The 16th edition of the Global Risks Report, published by the World Economic Forum with support from Marsh McLennan, highlights the disruptive implications of major risks, including the COVID-19 pandemic, that may reshape our world in 2021 and over the next decade.

The report draws on the survey results from nearly 700 experts and decision-makers globally who were asked about their concerns for the next decade, how global risks interact and where opportunities exist to collectively act to mitigate these threats.

Covid-19 has scaled back years of progress on reducing poverty and inequality with job losses, a widening digital divide, disrupted social interactions, and abrupt shifts in markets leading to dire consequences and lost opportunities for large parts of the global population.

Key Findings

    1. Global risks perceptions

        a. Among the highest likelihood risks of the next ten years are extreme weather, climate action failure and human-led environmental damage; as well as digital power concentration, digital inequality and cybersecurity failure.

        b. Among the highest impact risks of the next decade, infectious diseases are in the top spot, followed by climate action failure and other environmental risks; as well as weapons of mass destruction, livelihood crises, debt crises and IT infrastructure breakdown. 

        c. Economic risks feature prominently in the 3-5 year timeframe, including asset bubbles, price instability, commodity shocks and debt crises; followed by geopolitical risks, including interstate relations and conflict, and resource geopolitization.

    2. Economic fragility and societal divisions are set to increase

        a. Underlying disparities in healthcare, education, financial stability and technology have led the crisis to disproportionately impact certain groups and countries.

        b. Not only has COVID-19 caused more than two million deaths at the time of writing, but the economic and long-term health impacts will continue to have devastating consequences.

        c. The pandemic’s economic shockwave—working hours equivalent to 495 million jobs were lost in the second quarter of 2020 alone.

        d. Only 28 economies are expected to have grown in 2020.

    3. Growing digital divides and technology adoption pose concerns

        a. COVID-19 has accelerated the Fourth Industrial Revolution, expanding the digitalization of human interaction, e-commerce, online education and remote work.

        b. A widening digital gap can worsen societal fractures and undermine prospects for an inclusive recovery. 

        c. 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.

    4. A doubly disrupted generation of youth is emerging in an age of lost opportunity

        a. Young adults worldwide are experiencing their second major global crisis in a decade when many are entering the workforce in an employment ice age.

        b. Hard-fought societal wins could be obliterated if the current generation lacks adequate pathways to future opportunities—and loses faith in today’s economic and political institutions.

    5. Climate continues to be a looming risk as global cooperation weakens 

        a. Although lockdowns worldwide caused global emissions to fall in the first half of 2020, evidence from the 2008–2009 Financial Crisis warns that emissions could bounce back.

        b. “Climate action failure” is the most impactful and second most likely long-term risk identified in the GRPS.

        c. Middle powers—influential states that together represent a greater share of the global economy than the US and China combined—often champion multilateral cooperation in trade, diplomacy, climate, security and, most recently, global health.

        d. However, if geopolitical tensions persist, middle powers will struggle to facilitate a global recovery—at a time when international coordination is essential—and reinforce resilience against future crises.

    6. A polarized industrial landscape may emerge in the post-pandemic economy

        a. Existing trends have been given fresh momentum by the crisis: nationally focused agendas to stem economic losses, technological transformation and changes in societal structure—including consumer behaviors, the nature of work and the role of technology both at work and at home.

        b. The business risks emanating from these trends include stagnation in advanced economies and lost potential in emerging and developing markets, the collapse of small businesses, widening the gaps between major and minor companies and reducing market dynamism, and exacerbation of inequality; making it harder to achieve long-term sustainable development.

    7. Better pathways are available to manage risks and enhance resilience

        a. Despite some remarkable examples of determination, cooperation and innovation, most countries have struggled with aspects of crisis management during the global pandemic.

        b. This edition of the Global Risks Report reflects on global preparedness by looking at four key areas of the response to COVID-19: institutional authority, risk financing, information collection and sharing, and equipment and vaccines.

        c. The response to COVID-19 offers four governance opportunities to strengthen the overall resilience of countries, businesses and the international community:

            i. formulating analytical frameworks that take a holistic and systems-based view of risk impacts

            ii. investing in high-profile “risk champions” to encourage national leadership and international co-operation

            iii. improving risk communications and combating misinformation

            iv. exploring new forms of public-private partnership on risk preparedness.

(The author is a trainer for Civil Services aspirants. The views expressed here are personal.)