikely to be easy. individuals towards states.1
multipolar world is also more In this context, the idea of
multiconceptual: as global power is “illiberal democracy” has
diffused, there is more room for gained currency.2
divergent values to shape States,
geopolitics than there has been individuals and States and minorities.
since the end of World War II. markets Politically, rising majoritarianism
After the bipolar Cold War gave means voting is increasingly a
way to unipolar US power, some Values-based tensions are winner-takes-all contest between
argued that the battle of ideas manifesting in different ways in polarized groupings. Culturally,
was over and Western liberal different places, creating new fault identity politics have become
democratic norms would, in time, lines within and between countries increasingly contentious, with
prevail globally. That was a bold and regions. But they have common national majorities in many
claim then and it looks like hubris features: control, and the role of the countries seeking greater
now. In today’s world, narratives state. Many political leaders and assimilation (or exclusion)
of gradual convergence on any set communities feel they have lost of minorities.
of overarching values look control—whether to internal
unconvincing. Values seem to be a divisions, external rivals or States and markets. The scale
source of division rather than unity, multilateral organizations—and, and power of multinational
not just globally but also within in response, they look to strengthen businesses has fuelled growing
regions and countries. the state. Because notions of power, opposition to globalization in
security and self-determination are many countries. Elsewhere,
Nostalgia is an inadequate so politically fundamental, clashes states are taking a stronger
response, especially as previous may have less scope for economic role: almost a quarter
decades were hardly risk-free. The compromise than when differences of the world’s largest firms are
imperative now is to understand involve more technical issues. now state-controlled, the
the changes that are happening highest level in decades.3
REUTERS/Jean-Paul Pelissier
Percentage (%)
shaping the pace and direction Protection of the global
of technological advances commons. Climate change,
in different countries.4 outer space, cyber space and the Africa
polar regions are aspects of the
Globally, key pressures relate to global commons that are already
how states interact and tackle or could increasingly become a Source: World Population Prospects 2017.
https://population.un.org/wpp/
cross-border challenges: source of international tensions.
system could be weakened by the commerce, and the system is mutually accepted dispute-
creation of new parallel structures, already changing—its centre of settlement mechanisms may
but it is also possible that gravity is shifting from the West to become increasingly complicated.
increased institutional density Asia. For example, in late 2017 the
could bolster the resilience China International Economic and
of the system. Trade Arbitration Commission
(CIETAC) introduced its first Worsening trade
International dispute resolution international arbitration rules, and relations
is an area of particular concern, in mid-2018 China established two
so far manifesting especially in new international courts to handle Trade is the arena in which the
relation to trade. For example, if the commercial disputes related to broader implications of a more
appointment of new judges to the the Belt and Road Initiative.10 multipolar, multiconceptual world
WTO’s Appellate Body continues Controversy has escalated in many have so far played out most clearly.
to be blocked, a key dispute- countries over investor-state dispute Trade relations between China and
settlement panel could cease to settlement (ISDS) procedures, which the United States rapidly worsened
function in December 2019, when allow foreign investors to rely on during 2018. There were positive
there will no longer be enough international arbitration processes signs in the final months of the
judges on the panel to issue rather than the local legal frame- year, raising hopes that a normal-
valid rulings.9 works of countries in which they ization of relations will follow, but
have invested.11 If cross-border trust the pace of the earlier deterioration
Dispute resolution is a crucial part of is eroded by geopolitical competition highlights how quickly risks can
the architecture of international and diverging values, creating crystallize and intensify in this area.
In early 2018, on the headwinds for developing It was not only among rivals that
recommendation of the US countries, which already face rising global trade conditions worsened
International Trade Commission,12 interest rates and, in some cases, in 2018. US trade relations with
President Trump announced “global domestic political stresses as well: its allies also saw unexpected
safeguard tariffs”—the first time in September, as US bond yields volatility. Ahead of the meeting
this provision had been used since picked up, investor nervousness of G7 leaders in June, the United
2001—totalling US$8.5 billion on had pushed emerging market States imposed tariffs on steel and
solar panel imports and US$1.8 equities into bear-market territory.15 aluminium imports from the
billion on washing machine imports. European Union, Canada, Mexico
The United States later cited national Economic policy—long seen as a and others.19 Threat and counter-
security when imposing tariffs on means of mitigating geopolitical threat followed, between the United
steel and aluminium imports, and on risk by embedding powers in States and the European Union in
three occasions it increased China- mutually beneficial relationships— particular: President Trump talked
specific tariffs related to intellectual is now frequently seen as a tool of of imposing a 20% tariff on vehicle
property and technology disputes.13 strategic competition. For imports from the European Union;
These US steps drew counter- example, the US Department of the European Commission hinted
measures from China, and the Commerce’s strategic plan for at global countermeasures totalling
stand-off soon threatened to 2018–22 states that “economic US$294 billion, around one-fifth
cover all goods trade between security is national security.”16 of total goods exports.20 The
the two countries.14 Each side in the worsening uncertainty put strain on
stand-off between the United European car makers, some
The potential costs of deepening States and China last year of which were already under
trade tensions were highlighted blamed the other for eroding pressure from US-China trade
in October 2018 when the bilateral relations,17 18 and domestic tensions.21 In a rapprochement
International Monetary Fund (IMF) political factors have not always of sorts, President Trump and
revised down its global growth been conducive to compromise European Commission President
projections for 2018 and 2019 by between the two countries. Their Jean-Claude Juncker agreed in
0.2 percentage points. The IMF current relationship is such that July to work towards reducing
expects growth to slow in the a rapid unwinding of protectionist tariffs on both sides. And in
United States from 2.9% last year measures cannot be ruled October, a revised trade deal
to 2.4% in 2019, and in China from out, but some analysts between the United States,
6.6% to 6.2%. Any slowdown in have warned about more Mexico and Canada was an-
global growth will add to the fundamental challenges. nounced to replace NAFTA: the
USMCA (the United States-Mexico- flows have increased in economic security, policing and tax. Critics
Canada Agreement).22 importance, so too have data argue, however, that governments’
localization provisions that require expressed reasons for restricting
Almost all of the high-profile trade businesses to store data in the data flows are often a pretext for
disruptions that were threatened or country where they are collected what amounts to protectionism
imposed in 2018 relate to exports rather than on company servers designed to inhibit cross-border
and imports of physical goods. located elsewhere.23 Localization digital trade.24
But a growing proportion of global rules have been justified on
trade consists of services—digital numerous grounds, from privacy
services in particular. As digital and intellectual property to national
The Global Risks Report tends to deal with structural This is usually left implicit but it deserves more
issues: systems under stress, institutions that no longer attention—and not only because declining psychological
match the challenges facing the world, adverse impacts and emotional well-being is a risk in itself. It also affects
of policies and practices. All these issues entail the wider global risks landscape, notably via impacts
widespread human costs in terms of psychological on social cohesion and politics.
and emotional strain.
The Global Risks Report 2019 33
This chapter focuses explicitly on comfortably outstrip the negative Figure 3.1: Emotional
this human side of global risks. (which include pain, worry and Downturn
For many people, as explored in sadness)—but the trend lines
Negative Experience Index
the first two sections, this is an are worrying.
increasingly anxious, unhappy and
lonely world. Anger is increasing As illustrated by the graphs in
and empathy appears to be in Figure 3.1, the positive experience
decline. The chapter examines index (a composite measure of five
the ramifications of complex positive experiences) has been
transformations in three areas— relatively steady since the survey
societal, technological and began in 2006. Meanwhile, the
work-related. A common theme negative experience index has
broken upwards over the past five Positive Experience Index
is that psychological stress is
related to a feeling of lack of years. In 2017, almost four in ten
control in the face of uncertainty.1 people said they had experienced a
lot of worry or stress the day before;
three in ten experienced a lot of
physical pain; and two in ten
The age of anger experienced a lot of anger.2
more than 145 countries in 2017— Some suggest this is an “age of Note: Scores on the two indices range from
whether they had various positive anger”, noting a “tremendous 1 to 100. Higher scores on the Positive
Experience Index indicate more positive
and negative experiences on increase in mutual hatred.”3 And experiences; on the Negative Experience Index
they indicate more negative experiences.
the preceding day. Overall, the while it is conceivable that public
positive experiences (such as anger can be a unifying and
smiling, respect and learning) catalysing force—a hope often or friend over the 2016 presidential
expressed at the start of the election.6 In another, 68% of
decade in relation to the Arab Americans said they were angry
Spring4—it has since come to be at least once a day; women
seen more as politically divisive reported themselves more angry
and societally corrosive. than men, as did the middle
class relative to their richer
In the United States, public opinion and poorer peers.7
researchers note that where
opposing political groups previously Anger has long been associated
expressed frustration with each with loss of status.8 Recent research
other, they now express fear and also suggests a strong link with
people are anger.5 In one survey, almost a third group identity.9 The risk is that this
estimated to have of respondents reported having combination generates angry
a mental disorder stopped talking to a family member polarization—an increasingly
“often or always exhausted due to One of the sectors in which has always been the exception:
work”, up by almost a third in 20 concerns about automation and for example, 70% of employment
years.62 In another study, when UK monitoring have become most in Sub-Saharan Africa is classified
workers were asked to identify the prominent is online retailing, where as “vulnerable” by the International
main workplace causes of stress, the level of efficiency with which Labour Organization.70
half cited unrealistic time pressure warehouses in particular can
and demands. The same study now operate has led to numerous Evidence from the workplace
noted employees’ concern about reports of productivity targets reinforces concerns about growing
lack of consultation on workplace causing physical and psychological problems with mental health. In the
changes (31%) and lack of control strain among workers. However, United Kingdom, an independent
over the work they do (27%).63 workplace monitoring can actually review found that while sickness-
reduce output if workers perceive it related absences overall fell by
Automation has long been a as an indication of distrust.67 Loss more than 15% between 2009
source of disruption in the of privacy due to monitoring may and 2017, absences related to
workplace. It has allowed huge have a similar effect: a study in a mental health problems increased
numbers of employees to move Chinese factory found that workers by 5%.71 Of course, not all mental
up the value chain and escape shielded from monitoring by a health problems recorded in the
monotonous and dangerous tasks, curtain were 10–15% more workplace are caused in the
but as far back as 1959 the World productive than their peers.68 workplace—but employers and
Health Organization was noting Conversely, in a study of US regulators ought to ensure that
adverse psychological impacts not restaurants where monitoring workplace conditions are not
just of automation but even of the was being used to deter employee triggering or exacerbating
prospect of automation.64 theft, large increases in weekly problems. The UK review
Research published in 2018 revenues were recorded—the recommended revising health
suggests that, in the United States, result of unexpected improvements and safety provisions to take
a 10% increase in the likelihood of in levels customer service.69 greater account of mental as
being affected by automation is well as physical well-being.
associated with decreases in Wider changes in the structure of
physical and mental health of work and in its place in society are In the 19th century, physical
0.8% and 0.6%, respectively.65 a further source of potential stress. health and safety rules and
Job security and stability are in practices reshaped work in many
Technology is also making it decline in many advanced industrializing economies. In the
easier for employers to monitor economies, with real earnings 21st century, mental health and
workers; some suggest the level growth sluggish or stagnating and safety rules and practices could
of “anticipatory conformity” this less predictable “gig economy” play an analogous role by ensuring
can encourage amounts to a work expanding. In many low- that workplace conditions are
surrogate form of automation.66 income countries, meanwhile, appropriate for an increasingly
secure and stable employment knowledge-based economy.
The previous chapter looked at the emotional and increased the risk of a devastating outbreak occurring
psychological impact of the multiple transformations the naturally, while emerging technologies make it increas-
world is undergoing. This chapter considers another ingly easy for new biological threats to be manufactured
set of threats being shaped by global transformations: and released—either deliberately or by accident.
biological pathogens. Changes in how we live have
Rapidly growing cities are making more people vulnerable disruption, but it also exacerbates those risks—for example,
to rising sea levels. Two-thirds of the global population is by destroying natural sources of resilience such as coastal
expected to live in cities by 2050. Already an estimated mangroves and increasing the strain on groundwater
800 million people in more than 570 coastal cities are reserves. The risks of rising sea levels are often compounded
vulnerable to a sea-level rise of 0.5 metres by 2050.1 by storm surges and increased rainfall intensity.
REUTERS/Lucas Jackson
Weather Wars City Limits Digital Panopticon Contested Space No Rights Left
02 04 06 08 10
Open Secrets Against the Grain Tapped Out Emotional Disruption Monetary Populism
As the world becomes more complex and interconnected, incremental change is giving way to the
instability of feedback loops, threshold effects and cascading disruptions. Sudden and dramatic
breakdowns—future shocks—become more likely. In this section, we present 10 such potential
future shocks. Some are more speculative than others; some build on risks that have already
begun to crystallize. These are not predictions. They are food for thought and action—what are the
possible future shocks that could fundamentally disrupt or destabilize your world, and what can
you do to prevent them?
W E A T H E R W A R S
O P E N S E C R E T S
A collapse of cryptography
would take with it much of the
scaffolding of digital life. These
technologies are at the root of
online authentication, trust and
even personal identity. They keep
secrets—from sensitive personal
information to confidential
corporate and state data—safe.
And they keep fundamental
services running, from email
communication to banking
and commerce. If all this
breaks down, the disruption
and the cost could be massive.
The
TheGlobal
GlobalRisks
Risk Report 2019 67
Global Risks Report 2019
C I T Y L I M I T S
A G A I N S T T H E G R A I N
The
TheGlobal
GlobalRisks
Risk Report 2019 69
Global Risks Report 2019
D I G I T A L P A N O P T I C O N
A D VA N C E D A N D P E R VA S I V E
BIOMETRIC SURVEILLANCE ALLOWS
NEW FORMS OF SOCIAL CONTROL
Biometrics are already making gait analysis, digital assistants, about us is captured, stored and
exponential advances— affective computing, microchipping, subjected to artificial intelligence
technologies that were recently digital lip reading, fingerprint (AI) algorithms.
in the realm of science fiction sensors—as these and other
now shape the reality of billions of technologies proliferate, we move This makes possible increasingly
people’s lives. Facial recognition, into a world in which everything individualized public and private
services, but also new forms of
conformity and micro-targeted
persuasion. If humans are
increasingly replaced by
machines in crucial decision
loops, the result may lead not
only to greater efficiency but
also to greater societal rigidity.
Global politics will be affected:
authoritarianism is easier in a
world of total visibility and
traceability, while democracy may
turn out to be more difficult—many
societies are already struggling to
balance threats to privacy, trust
and autonomy against promises of
increased security, efficiency and
novelty. Geopolitically, the future
may hinge in part on how societies
with different values treat new
reservoirs of data.
T A P P E D O U T
M A J O R C I T I E S S T R U G G L E T O C O P E I N T H E FA C E O F T H E
E V E R - P R E S E N T R I S K O F W AT E R R U N N I N G O U T
The
TheGlobal
GlobalRisks
Risk Report 2019 71
Global Risks Report 2019
C O N T E S T E D S P A C E
E M O T I O N A L D I S R U P T I O N
A I T H AT C A N R E C O G N I Z E A N D R E S P O N D T O E M O T I O N S
C R E AT E S N E W P O S S I B I L I T I E S F O R H A R M
The
TheGlobal
GlobalRisks
Risk Report 2019 73
Global Risks Report 2019
N O R I G H T S L E F T
M O N E T A R Y P O P U L I S M
The
TheGlobal
GlobalRisks
Risk Report 2019 75
Hindsight
Each year the Hindsight section revisits previous editions of the Global Risks
Report to look again at risks that we have previously covered. The aim is to
trace the progress that has been made in the intervening years—how have
the risks and the global responses to them evolved? This year the three risks
we return to are food security, civil society and investment in infrastructure.
iStock/rusm
Normally we would wait longer than two years to feature a topic in the Hindsight series, but even in this short time these
trends have increasingly defined the societal and political risks landscape in many countries. This reflects a general
intensification of strong-state politics and a shift to more authoritarian modes of governance in both democratic and
non-democratic states.
In its latest annual report, Freedom House stated that global freedom declined in 2017 for the 12th consecutive year,
with 113 countries recording a net decrease in freedom over that period compared to 62 recording an improvement.
According to the civil society monitoring group CIVICUS, conditions continued to tighten during 2018—between March
and November there was a rise in the number of countries categorized as “obstructed” or “repressed” and a decline in
those categorized as “open” or “narrowed”.
Since then, estimates of future needs have increased. According to projections from the Global Infrastructure Hub (GIH),
a body created by the G20, infrastructure investment totalling US$97 trillion is required by 2040 across 57 countries
and seven sectors. That compares with current investment trends of US$79 trillion, leaving a global infrastructure gap
of US$18 trillion.33 Many countries, both emerging and advanced, “have paid insufficient attention to maintaining and
expanding their infrastructure assets, creating economic inefficiencies and allowing critical systems to erode.”34
1
Perrow, C. 1999. Normal Accidents. Princeton, NJ: Princeton University Press.
Conclusion
Even with all these techniques,
things will go wrong. When they
do, we need to do a better job of
learning lessons. Too often there
is practically a script: a superficial
post-mortem is conducted, an
individual or a specific technical
problem is found to be at fault, and
a narrow fix is implemented. Then
it’s back to business as usual. That
is not good enough anymore.
We need to face reality with a
blameless process that not only
identifies specific issues but also
looks at broader organizational and
systemic causes. Only by doing
this—and by recognizing early
warning signs, building scepticism
into organizations, using structured
decision tools and managing our
crises better—will we be able to
prevent the “unprecedented errors”
that seem to be a defining feature
of the modern world.
4
Haran, U. and A. Moore. 2014. “A Better Way to Forecast”. California Management Review 57 (1): 5–15.
REUTERS/Nick Oxford
To ensure legibility, the names of the global risks have been abbreviated in the figures. The portion of the full name
used in the abbreviation is in bold.
Fiscal crises in key Excessive debt burdens that generate sovereign debt crises and/or
Economic
High structural
A sustained high level of unemployment or underutilization of the
unemployment or
productive capacity of the employed population
underemployment
Illicit trade (e.g. illicit financial Large-scale activities outside the legal framework such as illicit
flows, tax evasion, human financial flows, tax evasion, human trafficking, counterfeiting and/
trafficking, organized crime, or organized crime that undermine social interactions, regional or
etc.) international collaboration, and global growth
Man-made environmental
Failure to prevent major man-made damage and disasters, including
damage and disasters (e.g.
environmental crime, causing harm to human lives and health, infra-
oil spills, radioactive
structure, property, economic activity and the environment
contamination, etc.)
Failure of national
governance (e.g. failure of Inability to govern a nation of geopolitical importance as a result of
rule of law, corruption, political weak rule of law, corruption or political deadlock
deadlock, etc.)
Failure of regional or global Inability of regional or global institutions to resolve issues of economic,
governance geopolitical, or environmental importance
Major social movements or protests (e.g. street riots, social unrest, etc.)
Societal
Profound social instability that disrupt political or social stability, negatively impacting populations,
and economic activity
Breakdown of critical
Technological
information infrastructure and Cyber dependency that increases vulnerability to outage of critical
networks (Critical information infrastructure (e.g. internet, satellites, etc.) and networks,
information infrastructure causing widespread disruption
breakdown)
Massive incident of data Wrongful exploitation of private or official data that takes place on an
fraud/theft unprecedented scale
Trend Description
Changing landscape of Changing landscape of global or regional institutions (e.g. UN, IMF,
international governance NATO, etc.), agreements or networks
Growing middle class in Growing share of population reaching middle-class income levels in
emerging economies emerging economies
Increasing polarization of Inability to reach agreement on key issues within countries because of
societies diverging or extreme values, political or religious views
Rising income and wealth Increasing socioeconomic gap between rich and poor in major
disparity countries or regions
Both the GRPS and the Global Risks Report adopt the following definitions of global risk and trend:
Global risk: A “global risk” is an uncertain event or condition that, if it occurs, can cause significant negative
impact for several countries or industries within the next 10 years.
Trend: A “trend” is defined as a long-term pattern that is currently evolving and that could contribute to
amplifying global risks and/or altering the relationship between them.
1
In last year’s Global Risks Perception Survey 2017–2018, respondents were asked to assess “Political or economic confrontations/frictions between major
powers”. In this year’s survey, we separated this into two separate issues, one economic and one political.
were asked to assess (1) the impact—were dropped. respectively, the likelihood and
likelihood of the risk occurring impact assigned by respondent n
globally within the next 10 years, A simple average for both to risk i. The likelihood is measured
max (and the ij,n )
N
and (2) its negative impact for likelihood and impact for each of the pairmax
on a scale of= 1–5 pair
impact
ij n=1
several countries or industries 30 global risks was calculated on on a scale of 1–5. Ni is the number
over the same timeframe. this basis. The results are illustrated of respondents for risk i who
in the Global Risks Landscape assessed both the likelihood N
1
For the first of these questions, the 2019 (Figure I). and impact of thati = specific
% concern ci,n risk.
N
n=1
possible answers ranged from “very
unlikely” to “very likely” along a 1–5 Formally, for any given risk i, its
scale (1 = very unlikely, 5 = very likelihood and impact—denoted
Nr
Likely). For the second question, respectively likelihoodi and 1
% likelihoodir = li,n
respondents could select one of impacti—are: Nr
n=1
five choices: “minimal”, “minor”, N1i
“moderate”, “severe”, or “catastrophic”, 1
likelihoodi likelihoodi,n
Ni
again using a 1–5 scale (1 = minimal, n=1 Nj
1
5 = catastrophic). Respondents % Cij = ci,n
Nr
n=1
Other
0.88%
Economics
24.29% Business
∑N
n=1 pairij,n
33.48%
Male interconnection
Technology =
ij
72.76% 19.04%
pairmax Academia
26.26%
Female
26.37% Geopolitics Other NGO
12.69% 24.18% 10.28%
Society Other
12.25% 5.85%
Government
15.43%
( )
N
pairmaxRegion
= max pairij,n
ij n=1
Age distribution
Eurasia
Europe 1.77%
43.76%
N
1 America
% concerni =North ci,n
N
19.23%
East Asia and the Pacific
n=1 14.03%
Nj
1 The Global Risks Report 2019 101
% Cij = ci,n
Nr
n=1
Global risks
interconnections
Part 3 of the GRPS assesses
interconnections between pairs
of global risks. Part 4 assesses
interconnections between global
risks and a set of underlying
trends or drivers.
N
1N
% concern =1 c
% concerni =i N c i,n
N n=1 i,n
102 The Global Risks Report 2019 n=1
REUTERS/Stringer
2
Jacomy, M., T. Venturini, S. Heymann, and M. Bastian. 2014. “ForceAtlas2: A Continuous Graph Layout Algorithm for Handy Network Visualization Designed for
the Gephi Software”. PLoS ONE 9 (6): e98679. doi:10.1371/journal.pone.0098679
*****
contact@weforum.org
www.weforum.org