Addressing global risks

08 January 2013


Severe income disparity followed by chronic fiscal imbalances are regarded as the two most prevalent global risks according to the latest World Economic Forum Global Risks 2013 report published today, 8 January.

Following consultation with Oxford Martin School experts at a workshop in 2012, as well as a survey of over 1,000 specialists and industry leaders, the Report outlines the risks that will shape the next ten years and considers how prepared we are as nations or businesses to face future risks.

After a year scarred by extreme weather, from Hurricane Sandy to flooding in China, respondents rated rising greenhouse gas emissions as the third most likely global risk overall, while the failure of climate change adaptation is seen as the environmental risk with the most knock-on effects for the next decade.

“These global risks are essentially a health warning regarding our most critical systems,” warned Lee Howell, the editor of the report and Managing Director at the World Economic Forum. “National resilience to global risks needs to be a priority so that critical systems continue to function despite a major disturbance,” he added.

The World Economic Forum has been helping business and governments monitor, map and make sense of global systemic risks for the past eight years, since the establishment of its “Global Risk Report”. Building on our long term relationship with the WEF, the School has joined Zurich, Swiss Re, Oliver Wyman, the National University of Singapore and the Wharton Center for Risk Management to become a formal partner in this important initiative.

Global Risks 2013 analyses three major risk cases of concern globally:

  1. Health: Advances in healthcare have left the world dangerously complacent. Rising resistance to antibiotics could push overburdened health systems to the brink, while a hyperconnected world allows pandemics to spread. This risk case draws on the connections between antibiotic resistance, chronic disease and the failure of the international intellectual property regime, recommending more international collaboration and different funding models.
  2. Economy and Environment: Urgent socioeconomic risks are derailing efforts to tackle climate change challenges. Inherent cognitive biases make the international community reluctant to deal with such a long-term threat, despite recent extreme weather events. At a time when structural changes are happening in the economy and environment, this case focuses on new approaches to make the strategic investments needed to fend off worst-case scenarios for both systems.
  3. Information technology: From the printing press to the Internet, it has always been hard to predict how new technologies might shape society. While in many ways a force for good, the democratization of information can also have volatile and unpredictable consequences, as reflected in the riots provoked by an anti-Islam film on YouTube. As the media’s traditional role as gatekeeper is eroded, this case considers how connectivity enables “digital wildfires” to spread, and asks what can be done to put them out.

In a special report on national resilience, the groundwork is laid for a new country resilience rating, which would allow leaders to benchmark their progress. It is based on the notion that no nation alone can prevent exogenous, global risks occurring, which makes national resilience a crucial first line of defence.

The three risk cases will be the focus of special sessions at the World Economic Forum Annual Meeting 2013 in Davos-Klosters, Switzerland, taking place on 23-27 January under the theme “Resilient Dynamism”.

Professor Ian Goldin will be leading a team of academic experts from the Oxford Martin School who are attending the Davos meeting to present an Ideas Lab entitled, 'From systemic risks to systemic opportunities’. Representing the school will be Professor Charles Godfray, Oxford Martin Programme on the Future of Food; Professor Sadie Creese, Institute for the Future of Computing; Professor Tim Palmer, Programme on Modelling and Predicting Climate; and Professor John Frater, Institute for Emerging Infections.

Photo by freeimageslive / BrianNorcross