Global risks report outlines key areas of concern in 2018
span style="font-size: small;">The Global Risks Report 2018 was well received by world leaders at the World Economic Forum Annual Meeting in Davos, Switzerland, positioning the global risks landscape at the heart of the global agenda at the beginning of the year and to identify priorities for 2018.
Key areas of concern this year include climate change, species’ extinction, income inequality, youth unemployment, privacy, cybercrime, as well as the financial system.
The report, produced by the World Economic Forum in strategic partnership with Zurich and MMC, shows cybersecurity risks are growing, both in prevalence and in disruptive potential. Attacks against businesses have almost doubled in five years, and incidents that would once have been considered extraordinary are becoming more and more commonplace. The financial impact of cybersecurity breaches is rising, and some of the largest costs in 2017 related to ransomware attacks, which accounted for 64 per cent of all malicious emails. Notable examples included the WannaCry attack—which affected 300,000 computers across 150 countries—and NotPetya, which caused quarterly losses of $300 million for many affected businesses. The report points to another growing trend; the use of cyberattacks to target critical infrastructure and strategic industrial sectors, raising fears that, in a worst-case scenario, attackers could trigger a breakdown in the systems that keep societies functioning.
Economic indicators suggest the world is finally getting back on track after the global crisis that erupted 10 years ago, but this upbeat picture masks continuing underlying concerns. The global economy faces a mix of long-standing vulnerabilities and newer threats that have emerged or evolved in the years since the crisis. The familiar risks include potentially unsustainable asset prices, with the world now eight years into a bull run; elevated indebtedness, particularly in China; and continuing strains in the global financial system. Among the newer challenges are limited policy firepower in the event of a new crisis; disruptions caused by intensifying patterns of automation and digitalisation; and a build-up of mercantilist and protectionist pressures against a backdrop of rising nationalist and populist politics.
According to the report, the world has moved into a new and unsettling geopolitical phase. Multilateral rules-based approaches have been fraying. Re-establishing the state as the primary locus of power and legitimacy has become an increasingly attractive strategy for many countries, but one that leaves many smaller states squeezed as the geopolitical sands shift. International relations now play out in increasingly diverse ways. Beyond conventional military buildups, these include new cybersources of hard and soft power, reconfigured trade and investment links, proxy conflicts, changing alliance dynamics, and potential flashpoints related to the global commons. Assessing and mitigating risks across all these theatres of potential conflict will require careful horizon scanning and crisis anticipation.